Amended in Senate August 7, 2014

Amended in Senate August 4, 2014

Amended in Senate June 23, 2014

Amended in Assembly April 23, 2014

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 7500.2, 7502.2, 7505.3, 7507.3, 7507.115, 7508.1, 7508.4, and 7508.5 of, and to amend and renumber Section 7505.2 of, the Business and Professions Code, to amend Section 41612 of the Government Code, and to amend Sections 28, 4000,begin delete 9561,end delete and 11705 of, and to add Section 10856 to, the Vehicle Code, relating to repossessors, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 2503, as amended, Hagman. Repossessors.

(1) Existing law, the Collateral Recovery Act, provides for the licensure and regulation of repossession agencies by the Bureau of Security and Investigative Services. A violation of the act is a crime.

This bill would require a repossession agency to only transact business with a person or entity as an independent contractor, and would prohibit a licensed repossession agency from allowingbegin delete any otherend deletebegin insert aend insert person or entitybegin delete toend deletebegin insert, other than the qualified certificate holder, to manage the day to day operations,end insert operatebegin insert, control,end insert or transact business under the license of the repossession agency. By expanding the scope of a crime, the bill would impose a state-mandated local program.

(2) 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 buy-here-pay-here dealer, as defined. By expanding the scope of a crime, the bill would impose a state-mandated local program.

(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 operations of the business.

(4)  Existing law prohibits a repossessor from appraising the value of any collateral.

The bill would further prohibit the appraisal or determination of the value of any collateral, whether damaged or not. The bill would alsobegin delete prohibit a condition report that assesses the collateral from containing specified items or descriptionsend deletebegin insert require a specified statement on condition reports and would specify that condition reports do not include all damage or missing partsend insert. By expanding the scope of a crime, the bill would impose a state-mandated local program.

(5) 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.

(6)  Existing law authorizes the Director of Consumer Affairs to assess an administrative fine for the failure to present a debtor with an itemized receipt of payment, if payment is made in lieu of repossession.

This bill would delete this provision.

(7)  Existing law requires that when possession is taken of a vehicle by or on behalf of a legal owner under the terms of a security or lease agreement, the debtor pay the police or parking authority a specified fee. Existing law prohibits the release of the vehicle to the debtor until the debtor provides proof of payment or pays the fee and an administrative fee to the person in possession or the legal owner. Existing law also provides for a fine if the fee is not transmitted to the police or parking authority. Existing law requires proof of payment to be retained by the party releasing possession to the debtor.

This bill would delete the provisions that allow the release of a vehicle to a debtor who pays the fee and an administrative fee to the person in possession or the legal owner. The bill would make other conforming changes to this provision.

(8)  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 contact law enforcement within one hour of the repossession, would specify information that would be required to be provided in the notification, and, ifbegin delete notification cannot be completed,end deletebegin insert law enforcement is unable to receive and record the notification,end insert require the person to continue to attemptbegin delete contactend deletebegin insert notificationend insert until the required information is providedbegin insert, as specifiedend insert.

By expanding the provisions of existing law, the violation of which is a crime, this bill would impose a state-mandated local program.

(9)  Existing law prohibits a person from driving, moving, or leaving standing upon a highway or offstreet public parking facility any motor vehicle or other specified vehicle, unless it is registered and the appropriate fees have been paid. 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 exemptbegin insert from the registration requirementend insert abegin insert vehicle obtained by aend insert licensed repossessorbegin delete who has obtainedend deletebegin insert asend insert a release of collateralbegin delete from registration solely for the purpose of obtaining a release of the collateral fromend deletebegin insert for the purpose of removing the vehicle to the storage facility or the facility of the legal owner. The bill requiresend insert a law enforcement agency, impounding authority, tow yard, storage facility, or any other person or entity that has possession of thebegin delete vehicle, as specifiedend deletebegin insert vehicle to release the vehicle without requiring current registration. The bill would require a legal owner of collateral to hold a law enforcement agency, city, county, city and county, the state, a tow yard, storage facility, or impound yard harmless from liability if collateral is released in compliance with statuteend insert.

begin delete

(10) Existing law allows the legal owner or the legal owner’s agent to obtain the release of a vehicle, after the vehicle has been removed and seized by a peace officer, as specified, from the impounding agency, by presenting specified documents. Existing law prohibits a city, county, city and county, or state agency from imposing a charge on a legal owner for administrative costs in connection with the release of properly impounded vehicle. Existing law allows a legal owner of a vehicle, or the legal owner’s agent, to obtain release of the vehicle from an impounding law enforcement agency, without payment of any fees, fines, or penalties for parking tickets or registration and without proof of current registration, if the vehicle will only be transported pursuant to a specified exemption, and the legal owner pays the cost of towing and storing the vehicle, and completes an affidavit, as specified.

end delete
begin delete

This bill would apply those provisions to a licensed repossessor seeking to obtain a release of collateral from a law enforcement agency, impounding authority, tow yard, storage facility, or any other person or entity in possession of the collateral. The bill would require a legal owner of collateral to hold those persons or entities harmless from liability if collateral is released in compliance with the bill’s provisions.

end delete
begin delete

(11) 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.

end delete
begin delete

This bill would apply those provisions to a repossession by a repossessor.

end delete
begin delete

(12)

end delete

begin insert(10)end 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 or other collateral to a storage facility, auction, or dealer by an individual who is employed by a repossession agency or is licensed as a repossession agency 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

(13)

end delete

begin insert(11)end insert 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.

begin delete

(14)

end delete

begin insert(12)end insert This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P5    1

SECTION 1.  

Section 7500.2 of the Business and Professions
2Code
is amended to read:

3

7500.2.  

(a) A repossession agency means and includes any
4person who, for any consideration whatsoever, engages in business
5or accepts employment to locate or recover collateral, whether
6voluntarily or involuntarily, including, but not limited to, collateral
7registered under the provisions of the Vehicle Code which is
8subject to a security agreement, except for any person registered
9pursuant to Article 7 (commencing with Section 7506).

10(b) A repossession agency licensed pursuant to this chapter shall
11only transact begin delete business with another person or entity as an
12independent contractor and shall not allow any other person or
13entity to operate or transact business under the license of the
14repossession agency.end delete
begin insert business.end insert

begin insert

P6    1(c) A repossession agency shall not allow a person or entity
2other than the qualified certificate holder, as provided in Section
37505.1, to manage the day to day operations, operate, control, or
4transact business covered by this act.

end insert
5

SEC. 2.  

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

7

7502.2.  

(a) A financial institution or a buy-here-pay-here
8dealer, as defined by Section 241 of the Vehicle Code, that
9knowingly engages a nonexempt unlicensed person to repossess
10collateral on its behalf is guilty of a misdemeanor, and is punishable
11by a fine of five thousand dollars ($5,000).

12(b) Within existing resources, the Commissioner of Business
13Oversight may designate employees to investigate and report on
14violations of this section by any of the licensees of the department.
15Those employees are authorized to actively cooperate with the
16bureau 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
30Attorney General, all of the penalty collected shall be deposited
31in the Private Security Services Fund.

32

SEC. 3.  

Section 7505.2 of the Business and Professions Code
33 is amended and renumbered to read:

34

7507.125.  

Nothing in this chapter prohibits the using or taking
35of personal effects that are connected, adjoined, or affixed to the
36collateral through an unbroken sequence, if that use or taking is
37reasonably necessary to effectuate the recovery in a safe manner
38or to protect the collateral or personal effects. Nothing in this
39chapter prohibits the removal of a locking mechanism or security
40device on the collateral, before, during, or after a repossession. No
P7    1storage fee shall be charged for the first week on any personal
2effects used to effectuate a recovery pursuant to this section. Any
3personal effects used or taken pursuant to this section shall be
4processed in a reasonably expedient manner pursuant to Sections
57507.9 and 7507.10.

6

SEC. 4.  

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

8

7505.3.  

(a) Whenever a qualified certificate holder actively
9in charge of an office ceases to be in charge, the licensee shall file
10with the bureau notice, in writing, within 30 days from the
11cessation.

12If the notice is filed, the license shall remain in force for a period
13of 90 days after the filing of the notice. At the end of the 90-day
14period or an additional period, not to exceed one year, as specified
15by the director, if written notice is not given that a qualified person
16is then actively in charge of the office, the agency license shall be
17automatically suspended.

18If the licensee shall fail to give written notice at the end of the
1930-day period, the agency license shall be automatically suspended.

20A license suspended under this section may be reinstated upon
21payment of the reinstatement fee and submission of a reinstatement
22application.

23A person who performs any act for which a repossession agency
24license is required during the period of suspension is subject to
25the penal provisions of Article 3 (commencing with Section 7502),
26in addition to the provisions of Article 9 (commencing with Section
277508) and Article 10 (commencing with Section 7510).

28(b) In case of the death of a person licensed as an individual, a
29member of the immediate family of the deceased licensee shall be
30entitled to continue the business under the same license for 180
31days following the death of the licensee, provided that written
32notice is made to the bureau within 30 days following the death
33of the licensee. The notice shall identify the person in charge of
34running the day-to-day operations of the business. At the end of
35the 180-day period, the license shall be automatically canceled. If
36no request is received within the 30-day period, the license shall
37be automatically canceled at the end of that period.

38(c) In the case of the death or disassociation of a partner of an
39entity licensed as a partnership, the licensee shall notify the bureau,
40in writing, within 30 days from the death or disassociation of the
P8    1individual. If notice is given, the license shall remain in force for
290 days following the death or disassociation. At the end of that
3period, the license shall be automatically canceled. If the licensee
4fails to notify the bureau within the 30-day period, the license shall
5be automatically canceled at the end of that period.

6(d) A license extended under this section is subject to all other
7provisions of this chapter.

8

SEC. 5.  

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

10

7507.3.  

A repossession agency shall be required to keep and
11maintain adequate records of all transactions, including, but not
12limited to, assignment forms; vehicle report of repossession
13required by Section 28 of the Vehicle Code; vehicle condition
14reports, including odometer readings, if available; personal effects
15inventory; and notice of seizure. Records shall be retained for a
16period of not less than four years and shall be available for
17examination by the bureau upon demand. In addition, collateral
18and personal effects storage areas shall be made accessible for
19inspection by the bureau upon demand. An assignment form may
20be an original, a photocopy, a facsimile copy, or a copy stored in
21an electronic format.

22

SEC. 6.  

Section 7507.115 of the Business and Professions
23Code
is amended to read:

24

7507.115.  

(a) A licensee shall not appraise or determine the
25value of any collateral, whether damaged or not.

26(b) (1) Notwithstanding subdivision (a), a licensee may
27complete a condition report that makes a general assessment of
28the collateral.

begin delete

29(2) Notwithstanding paragraph (1), a condition report shall not
30contain any of the following:

end delete
begin delete

31(A) A description of the wear and tear of specific parts.

end delete
begin delete

32(B) A description of the presence or absence of specific parts.

end delete
begin delete

33(C) The condition of the paint on the collateral.

end delete
begin delete

34(D) The electrical or mechanical condition.

end delete
begin delete

35(E) How the collateral drives or operates.

end delete
begin delete

36(F) The type of key used for the collateral.

end delete
begin insert

37(2) A condition report does not include all damage or missing
38parts.

end insert
begin insert

39(3) A condition report shall include the following statement:
40“In accordance with Section 7505.115 of the Business and
P9    1Professions Code, this condition report is a general assessment
2of the collateral and does not include all damage or missing parts.”

end insert
3

SEC. 7.  

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

5

7508.1.  

The director may assess administrative fines for the
6following prohibited acts:

7(a) Knowingly making any false report to his or her employer
8or client for whom information was being obtained. The fine shall
9be one hundred dollars ($100) for the first violation, and five
10hundred dollars ($500) for each violation thereafter.

11(b) Using any identification to indicate registration as a
12repossessor, other than the bureau-issued registration card, except
13an employer identification card issued by the repossession agency
14which has met bureau approval, or a badge, cap insignia, or jacket
15patch as provided in Section 7508.8. A bureau-issued registration
16card shall be carried by those individuals specified by Section
177506.3, and shall be shown on demand to any bureau employee
18or law enforcement officer. The fine shall be twenty-five dollars
19($25) for each violation.

20(c) Using an alias in connection with the official activities of
21the licensee’s business. A notice of warning shall be issued for the
22first violation. Thereafter the fine shall be twenty-five dollars ($25)
23for each violation.

24(d) Appearing as an assignee party in any court proceeding
25involving claim and delivery, replevin, or other possessory court
26action, action to foreclose a chattel mortgage, mechanic’s lien,
27materialman’s lien, or any other lien. This section shall not prohibit
28a licensee from appearing as a defendant in any of the preceding
29actions. The fine shall be one hundred dollars ($100) for each
30violation.

31

SEC. 8.  

Section 7508.4 of the Business and Professions Code
32 is amended to read:

33

7508.4.  

The director may assess administrative fines for any
34of the following prohibited acts:

35(a) Conducting business from any location other than that
36location to which a license was issued or conducting a business as
37an individual, partnership, limited liability company, or corporation
38unless the licensee holds a valid license issued to that exact same
39individual, partnership, limited liability company, or corporation.
40The fine shall be one thousand dollars ($1,000) for each violation.

P10   1(b) Aiding or abetting an unlicensed repossessor or assigning
2his or her license. “Assigning his or her license” means that no
3licensee shall permit a registrant, employee, or agent in his or her
4own name to advertise, engage clients, furnish reports, or present
5bills to clients, or in any manner whatsoever to conduct business
6for which a license is required under this chapter. The fine shall
7be one thousand dollars ($1,000) for each violation.

8(c) Failing to register registrants within 15 days. The fine shall
9be two hundred fifty dollars ($250) for each of the first two
10violations and one thousand dollars ($1,000) for each violation
11thereafter.

12(d) Employing a person whose registration has expired or been
13revoked, denied, suspended, or canceled, if the bureau has furnished
14a listing of these persons to the licensee. The fine shall be
15twenty-five dollars ($25) for each violation.

16(e) Failing to notify the bureau, within 30 days, of any change
17in officers. A notice of warning shall be issued for the first
18violation. Thereafter, the fine shall be twenty-five dollars ($25)
19for each violation.

20(f) Failing to submit the notices regarding a violent act or
21threatened violent act within seven days pursuant to Section 7507.6
22or to submit a copy of a judgment awarded against the licensee
23for an amount of more than the then prevailing maximum claim
24that may be brought in small claims court within seven days
25pursuant to Section 7507.7. The fine shall be twenty-five dollars
26($25) for the first violation and one hundred dollars ($100) per
27violation thereafter.

28(g) Failing to include the licensee’s name, address, and license
29number in any advertisement. A notice of warning shall be issued
30for the first violation. Thereafter, the fine shall be twenty-five
31dollars ($25) for each violation.

32(h) Failing to maintain personal effects for at least 60 days. The
33fine shall be twenty-five dollars ($25) for the first violation and
34one hundred dollars ($100) for each violation thereafter.

35(i) Failing to provide a personal effects list or a notice of seizure
36within the time limits set forth in Section 7507.9 or 7507.10. The
37fine shall be twenty-five dollars ($25) for the first violation and
38one hundred dollars ($100) for each violation thereafter.

39(j) Failing to file the required report pursuant to Section 28 of
40the Vehicle Code. The fine shall be twenty-five dollars ($25) for
P11   1each of the first five violations and one hundred dollars ($100) for
2each violation thereafter, per audit.

3(k) Failing to maintain an accurate record and accounting of
4secure temporary registration forms. The qualified certificate holder
5shall be fined twenty-five dollars ($25) for the first violation, one
6hundred dollars ($100) for the second violation, two hundred fifty
7dollars ($250) for the third violation, and two hundred fifty dollars
8($250) plus a one-year suspension of the privilege to issue
9temporary registrations pursuant to Section 7506.9 for the fourth
10and subsequent violations.

11(l) Representing that a licensee has an office and conducts
12business at a specific address when that is not the case. The fine
13shall be five thousand dollars ($5,000) for each violation.

14(m) Notwithstanding any other provision of law, the money in
15the Private Security Services Fund that is attributable to
16administrative fines imposed pursuant to subdivision (c) shall not
17be continuously appropriated and shall be available for expenditure
18only upon appropriation by the Legislature.

19

SEC. 9.  

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

21

7508.5.  

The director may assess administrative fines against
22a repossession agency registrant for the following acts, in addition
23to fines imposed pursuant to any other section in this article. The
24fine shall be twenty-five dollars ($25) for each of the following
25violations:

26(a) Knowingly submit a false report.

27(b) Submitting a report to a client without authorization by his
28or her employer.

29(c) Failing to carry a bureau-issued identification card and failing
30to show that card upon demand to a bureau employee or a law
31enforcement officer.

32(d) Failing to register.

33(e) Failing to return his or her registration card to the employer
34upon termination.

35(f) Failing to report a violent act involving the registrant to the
36licensee or the licensee’s qualified certificate holder within 24
37hours.

38

SEC. 10.  

Section 41612 of the Government Code is amended
39to read:

P12   1

41612.  

After possession is taken of any vehicle by or on behalf
2of any legal owner thereof under the terms of a security agreement
3or lease agreement, the debtor shall pay the chief of police or a
4parking authority operated by a city and county a fee of fifteen
5dollars ($15) for the receipt and filing of the report of repossession
6pursuant to Section 28 of the Vehicle Code before the vehicle may
7be redeemed by the debtor. Any person in possession of the vehicle
8shall not release it to the debtor without first obtaining proof of
9payment of the fee to the chief of police or parking authority. The
10proof of payment, or a copy thereof, shall be retained by the party
11releasing possession to the debtor for the period required by law.
12An individual working for a repossession agency licensed pursuant
13to Chapter 11 (commencing with Section 7500) of Division 3 of
14the Business and Professions Code shall not pay the fee to, or
15retrieve the receipt from, the chief of police or parking authority.

16

SEC. 11.  

Section 28 of the Vehicle Code is amended to read:

17

28.  

(a) Whenever possession is taken of any vehicle by or on
18behalf of its legal owner under the terms of a security agreement
19or lease agreement, the person taking possession shall contact, for
20the purpose of providing the information required pursuant to
21subdivision (d) within one hour, after taking possession of the
22vehicle, by the most expeditious means available, the city police
23department where the taking of possession occurred, if within an
24incorporated city, or the sheriff’s department of the county where
25the taking of possession occurred, if outside an incorporated city,
26or the police department of a campus of the University of California
27or the California State University, if the taking of possession
28occurred on that campus, and shall within one business day forward
29a written notice to the city police or sheriff’s department.begin delete If
30notification cannot be completed,end delete
begin insert If, after an attempt to notify, law
31enforcement is unable to receive and record the notification
32required pursuant to subdivision (d),end insert
the person taking possession
33of the vehicle shall continue to attemptbegin delete contactend deletebegin insert notificationend insert until
34the information required pursuant to subdivision (d) is provided.

35(b) If possession is taken of more than one vehicle, the
36possession of each vehicle shall be considered and reported as a
37separate event.

38(c) Any person failing to notify the city police department,
39sheriff’s department, or campus police department as required by
40this section is guilty of an infraction, and shall be fined a minimum
P13   1of three hundred dollars ($300), and up to five hundred dollars
2($500). The district attorney, city attorney, or city prosecutor shall
3promptly notify the Bureau of Security and Investigative Services
4of any conviction resulting from a violation of this section.

5(d) For the notification required by this section, the person shall
6report only the following information and in the following order:

7(1) The approximate location of the repossession.

8(2) The date and approximate time of the repossession.

9(3) The vehicle year, make, and model.

10(4) The last six digits of the vehicle identification number.

11(5) The registered owner as provided on the repossession
12assignment.

13(6) The legal owner requesting the repossession as provided on
14the repossession assignment.

15(7) The name of the repossession agency.

16(8) The telephone number of the repossession agency.

17

SEC. 12.  

Section 4000 of the Vehicle Code is amended to read:

18

4000.  

(a) (1) A person shall not drive, move, or leave standing
19upon a highway, or in an offstreet public parking facility, any
20motor vehicle, trailer, semitrailer, pole or pipe dolly, or logging
21dolly, unless it is registered and the appropriate fees have been
22paid under this code or registered under the permanent trailer
23identification program, except that an off-highway motor vehicle
24which displays an identification plate or device issued by the
25department pursuant to Section 38010 may be driven, moved, or
26left standing in an offstreet public parking facility without being
27registered or paying registration fees.

28(2) For purposes of this subdivision, “offstreet public parking
29facility” means either of the following:

30(A) Any publicly owned parking facility.

31(B) Any privately owned parking facility for which no fee for
32the privilege to park is charged and which is held open for the
33common public use of retail customers.

34(3) This subdivision does not apply to any motor vehicle stored
35in a privately owned offstreet parking facility by, or with the
36express permission of, the owner of the privately owned offstreet
37parking facility.

38(4) Beginning July 1, 2011, the enforcement of paragraph (1)
39shall commence on the first day of the second month following
P14   1the month of expiration of the vehicle’s registration. This paragraph
2shall become inoperative on January 1, 2012.

3(b) No person shall drive, move, or leave standing upon a
4highway any motor vehicle, as defined in Chapter 2 (commencing
5with Section 39010) of Part 1 of Division 26 of the Health and
6Safety Code, that has been registered in violation of Part 5
7(commencing with Section 43000) of Division 26 of the Health
8and Safety Code.

9(c) Subdivisions (a) and (b) do not apply to off-highway motor
10vehicles operated pursuant to Sections 38025 and 38026.5.

11(d) This section does not apply, following payment of fees due
12for registration, during the time that registration and transfer is
13being withheld by the department pending the investigation of any
14use tax due under the Revenue and Taxation Code.

15(e) Subdivision (a) does not apply to a vehicle that is towed by
16a tow truck on the order of a sheriff, marshal, or other official
17acting pursuant to a court order or on the order of a peace officer
18acting pursuant to this code.

19(f) Subdivision (a) applies to a vehicle that is towed from a
20highway or offstreet parking facility under the direction of a
21highway service organization when that organization is providing
22emergency roadside assistance to that vehicle. However, the
23operator of a tow truck providing that assistance to that vehicle is
24not responsible for the violation of subdivision (a) with respect to
25that vehicle. The owner of an unregistered vehicle that is disabled
26and located on private property, shall obtain a permit from the
27department pursuant to Section 4003 prior to having the vehicle
28towed on the highway.

begin delete

29(g) (1) A licensed repossessor who has obtained a release of
30collateral is exempt from this section solely for the purpose of
31obtaining the collateral pursuant to that release from a law
32enforcement agency, impounding authority, tow yard, storage
33facility, or any other person or entity in possession of the collateral.

34(2) A licensed repossessor is exempt from this section solely
35for the purpose of obtaining collateral from a law enforcement
36agency, impounding authority, tow yard, storage facility, or any
37other person or company that has possession of the collateral.

38(3) In order to obtain a release of the collateral from a law
39enforcement agency, impounding authority, tow yard, storage
40facility, or any other person or company pursuant to paragraph (1)
P15   1or (2), a licensed repossessor shall only be required to present his
2or her repossessor license and a copy of the repossessor assignment
3to that entity or person.

4(4) For purposes of paragraph (1), paragraphs (3) and (4) of
5subdivision (f) of Section 14602.6, and subparagraph (B) of
6paragraph (3) of subdivision (o) of Section 22651 apply.

end delete
begin insert

7(g) (1) Pursuant to Section 4022 and to subparagraph (B) of
8paragraph (3) of subdivision (o) of Section 22651, a vehicle
9obtained by a licensed repossessor removing the vehicle to his or
10her storage facility or the facility of the legal owner. A law
11enforcement agency, impounding authority, tow yard, storage
12facility, or any other person in possession of the collateral shall
13release the vehicle without requiring current registration and
14pursuant to subdivision (f) of Section 14602.6.

end insert
begin delete

25 15(5)

end delete

16begin insert(2)end insert The legal owner of collateral shall, by operation of law and
17without requiring further action, indemnify and hold harmless a
18law enforcement agency, city, county, city and county, the state,
19a tow yard, storage facility, or an impounding yard from a claim
20arising out of the release of the collateral to a licensee, and from
21any damage to the collateral after its release, including reasonable
22attorney’s fees and costs associated with defending a claim, if the
23collateral was released in compliance with this subdivision.

24(h) For purposes of this section, possession of a California
25driver’s license by the registered owner of a vehicle shall give rise
26to a rebuttable presumption that the owner is a resident of
27California.

begin delete
28

SEC. 13.  

Section 9561 of the Vehicle Code is amended to read:

29

9561.  

(a) When a legal owner, his or her agent, or a repossessor
30who is licensed pursuant to Chapter 11 (commencing with Section
317500) of Division 3 of the Business and Professions Code
32repossesses a vehicle on which renewal fees are due, the department
33shall waive any renewal penalties that are due for late payment if
34the fees are paid within 60 days of taking possession.

35(b) Notwithstanding any other provisions of this code, when a
36repossessed vehicle is sold through a dealer conducting a wholesale
37motor vehicle auction as provided in subdivision (b) of Section
384456 and Article 5 (commencing with Section 6100) of Chapter
392 of Division 3, any penalties that may be due are waived, if all
P16   1renewal fees that are due are paid not later than 60 days after the
2date of sale at the auction.

end delete
3

begin deleteSEC. 14.end delete
4begin insertSEC. 13.end insert  

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

5

10856.  

(a) A person shall not interfere with the transport of a
6vehicle to a storage facility, auction, or dealer by an individual
7who is employed by a repossession agency or who is licensed
8pursuant to Chapter 11 (commencing with Section 7500) of
9Division 3 of the Business and Professions Code once repossession
10is complete as provided in Section 7507.12 of the Business and
11Professions Code.begin insert This subdivision shall not apply to a peace
12officer while acting in an official capacity.end insert

13(b) Any tow yard, impounding agency, or governmental agency,
14or any person acting on behalf of those entities, shall not refuse to
15release a vehicle or other collateral to anyone that is legally entitled
16to that vehicle or other collateral.begin insert This subdivision shall not apply
17to a vehicle being held for evidence by law enforcement or a
18prosecuting attorney.end insert

19

begin deleteSEC. 15.end delete
20begin insertSEC. 14.end insert  

Section 11705 of the Vehicle Code is amended to
21read:

22

11705.  

(a) The department, after notice and hearing, may
23suspend or revoke the license issued to a dealer, transporter,
24manufacturer, manufacturer branch, remanufacturer,
25remanufacturer branch, distributor, or distributor branch upon
26determining that the person to whom the license was issued is not
27lawfully entitled thereto, or has done any of the following:

28(1) Filed an application for the license using a false or fictitious
29name not registered with the proper authorities, or knowingly made
30a false statement or knowingly concealed a material fact, in the
31application for the license.

32(2) Made, or knowingly or negligently permitted, an illegal use
33of the special plates issued to the licensee.

34(3) Used a false or fictitious name, knowingly made a false
35statement, or knowingly concealed a material fact, in an application
36for the registration of a vehicle, or otherwise committed a fraud
37in the application.

38(4) Failed to deliver to a transferee lawfully entitled thereto a
39properly endorsed certificate of ownership.

P17   1(5) Knowingly purchased, sold, or otherwise acquired or
2disposed of a stolen motor vehicle.

3(6) Failed to provide and maintain a clear physical division
4between the type of business licensed pursuant to this chapter and
5any other type of business conducted at the established place of
6business.

7(7) Willfully violated Section 3064 or 3065 or any rule or
8regulation adopted pursuant thereto.

9(8) Violated any provision of Division 3 (commencing with
10Section 4000) or any rule or regulation adopted pursuant thereto,
11or subdivision (a) of Section 38200.

12(9) Violated any provision of Division 4 (commencing with
13Section 10500) or any rule or regulation adopted pursuant thereto.

14(10) Violated any provision of Article 1 (commencing with
15Section 11700) of Chapter 4 of Division 5 or any rule or regulation
16adopted pursuant thereto.

17(11) Violated any provision of Part 5 (commencing with Section
1810701) of Division 2 of the Revenue and Taxation Code or any
19rule or regulation adopted pursuant thereto.

20(12) Violated any provision of Chapter 3332b (commencing
21with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil
22Code or any rule or regulation adopted pursuant thereto.

23(13) Submitted a check, draft, or money order to the department
24for any obligation or fee due the state which was dishonored or
25refused payment upon presentation.

26(14) Has caused any person to suffer any loss or damage by
27reason of any fraud or deceit practiced on that person or fraudulent
28representations made to that person in the course of the licensed
29activity.

30For purposes of this paragraph, “fraud” includes any act or
31omission which is included within the definition of either “actual
32fraud” or “constructive fraud” as defined in Sections 1572 and
331573 of the Civil Code, and “deceit” has the same meaning as
34defined in Section 1710 of the Civil Code. In addition, “fraud”
35and “deceit” include, but are not limited to, a misrepresentation in
36any manner, whether intentionally false or due to gross negligence,
37of a material fact; a promise or representation not made honestly
38and in good faith; an intentional failure to disclose a material fact;
39and any act within Section 484 of the Penal Code.

P18   1For purposes of this paragraph, “person” also includes a
2governmental entity.

3(15) Failed to meet the terms and conditions of an agreement
4entered into pursuant to Section 11707.

5(16) Violated Section 43151, 43152, or 43153 of, or subdivision
6(b) of Section 44072.10 of, the Health and Safety Code.

7(17) Failed to repay a claim paid by the Consumer Motor
8Vehicle Recovery Corporation as provided in subdivision (i) of
9Section 11703.

10(18) begin deleteViolated end deletebegin insertAs a buy-here-pay-here dealer, violated end insertany
11provision of Chapter 11 (commencing with Section 7500) of
12Divisions 3 of the Business and Professions Code or any rule or
13regulation adopted pursuant to those provisions.

14(b) Any of the causes specified in this chapter as a cause for
15refusal to issue a license to a transporter, manufacturer,
16manufacturer branch, remanufacturer, remanufacturer branch,
17distributor, distributor branch, or dealer applicant is cause to
18suspend or revoke a license issued to a transporter, manufacturer,
19manufacturer branch, remanufacturer, remanufacturer branch,
20distributor, distributor branch, or dealer.

21(c) Except as provided in Section 11707, every hearing provided
22for in this section shall be conducted pursuant to Chapter 5
23(commencing with Section 11500) of Part 1 of Division 3 of Title
242 of the Government Code.

25

begin deleteSEC. 16.end delete
26begin insertSEC. 15.end insert  

No reimbursement is required by this act pursuant to
27Section 6 of Article XIII B of the California Constitution because
28the only costs that may be incurred by a local agency or school
29district will be incurred because this act creates a new crime or
30infraction, eliminates a crime or infraction, or changes the penalty
31for a crime or infraction, within the meaning of Section 17556 of
32the Government Code, or changes the definition of a crime within
33the meaning of Section 6 of Article XIII B of the California
34Constitution.

35

begin deleteSEC. 17.end delete
36begin insertSEC. 16.end insert  

This act is an urgency statute necessary for the
37immediate preservation of the public peace, health, or safety within
38the meaning of Article IV of the Constitution and shall go into
39immediate effect. The facts constituting the necessity are:

P19   1In order to preserve public peace by prohibiting a person from
2interfering with the transport of a vehicle to a storage facility,
3auction, or dealer by a repossessor, it is necessary that this act take
4effect immediately.



O

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