Amended in Senate August 19, 2014

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,begin delete 7505.3, 7507.3,end delete 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, 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 allowing a person or entity, other than the qualified certificate holderbegin insert or the owner or officer of the repossession agencyend insert, to manage the day to day operations, operate, control, or transact business under the license of the repossession agencybegin insert, except as specifiedend insert. 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.

begin delete

(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.

end delete
begin delete

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.

end delete
begin delete

(4)

end delete

begin insert(3)end insert 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 also require a specified statement on condition reports and would specify that condition reports do not include all damage or missing parts. By expanding the scope of a crime, the bill would impose a state-mandated local program.

begin delete

(5)

end delete

begin insert(4)end 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

(6)

end delete

begin insert(5)end insert 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.

begin delete

(7)

end delete

begin insert(6)end insert 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.

begin delete

(8)

end delete

begin insert(7)end 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 contact law enforcement within one hour of the repossession, would specify information that would be required to be provided in the notification, and, if law enforcement is unable to receive and record the notification, require the person to continue to attempt notification until the required information is provided, as specified.

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

(9)

end delete

begin insert(8)end insert 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 exempt from the registration requirement a vehicle obtained by a licensed repossessor as a release of collateral for the purpose of removing the vehicle to the storage facility or the facility of the legal owner. The bill requires a law enforcement agency, impounding authority, tow yard, storage facility, or any other person or entity that has possession of the 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 statute.

begin delete

(10)

end delete

begin insert(9)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

(11)

end delete

begin insert(10)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

(12)

end delete

begin insert(11)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 transactbegin delete business.end deletebegin insert business with another person or entity as
12an independent contractor.end insert

13(c) A repossession agency shall not allow a person or entity
14other than the qualified certificate holder, as provided in Section
157505.1,begin insert or the owner or officer of the repossession agency,end insert to
16manage the day to day operations, operate, control, or transact
17business covered by this actbegin insert, except as provided in Section 7503.3end insert.

18

SEC. 2.  

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

20

7502.2.  

(a) A financial institution or a buy-here-pay-here
21dealer, as defined by Section 241 of the Vehicle Code, that
22knowingly engages a nonexempt unlicensed person to repossess
23collateral on its behalf is guilty of a misdemeanor, and is punishable
24by a fine of five thousand dollars ($5,000).

25(b) Within existing resources, the Commissioner of Business
26Oversight may designate employees to investigate and report on
27violations of this section by any of the licensees ofbegin delete theend deletebegin insert theirend insert
28 department. Those employees are authorized to actively cooperate
29with the bureau in the investigation of those activities.

30(c) A proceeding to impose the fine specified in subdivision (a)
31may be brought in any court of competent jurisdiction in the name
32of the people of the State of California by the Attorney General
33or by any district attorney or city attorney, or with the consent of
34the district attorney, by the city prosecutor in any city or city and
35county having a full-time city prosecutor, for the jurisdiction in
36which the violation occurred. If the action is brought by a district
37attorney, the penalty collected shall be paid to the treasurer of the
38county in which the judgment is entered. If the action is brought
P6    1by a city attorney or city prosecutor, one-half of the penalty
2collected shall be paid to the treasurer of the city in which the
3judgment was entered and one-half to the treasurer of the county
4in which the judgment was entered. If the action is brought by the
5Attorney General, all of the penalty collected shall be deposited
6in the Private Security Services Fund.

7

SEC. 3.  

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

9

7507.125.  

Nothing in this chapter prohibits the using or taking
10of personal effects that are connected, adjoined, or affixed to the
11collateral through an unbroken sequence, if that use or taking is
12reasonably necessary to effectuate the recovery in a safe manner
13or to protect the collateral or personal effects. Nothing in this
14chapter prohibits the removal of a locking mechanism or security
15device on the collateral, before, during, or after a repossession. No
16storage fee shall be charged for the first week on any personal
17effects used to effectuate a recovery pursuant to this section. Any
18personal effects used or taken pursuant to this section shall be
19processed in a reasonably expedient manner pursuant to Sections
207507.9 and 7507.10.

begin delete
21

SEC. 4.  

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

23

7505.3.  

(a) Whenever a qualified certificate holder actively
24in charge of an office ceases to be in charge, the licensee shall file
25with the bureau notice, in writing, within 30 days from the
26cessation.

27If the notice is filed, the license shall remain in force for a period
28of 90 days after the filing of the notice. At the end of the 90-day
29period or an additional period, not to exceed one year, as specified
30by the director, if written notice is not given that a qualified person
31is then actively in charge of the office, the agency license shall be
32automatically suspended.

33If the licensee shall fail to give written notice at the end of the
34 30-day period, the agency license shall be automatically suspended.

35A license suspended under this section may be reinstated upon
36payment of the reinstatement fee and submission of a reinstatement
37application.

38A person who performs any act for which a repossession agency
39license is required during the period of suspension is subject to
40the penal provisions of Article 3 (commencing with Section 7502),
P7    1in addition to the provisions of Article 9 (commencing with Section
27508) and Article 10 (commencing with Section 7510).

3(b) In case of the death of a person licensed as an individual, a
4member of the immediate family of the deceased licensee shall be
5entitled to continue the business under the same license for 180
6days following the death of the licensee, provided that written
7notice is made to the bureau within 30 days following the death
8of the licensee. The notice shall identify the person in charge of
9running the day-to-day operations of the business. At the end of
10the 180-day period, the license shall be automatically canceled. If
11no request is received within the 30-day period, the license shall
12be automatically canceled at the end of that period.

13(c) In the case of the death or disassociation of a partner of an
14entity licensed as a partnership, the licensee shall notify the bureau,
15in writing, within 30 days from the death or disassociation of the
16individual. If notice is given, the license shall remain in force for
1790 days following the death or disassociation. At the end of that
18period, the license shall be automatically canceled. If the licensee
19fails to notify the bureau within the 30-day period, the license shall
20be automatically canceled at the end of that period.

21(d) A license extended under this section is subject to all other
22provisions of this chapter.

23

SEC. 5.  

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

25

7507.3.  

A repossession agency shall be required to keep and
26maintain adequate records of all transactions, including, but not
27limited to, assignment forms; vehicle report of repossession
28required by Section 28 of the Vehicle Code; vehicle condition
29reports, including odometer readings, if available; personal effects
30inventory; and notice of seizure. Records shall be retained for a
31period of not less than four years and shall be available for
32examination by the bureau upon demand. In addition, collateral
33and personal effects storage areas shall be made accessible for
34inspection by the bureau upon demand. An assignment form may
35be an original, a photocopy, a facsimile copy, or a copy stored in
36an electronic format.

end delete
37

begin deleteSEC. 6.end delete
38begin insertSEC. 4.end insert  

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

P8    1

7507.115.  

(a) A licensee shall not appraise or determine the
2value of any collateral, whether damaged or not.

3(b) (1) Notwithstanding subdivision (a), a licensee may
4complete a condition report that makes a general assessment of
5the collateral.

6(2) A condition report does not include all damage or missing
7parts.

8(3) A condition report shall include the following statement:
9“In accordance with Section 7505.115 of the Business and
10Professions Code, this condition report is a general assessment of
11the collateral and does not include all damage or missing parts.”

12

begin deleteSEC. 7.end delete
13begin insertSEC. 5.end insert  

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

15

7508.1.  

The director may assess administrative fines for the
16following prohibited acts:

17(a) Knowingly making any false report to his or her employer
18or client for whom information was being obtained. The fine shall
19be one hundred dollars ($100) for the first violation, and five
20hundred dollars ($500) for each violation thereafter.

21(b) Using any identification to indicate registration as a
22repossessor, other than the bureau-issued registration card, except
23an employer identification card issued by the repossession agency
24which has met bureau approval, or a badge, cap insignia, or jacket
25patch as provided in Section 7508.8. A bureau-issued registration
26card shall be carried by those individuals specified by Section
277506.3, and shall be shown on demand to any bureau employee
28or law enforcement officer. The fine shall be twenty-five dollars
29($25) for each violation.

30(c) Using an alias in connection with the official activities of
31the licensee’s business. A notice of warning shall be issued for the
32first violation. Thereafter the fine shall be twenty-five dollars ($25)
33for each violation.

34(d) Appearing as an assignee party in any court proceeding
35involving claim and delivery, replevin, or other possessory court
36action, action to foreclose a chattel mortgage, mechanic’s lien,
37materialman’s lien, or any other lien. This section shall not prohibit
38a licensee from appearing as a defendant in any of the preceding
39actions. The fine shall be one hundred dollars ($100) for each
40violation.

P9    1

begin deleteSEC. 8.end delete
2begin insertSEC. 6.end insert  

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

4

7508.4.  

The director may assess administrative fines for any
5of the following prohibited acts:

6(a) Conducting business from any location other than that
7location to which a license was issued or conducting a business as
8an individual, partnership, limited liability company, or corporation
9unless the licensee holds a valid license issued to that exact same
10individual, partnership, limited liability company, or corporation.
11The fine shall be one thousand dollars ($1,000) for each violation.

12(b) Aiding or abetting an unlicensed repossessor or assigning
13his or her license. “Assigning his or her license” means that no
14licensee shall permit a registrant, employee, or agent in his or her
15own name to advertise, engage clients, furnish reports, or present
16bills to clients, or in any manner whatsoever to conduct business
17for which a license is required under this chapter. The fine shall
18be one thousand dollars ($1,000) for each violation.

19(c) Failing to register registrants within 15 days. The fine shall
20be two hundred fifty dollars ($250) for each of the first two
21violations and one thousand dollars ($1,000) for each violation
22thereafter.

23(d) Employing a person whose registration has expired or been
24revoked, denied, suspended, or canceled, if the bureau has furnished
25a listing of these persons to the licensee. The fine shall be
26twenty-five dollars ($25) for each violation.

27(e) Failing to notify the bureau, within 30 days, of any change
28in officers. A notice of warning shall be issued for the first
29violation. Thereafter, the fine shall be twenty-five dollars ($25)
30for each violation.

31(f) Failing to submit the notices regarding a violent act or
32threatened violent act within seven days pursuant to Section 7507.6
33or to submit a copy of a judgment awarded against the licensee
34for an amount of more than the then prevailing maximum claim
35that may be brought in small claims court within seven days
36pursuant to Section 7507.7. The fine shall be twenty-five dollars
37($25) for the first violation and one hundred dollars ($100) per
38violation thereafter.

39(g) Failing to include the licensee’s name, address, and license
40number in any advertisement. A notice of warning shall be issued
P10   1for the first violation. Thereafter, the fine shall be twenty-five
2dollars ($25) for each violation.

3(h) Failing to maintain personal effects for at least 60 days. The
4fine shall be twenty-five dollars ($25) for the first violation and
5one hundred dollars ($100) for each violation thereafter.

6(i) Failing to provide a personal effects list or a notice of seizure
7within the time limits set forth in Section 7507.9 or 7507.10. The
8fine shall be twenty-five dollars ($25) for the first violation and
9one hundred dollars ($100) for each violation thereafter.

10(j) Failing to file the required report pursuant to Section 28 of
11the Vehicle Code. The fine shall be twenty-five dollars ($25) for
12each of the first five violations and one hundred dollars ($100) for
13each violation thereafter, per audit.

14(k) Failing to maintain an accurate record and accounting of
15secure temporary registration forms. The qualified certificate holder
16shall be fined twenty-five dollars ($25) for the first violation, one
17hundred dollars ($100) for the second violation, two hundred fifty
18dollars ($250) for the third violation, and two hundred fifty dollars
19($250) plus a one-year suspension of the privilege to issue
20temporary registrations pursuant to Section 7506.9 for the fourth
21and subsequent violations.

22(l) Representing that a licensee has an office and conducts
23business at a specific address when that is not the case. The fine
24shall be five thousand dollars ($5,000) for each violation.

25(m) Notwithstanding any other provision of law, the money in
26the Private Security Services Fund that is attributable to
27administrative fines imposed pursuant to subdivision (c) shall not
28be continuously appropriated and shall be available for expenditure
29only upon appropriation by the Legislature.

30

begin deleteSEC. 9.end delete
31begin insertSEC. 7.end insert  

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

33

7508.5.  

The director may assess administrative fines against
34a repossession agency registrant for the following acts, in addition
35to fines imposed pursuant to any other section in this article. The
36fine shall be twenty-five dollars ($25) for each of the following
37violations:

38(a) Knowingly submit a false report.

39(b) Submitting a report to a client without authorization by his
40or her employer.

P11   1(c) Failing to carry a bureau-issued identification card and failing
2to show that card upon demand to a bureau employee or a law
3enforcement officer.

4(d) Failing to register.

5(e) Failing to return his or her registration card to the employer
6upon termination.

7(f) Failing to report a violent act involving the registrant to the
8licensee or the licensee’s qualified certificate holder within 24
9hours.

10

begin deleteSEC. 10.end delete
11begin insertSEC. 8.end insert  

Section 41612 of the Government Code is amended
12to read:

13

41612.  

After possession is taken of any vehicle by or on behalf
14of any legal owner thereof under the terms of a security agreement
15or lease agreement, the debtor shall pay the chief of police or a
16parking authority operated by a city and county a fee of fifteen
17dollars ($15) for the receipt and filing of the report of repossession
18pursuant to Section 28 of the Vehicle Code before the vehicle may
19be redeemed by the debtor. Any person in possession of the vehicle
20shall not release it to the debtor without first obtaining proof of
21payment of the fee to the chief of police or parking authority. The
22proof of payment, or a copy thereof, shall be retained by the party
23releasing possession to the debtor for the period required by law.
24An individual working for a repossession agency licensed pursuant
25to Chapter 11 (commencing with Section 7500) of Division 3 of
26the Business and Professions Code shall not pay the fee to, or
27retrieve the receipt from, the chief of police or parking authority.

28

begin deleteSEC. 11.end delete
29begin insertSEC. 9.end insert  

Section 28 of the Vehicle Code is amended to read:

30

28.  

(a) Whenever possession is taken of any vehicle by or on
31behalf of its legal owner under the terms of a security agreement
32or lease agreement, the person taking possession shall contact, for
33the purpose of providing the information required pursuant to
34subdivision (d) within one hour, after taking possession of the
35vehicle, by the most expeditious means available, the city police
36department where the taking of possession occurred, if within an
37incorporated city, or the sheriff’s department of the county where
38the taking of possession occurred, if outside an incorporated city,
39or the police department of a campus of the University of California
40or the California State University, if the taking of possession
P12   1occurred on that campus, and shall within one business day forward
2a written notice to the city police or sheriff’s department. If, after
3an attempt to notify, law enforcement is unable to receive and
4record the notification required pursuant to subdivision (d), the
5person taking possession of the vehicle shall continue to attempt
6notification until the information required pursuant to subdivision
7(d) is provided.

8(b) If possession is taken of more than one vehicle, the
9possession of each vehicle shall be considered and reported as a
10separate event.

11(c) Any person failing to notify the city police department,
12sheriff’s department, or campus police department as required by
13this section is guilty of an infraction, and shall be fined a minimum
14of three hundred dollars ($300), and up to five hundred dollars
15($500). The district attorney, city attorney, or city prosecutor shall
16promptly notify the Bureau of Security and Investigative Services
17of any conviction resulting from a violation of this section.

18(d) For the notification required by this section, the person shall
19report only the following information and in the following order:

20(1) The approximate location of the repossession.

21(2) The date and approximate time of the repossession.

22(3) The vehicle year, make, and model.

23(4) The last six digits of the vehicle identification number.

24(5) The registered owner as provided on the repossession
25assignment.

26(6) The legal owner requesting the repossession as provided on
27the repossession assignment.

28(7) The name of the repossession agency.

29(8) The telephone number of the repossession agency.

30

begin deleteSEC. 12.end delete
31begin insertSEC. 10.end insert  

Section 4000 of the Vehicle Code is amended to read:

32

4000.  

(a) (1) A person shall not drive, move, or leave standing
33upon a highway, or in an offstreet public parking facility, any
34motor vehicle, trailer, semitrailer, pole or pipe dolly, or logging
35dolly, unless it is registered and the appropriate fees have been
36paid under this code or registered under the permanent trailer
37identification program, except that an off-highway motor vehicle
38which displays an identification plate or device issued by the
39department pursuant to Section 38010 may be driven, moved, or
P13   1left standing in an offstreet public parking facility without being
2registered or paying registration fees.

3(2) For purposes of this subdivision, “offstreet public parking
4facility” means either of the following:

5(A) Any publicly owned parking facility.

6(B) Any privately owned parking facility for which no fee for
7the privilege to park is charged and which is held open for the
8common public use of retail customers.

9(3) This subdivision does not apply to any motor vehicle stored
10in a privately owned offstreet parking facility by, or with the
11express permission of, the owner of the privately owned offstreet
12parking facility.

13(4) Beginning July 1, 2011, the enforcement of paragraph (1)
14shall commence on the first day of the second month following
15the month of expiration of the vehicle’s registration. This paragraph
16shall become inoperative on January 1, 2012.

17(b) No person shall drive, move, or leave standing upon a
18highway any motor vehicle, as defined in Chapter 2 (commencing
19with Section 39010) of Part 1 of Division 26 of the Health and
20Safety Code, that has been registered in violation of Part 5
21(commencing with Section 43000) of Division 26 of the Health
22and Safety Code.

23(c) Subdivisions (a) and (b) do not apply to off-highway motor
24vehicles operated pursuant to Sections 38025 and 38026.5.

25(d) This section does not apply, following payment of fees due
26for registration, during the time that registration and transfer is
27being withheld by the department pending the investigation of any
28use tax due under the Revenue and Taxation Code.

29(e) Subdivision (a) does not apply to a vehicle that is towed by
30a tow truck on the order of a sheriff, marshal, or other official
31acting pursuant to a court order or on the order of a peace officer
32acting pursuant to this code.

33(f) Subdivision (a) applies to a vehicle that is towed from a
34highway or offstreet parking facility under the direction of a
35highway service organization when that organization is providing
36emergency roadside assistance to that vehicle. However, the
37operator of a tow truck providing that assistance to that vehicle is
38not responsible for the violation of subdivision (a) with respect to
39that vehicle. The owner of an unregistered vehicle that is disabled
40and located on private property, shall obtain a permit from the
P14   1department pursuant to Section 4003 prior to having the vehicle
2towed on the highway.

3(g) (1) Pursuant to Section 4022 and to subparagraph (B) of
4paragraph (3) of subdivision (o) of Section 22651, a vehicle
5obtained by a licensed repossessorbegin insert as a release of collateral is
6exempt from registration pursuant to this section for purposes of
7the repossessorend insert
removing the vehicle to his or her storage facility
8or the facility of the legal owner. A law enforcement agency,
9impounding authority, tow yard, storage facility, or any other
10person in possession of the collateral shall release the vehicle
11without requiring current registration and pursuant to subdivision
12(f) of Section 14602.6.

13(2) The legal owner of collateral shall, by operation of law and
14without requiring further action, indemnify and hold harmless a
15law enforcement agency, city, county, city and county, the state,
16a tow yard, storage facility, or an impounding yard from a claim
17arising out of the release of the collateral to a licensee, and from
18any damage to the collateral after its release, including reasonable
19attorney’s fees and costs associated with defending a claim, if the
20collateral was released in compliance with this subdivision.

21(h) For purposes of this section, possession of a California
22driver’s license by the registered owner of a vehicle shall give rise
23to a rebuttable presumption that the owner is a resident of
24California.

25

begin deleteSEC. 13.end delete
26begin insertSEC. 11.end insert  

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

27

10856.  

(a) A person shall not interfere with the transport of a
28vehicle to a storage facility, auction, or dealer by an individual
29who is employed by a repossession agency or who is licensed
30pursuant to Chapter 11 (commencing with Section 7500) of
31Division 3 of the Business and Professions Code once repossession
32is complete as provided in Section 7507.12 of the Business and
33Professions Code. This subdivision shall not apply to a peace
34officer while acting in an official capacity.

35(b) Any tow yard, impounding agency, or governmental agency,
36or any person acting on behalf of those entities, shall not refuse to
37release a vehicle or other collateral to anyone that is legally entitled
38to that vehicle or other collateral. This subdivision shall not apply
39to a vehicle being held for evidence by law enforcement or a
40prosecuting attorney.

P15   1

begin deleteSEC. 14.end delete
2begin insertSEC. 12.end insert  

Section 11705 of the Vehicle Code is amended to
3read:

4

11705.  

(a) The department, after notice and hearing, may
5suspend or revoke the license issued to a dealer, transporter,
6manufacturer, manufacturer branch, remanufacturer,
7remanufacturer branch, distributor, or distributor branch upon
8determining that the person to whom the license was issued is not
9lawfully entitled thereto, or has done any of the following:

10(1) Filed an application for the license using a false or fictitious
11name not registered with the proper authorities, or knowingly made
12a false statement or knowingly concealed a material fact, in the
13application for the license.

14(2) Made, or knowingly or negligently permitted, an illegal use
15of the special plates issued to the licensee.

16(3) Used a false or fictitious name, knowingly made a false
17statement, or knowingly concealed a material fact, in an application
18for the registration of a vehicle, or otherwise committed a fraud
19in the application.

20(4) Failed to deliver to a transferee lawfully entitled thereto a
21properly endorsed certificate of ownership.

22(5) Knowingly purchased, sold, or otherwise acquired or
23disposed of a stolen motor vehicle.

24(6) Failed to provide and maintain a clear physical division
25between the type of business licensed pursuant to this chapter and
26any other type of business conducted at the established place of
27business.

28(7) Willfully violated Section 3064 or 3065 or any rule or
29regulation adopted pursuant thereto.

30(8) Violated any provision of Division 3 (commencing with
31Section 4000) or any rule or regulation adopted pursuant thereto,
32or subdivision (a) of Section 38200.

33(9) Violated any provision of Division 4 (commencing with
34Section 10500) or any rule or regulation adopted pursuant thereto.

35(10) Violated any provision of Article 1 (commencing with
36Section 11700) of Chapter 4 of Division 5 or any rule or regulation
37adopted pursuant thereto.

38(11) Violated any provision of Part 5 (commencing with Section
3910701) of Division 2 of the Revenue and Taxation Code or any
40rule or regulation adopted pursuant thereto.

P16   1(12) Violated any provision of Chapter 3332b (commencing
2with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil
3Code or any rule or regulation adopted pursuant thereto.

4(13) Submitted a check, draft, or money order to the department
5for any obligation or fee due the state which was dishonored or
6refused payment upon presentation.

7(14) Has caused any person to suffer any loss or damage by
8reason of any fraud or deceit practiced on that person or fraudulent
9representations made to that person in the course of the licensed
10activity.

11For purposes of this paragraph, “fraud” includes any act or
12omission which is included within the definition of either “actual
13fraud” or “constructive fraud” as defined in Sections 1572 and
141573 of the Civil Code, and “deceit” has the same meaning as
15defined in Section 1710 of the Civil Code. In addition, “fraud”
16and “deceit” include, but are not limited to, a misrepresentation in
17any manner, whether intentionally false or due to gross negligence,
18of a material fact; a promise or representation not made honestly
19and in good faith; an intentional failure to disclose a material fact;
20and any act within Section 484 of the Penal Code.

21For purposes of this paragraph, “person” also includes a
22governmental entity.

23(15) Failed to meet the terms and conditions of an agreement
24entered into pursuant to Section 11707.

25(16) Violated Section 43151, 43152, or 43153 of, or subdivision
26(b) of Section 44072.10 of, the Health and Safety Code.

27(17) Failed to repay a claim paid by the Consumer Motor
28Vehicle Recovery Corporation as provided in subdivision (i) of
29Section 11703.

30(18) As a buy-here-pay-here dealer, violated any provision of
31Chapter 11 (commencing with Section 7500) of Divisions 3 of the
32Business and Professions Code or any rule or regulation adopted
33pursuant to those provisions.

34(b) Any of the causes specified in this chapter as a cause for
35refusal to issue a license to a transporter, manufacturer,
36manufacturer branch, remanufacturer, remanufacturer branch,
37distributor, distributor branch, or dealer applicant is cause to
38suspend or revoke a license issued to a transporter, manufacturer,
39manufacturer branch, remanufacturer, remanufacturer branch,
40distributor, distributor branch, or dealer.

P17   1(c) Except as provided in Section 11707, every hearing provided
2for in this section shall be conducted pursuant to Chapter 5
3(commencing with Section 11500) of Part 1 of Division 3 of Title
42 of the Government Code.

5

begin deleteSEC. 15.end delete
6begin insertSEC. 13.end insert  

No reimbursement is required by this act pursuant to
7Section 6 of Article XIII B of the California Constitution because
8the only costs that may be incurred by a local agency or school
9district will be incurred because this act creates a new crime or
10infraction, eliminates a crime or infraction, or changes the penalty
11for a crime or infraction, within the meaning of Section 17556 of
12the Government Code, or changes the definition of a crime within
13the meaning of Section 6 of Article XIII B of the California
14Constitution.

15

begin deleteSEC. 16.end delete
16begin insertSEC. 14.end insert  

This act is an urgency statute necessary for the
17immediate preservation of the public peace, health, or safety within
18the meaning of Article IV of the Constitution and shall go into
19immediate effect. The facts constituting the necessity are:

20In order to preserve public peace by prohibiting a person from
21interfering with the transport of a vehicle to a storage facility,
22auction, or dealer by a repossessor, it is necessary that this act take
23effect immediately.



O

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