Amended in Assembly March 16, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 183

Introduced by Assembly Member Waldron

January 26, 2015

An act to begin delete amend Section 96.15 of the Revenue and Taxation Code, end delete begin insert add Sections 4150, 4155, 4160, and 4165 to the Financial Code, end insert relating to begin delete local government finance. end delete begin insert financial institutions. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 183, as amended, Waldron. begin delete Local government finance. end delete begin insert Financial institutions: preauthorized electronic fund transfers. end insert

begin insert

Existing federal and state laws regulate certain aspects of electronic fund transfers, including, but not limited to, preauthorized electronic fund transfers from or to a consumer’s checking account. Existing law requires the Department of Business Oversight to regulate various financial institutions operating within the state, including, but not limited to, banks and credit unions.

end insert begin insert

This bill would require a financial institution subject to oversight by the Department of Business Oversight to ensure it complies with a specific federal regulation with regard to electronic fund transfers. This bill would require a financial institution to provide a specified written notice to a consumer, who approved a preauthorized electronic fund transfer to a merchant from the consumer’s account, and would further require a merchant located in the state that accepts preauthorized electronic fund transfers to post the same notice on its Internet Web site, if any. This bill would require a financial institution, upon written notification from a consumer who terminated a preauthorized electronic fund transfer with a merchant, within 7 business days, to take action to ensure that the merchant no longer has the ability to withdraw funds from the consumer’s account, based upon the consumer’s instructions. This bill would prohibit a merchant from requiring payment for goods or services in the form of a preauthorized electronic fund transfer from a consumer’s account at a financial institution, and would require a merchant to notify a financial institution, and cease making demands on a consumer’s account, when the consumer’s debt, payable by a preauthorized electronic fund transfer, has been satisfied.

end insert begin delete

Existing law generally requires the county auditor, in each fiscal year, to allocate property tax revenues to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined. Existing property tax law also requires a county auditor to make certain property tax revenue allocations to “qualifying cities,” as defined, in accordance with a specified Tax Equity Allocation formula and to make corresponding reductions in the amount of property tax revenue that is allocated to the county. Existing law also requires the county auditor, in the case in which a “qualifying city” becomes the successor agency to a special district as a result of a merger with that district as described in a specified statute, to additionally allocate to that successor qualifying city that amount of property tax revenue that otherwise would have been allocated to that special district pursuant to general allocation requirements.

end delete begin delete

This bill would make a nonsubstantive change to the provision pertaining to property tax revenue allocations to a qualifying city that merges with a special district.

end delete

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

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 4150 is added to the end insert begin insert Financial Code end insert begin insert , to
read: end insert

begin insert

begin insert 4150. end insert   

A financial institution subject to oversight by the
Department of Business Oversight shall ensure it complies with
Regulation E of the Federal Reserve Board (12 C.F.R. Pt. 205)
with regard to electronic fund transfers, including, but not limited
to, preauthorized electronic fund transfers from or to a consumer’s
checking account.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 4155 is added to the end insert begin insert Financial Code end insert begin insert , to read: end insert

begin insert

begin insert 4155. end insert   

(a) A financial institution shall provide the following
written notice to a consumer who approved a preauthorized
electronic fund transfer to a merchant from the consumer’s
account:

 

begin insert (1) end insert	begin insert If you want to stop the merchant’s ability to debit your account for future transactions, you should do all of the following: end insert
begin insert   end insert	begin insert (A) end insert	begin insert Contact the merchant directly and revoke your authorization to charge your account. end insert
begin insert   end insert	begin insert (B) end insert	begin insert Keep a copy of your notice revoking authorization to charge or obtain a cancellation number. end insert
begin insert   end insert	begin insert (C) end insert	begin insert Notify your financial institution that the merchant no longer has authority to debit your account. It may be best to provide the notification in writing. end insert
begin insert (2) end insert	begin insert If you revoked authorization and the merchant continues to charge the account, you can dispute the transactions with your financial institution. In the event of a dispute, written proof that you had revoked the merchant’s authorization will prove beneficial. end insert
begin insert (3) end insert	begin insert If you authorized your financial institution to make the transfer to the merchant on your behalf, you need to revoke your authorization to make the transfer with your financial institution. Your financial institution may require you to inform the merchant of the revocation of authority in advance of the financial institution taking action. end insert

 

(b) A merchant located in the state that accepts a preauthorized
electronic fund transfer from a consumer shall post the notice in
subdivision (a) on its Internet Web site, if any.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 4160 is added to the end insert begin insert Financial Code end insert begin insert , to read: end insert

begin insert

begin insert 4160. end insert   

(a) Upon written notification from a consumer that he
or she terminated a preauthorized electronic fund transfer from
his or her account to a merchant, a financial institution shall,
within seven business days, take action to ensure that the merchant
no longer has the ability to withdraw funds from the account, based
upon the consumer’s instructions.

(b) Termination of the merchant’s ability to access a consumer’s
account shall come without penalty to the consumer.

(c) It is the intent of the Legislature that this section ensure that
consumers have control over their own accounts and funds that
cannot be subordinated by a third party.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 4165 is added to the end insert begin insert Financial Code end insert begin insert , to read: end insert

begin insert

begin insert 4165. end insert   

(a) A merchant located in the state shall not require
payment for goods or services in the form of a preauthorized
electronic fund transfer from a consumer’s account at a financial
institution.

(b) A merchant located in the state shall notify a financial
institution, and shall cease to make demands on a consumer’s
account, when the consumer’s debt, payable by a preauthorized
electronic fund transfer, has been satisfied.

end insert

begin delete

SECTION 1.  

Section 96.15 of the Revenue and Taxation Code
is amended to read:

96.15.  

(a) Notwithstanding any other provision of this chapter,
in the event a qualifying city as defined in subdivision (d) of
Section 98 or subdivision (f) of Section 98.02 becomes the
successor agency to a special district as a result of a merger
described in Section 57087.3 of the Government Code, the auditor
shall allocate to that qualifying city, in addition to any other amount
of ad valorem property tax revenue required to be allocated to that
city pursuant to this chapter, the amount of ad valorem property
tax revenue that otherwise would be allocated to that district
pursuant to this article.

(b) It is the intent of the Legislature in enacting this section to
confirm and clarify a county auditor’s duty and authority,
established pursuant to subdivision (d) of Section 57087.3 of the
Government Code, to allocate to a qualifying city the ad valorem
property tax revenue of a subsidiary district that has been merged
with the city.

end delete