California Legislature—2015–16 Regular Session

Assembly BillNo. 281


Introduced by Assembly Member Gallagher

February 11, 2015


An act to amend Sections 7500.1, 7506.9, and 7507.5 of, and to add Sections 7509, 7509.1, 7509.2, and 7509.3 to, the Business and Professions Code, relating to collateral recovery.

LEGISLATIVE COUNSEL’S DIGEST

AB 281, as introduced, Gallagher. Collateral recovery.

Existing law, the Collateral Recovery Act, provides for the licensure and regulation of repossession agencies by the Bureau of Security and Investigative Services under the supervision and control of the Director of Consumer Affairs. The chief of the bureau serves under the direction and supervision of the director. Existing law makes a violation of the act a crime. Existing law also provides for the denial of a license for specified violations of the act, and authorizes the director to assess administrative fines and penalties.

This bill would establish a Collateral Recovery Disciplinary Review Committee, to consist of 5 members to be appointed by, and to serve at the pleasure of, the Governor, for purposes of reviewing the request of a licensee to contest the assessment of an administrative fine or to appeal a denial of a license, except as specified. The bill would set forth the duties of the Collateral Recovery Disciplinary Review Committee in that regard, and would authorize the members of the committee to be paid per diem and reimbursed for actual travel expenses.

Existing law prohibits a person from performing the duties of a registrant for a licensed repossession agency unless the person has in his or her possession a valid repossessor registration card or evidence of a valid temporary registration or registration renewal. Existing law authorizes a person to perform the duties of a registrant for a licensee pending receipt of a registration card if the person has been approved by the bureau and carries on his or her person a hardcopy printout of the bureau’s approval from the bureau’s Internet Web site.

This bill would authorize a person performing the duties of a registrant to alternatively display a hardcopy printout or electronic copy of the bureau’s approval from the bureau’s Internet Web site or an electronic screenshot display of this information directly from the bureau’s Internet Web site. The bill would also authorize a person performing the duties of a registrant for a licensee pending receipt of a registration card if the person has been approved by the bureau and carries on his or her person an electronic screenshot display of this information directly from the bureau’s Internet Web site.

The Collateral Recovery Act authorizes licensed repossessors to perform repair work upon vehicles and charge owners if expressly authorized to do so.

This bill would prohibit licensed repossessors from performing, or charging for, repair work.

This bill would also make technical changes.

Because a violation of the bill’s provisions under the Collateral Recovery Act would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

P2    1

SECTION 1.  

Section 7500.1 of the Business and Professions
2Code
is amended to read:

3

7500.1.  

The following terms as used in this chapter have the
4meaning expressed in this section:

5(a) “Advertisement” means any written or printed
6communication, including a directory listing, except a free
P3    1telephone directory listing that does not allow space for a license
2number.

3(b) “Assignment” meansbegin delete aend deletebegin insert anyend insert written authorization by the legal
4owner, lienholder, lessor or lessee, or the agent of any of them, to
5skip trace, locate, orbegin delete repossess or to collect money payment in lieu
6of repossession of any collateral,end delete
begin insert repossess,end insert including, but not
7limited to, collateral registered under the Vehicle Code that is
8subject to a security agreement that contains a repossession clause.
9“Assignment” also meansbegin delete aend deletebegin insert anyend insert written authorization by an
10employer to recover any collateral entrusted to an employee or
11former employee in possession of the collateral. A photocopy of
12an assignment, facsimile copy of an assignment, or electronic
13format of an assignment shall have the same force and effect as
14an original written assignment.

15(c) “Bureau” means the Bureau of Security and Investigative
16Services.

17(d) “Chief” means the Chief of the Bureau of Security and
18Investigative Services.

19(e) “Collateral” means any specific vehicle, trailer, boat,
20recreational vehicle, motor home, appliance, or other property that
21is subject to a security agreement.

22(f) “Combustibles” means any substance or article that is capable
23of undergoing combustion or catching fire, or that is flammable,
24if retained.

25(g) “Dangerous drugs” means any controlled substances as
26defined in Chapter 2 (commencing with Section 11053) of Division
2710 of the Health and Safety Code.

28(h) “Deadly weapon” means and includes any instrument or
29weapon of the kind commonly known as a blackjack, slungshot,
30billy, sandclub, sandbag, metal knuckles, dirk, dagger, pistol, or
31revolver, or any other firearm, any knife having a blade longer
32than five inches, any razor with an unguarded blade, and any metal
33pipe or bar used or intended to be used as a club.

34(i) “Debtor” means any person obligated under a security
35agreement.

36(j) “Department” means the Department of Consumer Affairs.

37(k) “Director” means the Director of Consumer Affairs.

38(l) “Electronic format” includes, but is not limited to, a text
39message, e-mail, or Internet posting.

P4    1(m) “Health hazard” means any personal effectsbegin delete whichend deletebegin insert thatend insert if
2retained would produce an unsanitary or unhealthful condition, or
3which might damage other personal effects.

4(n) “Legal owner” means a person holding a security interest
5in any collateral that is subject to a security agreement, a lien
6against any collateral, or an interest in any collateral that is subject
7to a lease agreement.

8(o) “Licensee” means an individual, partnership, limited liability
9company, or corporation licensed under this chapter as a
10repossession agency.

11(p) “Multiple licensee” means a repossession agency holding
12more than one repossession license under this chapter, with one
13fictitious trade style and ownership, conducting repossession
14business from additional licensed locations other than the location
15shown on the original license.

16(q) “Person” includes any individual, partnership, limited
17liability company, or corporation.

18(r) “Personal effects” means any property that is not the property
19of the legal owner.

20(s) “Private building” means and includes any dwelling,
21outbuilding, or other enclosed structure.

22(t) “Qualified certificate holder” or “qualified manager” is a
23person who possesses a valid qualification certificate in accordance
24with the provisions of Article 5 (commencing with Section 7504)
25and is in active control or management of, and who is a director
26of, the licensee’s place of business.

27(u) “Registrant” means a person registered under this chapter.

28(v) “Secured area” means and includes any fenced and locked
29area.

30(w) “Security agreement” means an obligation, pledge,
31mortgage, chattel mortgage, lease agreement, deposit, or lien, given
32by a debtor as security for payment or performance of his or her
33debt, by furnishing the creditor with a recourse to be used in case
34of failure in the principal obligation. “Security agreement” also
35includes a bailment where an employer-employee relationship
36exists or existed between the bailor and the bailee.

37(x) “Services” means any duty or labor to be rendered by one
38person for another.

39(y) “Violent act” means any act that results in bodily harm or
40injury to any party involved.

P5    1(z) The amendments made to this section during the 2005-06
2Regular Session shall not be deemed to exempt any person from
3the provisions of this chapter.

4

SEC. 2.  

Section 7506.9 of the Business and Professions Code
5 is amended to read:

6

7506.9.  

(a) Upon the issuance of the initial registration,
7reregistration, or renewal, the chief shall issue to the registrant a
8suitable pocket identification card. At the request of the registrant,
9the identification card may include a photograph of the registrant.
10The photograph shall be of a size prescribed by the bureau. The
11card shall contain the name of the licensee with whom the registrant
12is registered. The applicant may request to be issued an enhanced
13pocket card that shall be composed of durable material and may
14incorporate technologically advanced security features. The bureau
15may charge a fee sufficient to reimburse the department for costs
16for furnishing the enhanced pocket card. The fee charged may not
17exceed the actual cost for system development, maintenance, and
18processing necessary to provide the service, and may not exceed
19six dollars ($6). If the applicant does not request an enhanced card,
20the department shall issue a standard card at no cost to the
21applicant.

22(b) Until the registration certificate is issued or denied, a person
23may be assigned to work with a temporary registration on a secure
24form prescribed by the chief, and issued by the qualified certificate
25holder, for a period not to exceed 120 days from the date the
26employment or contract commenced, provided the person signs a
27declaration under penalty of perjury that he or she has not been
28convicted of a felony or committed any other act constituting
29grounds for denial of a registration pursuant to Section 7506.8
30(unless he or she declares that the conviction of a felony or the
31commission of a specified act or acts occurred prior to the issuance
32of a registration by the chief and the conduct was not the cause of
33any subsequent suspension or termination of a registration), and
34that he or she has read and understands the provisions of this
35chapter.

36(c) The chief shall issue an additional temporary registration
37for not less than 60 days nor more than 120 days, if the chief
38determines that the investigation of the applicant will take longer
39to complete than the initial temporary registration time period.

P6    1(d) No person shall perform the duties of a registrant for a
2licensee unless the person has in his or her possession a valid
3repossessor registration card or evidence of a valid temporary
4registration or registration renewal as described in subdivision (b)
5or (e) of this section or subdivision (c) of Section 7506.10. Every
6person, while engaged in any activity for which licensure is
7required, shall display his or her valid pocket cardbegin insert, a hardcopy
8printout or electronic copy of the bureau’s approval from the
9bureau’s Internet Web site, or an electronic screenshot display of
10this information directly from the bureau’s Internet Web siteend insert
as
11provided by regulation.

12(e) A person may work as a registrant pending receipt of the
13registration card if he or she has been approved by the bureau and
14carries on his or her person a hardcopy printout or electronic copy
15of the bureau’s approval from the bureau’s Internet Web sitebegin insert, or
16an electronic display of this information directly from the bureau’s
17Internet Web Site,end insert
and a valid picture identification.

18

SEC. 3.  

Section 7507.5 of the Business and Professions Code
19 is amended to read:

20

7507.5.  

No charge shall be made for services incurred in
21connection with the recovery, transportation, and storage of
22collateral except under terms agreed to by the legal owner at the
23time of the repossession authorization or specifically agreed upon
24at a subsequent time. Repair workbegin delete may not be charged to the legal
25owner unless expressly authorized by him or herend delete
begin insert shall not be
26performed and shall not be charged to the legal ownerend insert
.

27

SEC. 4.  

Section 7509 is added to the Business and Professions
28Code
, to read:

29

7509.  

(a) A person licensed with the bureau under this chapter
30may request a review by the Collateral Recovery Disciplinary
31Review Committee, as established in Section 7509.1, to contest
32the assessment of an administrative fine or to appeal a denial of a
33license, unless the denial is ordered by the director in accordance
34with Chapter 5 (commencing with Section 11500) of Part 1 of
35Division 3 of Title 2 of the Government Code.

36(b) A request for a review shall be by written notice to the
37disciplinary review committee within 30 days of the issuance of
38the citation and assessment or denial.

39(c) Following a review by the disciplinary review committee,
40the appellant shall be notified within 30 days, in writing, by regular
P7    1mail, of the committee’s decision. At the discretion of the
2disciplinary review committee, an appellant may be notified
3immediately of the committee’s decision once it is made.

4(d) If the appellant disagrees with the decision made by the
5disciplinary review committee, he or she may request a hearing in
6accordance with Chapter 5 (commencing with Section 11500) of
7Part 1 of Division 3 of Title 2 of the Government Code. A request
8for a hearing following a decision by the disciplinary review
9committee shall be by written notice to the bureau within 30 days
10following notice of the committee’s decision.

11(e) If the appellant does not request a hearing within 30 days,
12the disciplinary review committee’s decision shall become final.

13(f) Notwithstanding subdivisions (a) to (e), inclusive, where a
14 hearing is held under this chapter to determine whether an
15application for licensure should be granted, the proceedings shall
16be conducted in accordance with Chapter 5 (commencing with
17Section 11500) of Part 1 of Division 3 of Title 2 of the Government
18Code, and the director shall have all of the powers granted therein.

19

SEC. 5.  

Section 7509.1 is added to the Business and Professions
20Code
, to read:

21

7509.1.  

(a) The Governor shall appoint a Collateral Recovery
22Disciplinary Review Committee, and may remove any member of
23the committee for misconduct, incompetency, or neglect of duty.
24The committee shall consist of five members. Of the five members,
25three members shall be actively engaged in the business of owning
26licensed repossession agencies and two members shall be public
27members. None of the public members shall be licensees, certificate
28holders, or registrants, or engaged in any business or profession
29in which any part of the fees, compensation, or revenue thereof is
30derived from any licensee.

31(b) The disciplinary review committee shall meet as frequently
32as may be required. The members shall be paid per diem pursuant
33to Section 103 and shall be reimbursed for actual travel expenses.
34The members shall serve for a term of four years.

35

SEC. 6.  

Section 7509.2 is added to the Business and Professions
36Code
, to read:

37

7509.2.  

The Collateral Recovery Disciplinary Review
38Committee shall perform the following functions:

P8    1(a) Affirm, rescind, or modify all appealed decisions concerning
2administrative fines assessed by the director or bureau against
3repossession agencies or their employees.

4(b) Affirm, rescind, or modify all appealed decisions concerning
5denial of licenses issued by the director or bureau, except denials
6or suspensions ordered by the director in accordance with Chapter
75 (commencing with Section 11500) of Part 1 of Division 3 of
8Title 2 of the Government Code.

9

SEC. 7.  

Section 7509.3 is added to the Business and Professions
10Code
, to read:

11

7509.3.  

The bureau shall provide the Collateral Recovery
12Disciplinary Review Committee all evidence used by the bureau
13in reaching its decision prior to any review or appeal of that
14decision by the committee.

15

SEC. 8.  

No reimbursement is required by this act pursuant to
16Section 6 of Article XIII B of the California Constitution because
17the only costs that may be incurred by a local agency or school
18district will be incurred because this act creates a new crime or
19infraction, eliminates a crime or infraction, or changes the penalty
20for a crime or infraction, within the meaning of Section 17556 of
21the Government Code, or changes the definition of a crime within
22the meaning of Section 6 of Article XIII B of the California
23Constitution.



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