Amended in Assembly April 22, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 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 amended, 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 begin delete authorize a person performing the duties of a registrant to alternatively display a end delete begin insert exempt from that prohibition a person who has in his or her possession a end insert hardcopy printout or electronic copy of the bureau’s approval from the bureau’s Internet Web begin delete site or an electronic screenshot display of this information directly from the bureau’s Internet Web end delete site. The bill would also begin delete 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 end delete begin insert specify for the above-described purposes that an electronic copy of the bureau’s approval may include an end insert electronic screenshot display of begin delete this information directly from the bureau’s Internet Web site. end delete begin insert that information. end insert

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:

SECTION 1.  

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

7500.1.  

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

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

(b) “Assignment” means any written authorization by the legal
owner, lienholder, lessor or lessee, or the agent of any of them, to
skip trace, locate, or repossess, including, but not limited to,
collateral registered under the Vehicle Code that is subject to a
security agreement that contains a repossession clause.
“Assignment” also means any written authorization by an employer
to recover any collateral entrusted to an employee or former
employee in possession of the collateral. A photocopy of an
assignment, facsimile copy of an assignment, or electronic format
of an assignment shall have the same force and effect as an original
written assignment.

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

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

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

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

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

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

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

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

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

(l) “Electronic format” includes, but is not limited to, a text
message, begin delete e-mail, end delete begin insert email, end insert or Internet posting.

(m) “Health hazard” means any personal effects that if retained
would produce an unsanitary or unhealthful condition, or which
might damage other personal effects.

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 2.  

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

7506.9.  

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

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

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

(d) No person shall perform the duties of a registrant for a
licensee unless the person has in his or her possession a valid
repossessor registration begin delete card end delete begin insert card, a hardcopy printout or
electronic copy of the bureau’s approval from the bureau’s Internet
Web site, which may include an electronic screenshot of that
information, end insert or evidence of a valid temporary registration or
registration renewal as described in subdivision (b) or (e) of this
section or subdivision begin delete (c) end delete begin insert (f) end insert of Section 7506.10. Every person,
while engaged in any activity for which licensure is required, shall
display his or her valid pocket card, begin delete 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 end delete as provided by
regulation.

(e) A person may work as a registrant pending receipt of the
registration card if he or she has been approved by the bureau and
carries on his or her person a hardcopy printout or electronic copy
of the bureau’s approval from the bureau’s Internet Web site, begin delete or
an electronic display of this information directly from the bureau’s
Internet Web Site, end delete begin insert which may include an electronic screenshot of
that information, end insert and a valid picture identification.

SEC. 3.  

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

7507.5.  

No charge shall be made for services incurred in
connection with the recovery, transportation, and storage of
collateral except under terms agreed to by the legal owner at the
time of the repossession authorization or specifically agreed upon
at a subsequent time. Repair work shall not be performed and shall
not be charged to the legal owner.

SEC. 4.  

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

7509.  

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

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

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

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

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

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

SEC. 5.  

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

7509.1.  

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

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

SEC. 6.  

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

7509.2.  

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

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

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

SEC. 7.  

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

7509.3.  

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

SEC. 8.  

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