BILL ANALYSIS Ó
AB 281
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
281 (Gallagher)
As Amended September 4, 2015
Majority vote
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|ASSEMBLY: | 78-0 | (May 14, |SENATE: | 40-0 | (September 10, |
| | |2015) | | |2015) |
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Original Committee Reference: B. & P.
SUMMARY: Establishes, on or after July 1, 2017, a Collateral
Recovery Disciplinary Review Committee (DRC) to review a
licensee's contestation of an administrative fine or an
applicant's license denial, and makes a number of other changes
to the Collateral Recovery Act (Act) related to licensed
repossession agencies (LRAs).
The Senate amendments:
1)Delay the appointment of the DRC until July 1, 2017.
2)Revise the definition of "assignment," and define the terms
"registered owner" and "repossession."
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3)Prohibit a licensed repossessor from performing or charging
the legal owner for repair work, cleaning, or detailing of any
collateral recovered.
4)Provide that if a licensee is unable to open a locked
compartment that is a part of the collateral, the available
inventory shall be provided no later than 96 hours after the
recovery of the collateral, as specified.
5)Make other changes regarding personal effects and inventory,
and prohibit a licensee from selling these items and remitting
proceeds to a third party, including any lending institution.
6)Require an LRA to provide an annual notice of specified
inventory and reporting requirements of a repossessor agency
to a legal owner from which the agency accepts an assignment.
7)Authorize an LRA to provide to an insurance company, the name,
driver's license number, and date of birth of a licensee,
registrant, qualified certificate holder, qualified manager,
employee, or any independent contractor the LRA employs for
the purpose of verifying information for the issuance or
renewal of an insurance policy.
8)Specify that a licensee may also request a review by the DRC
to appeal a revocation or suspension of their license.
9)Clarify that a licensee, certificate holder, or registrant may
request a hearing in accordance with the Administrative
Procedure Act if he or she disagrees with the decision made by
the DRC.
10)Specify that the DRC shall meet every 60 days, or more or
less frequently as may be required, and may grant a
probationary license, certificate, registration, or permit, as
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specified.
11)No longer require an LRA to provide written notice to the
relevant city policy or sheriff's department where the taking
of possession occurred.
12)Require the legal owner of collateral to indemnify and hold
harmless the state, a law enforcement agency, city, county,
tow yard, storage facility, or an impounding yard from any
damage to the collateral after it is released, as specified,
if the collateral was legally released.
13)Add double joining language to address chaptering out issues
with SB 541 (Hill) of the current legislative session.
14)Make other minor, technical, confirming, and clarifying
changes to the Collateral Recovery Act.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
1)Estimated Bureau of Security Investigative Services (BSIS)
costs of approximately $14,000 annually to hold four DRC
hearings. (Private Security Services Fund)
2)BSIS staff costs of approximately $33,000 annually for 0.5
Personnel Year of administrative workload associated with DRC
activities. (Private Security Services Fund)
3)Minor and absorbable costs to make necessary IT changes to the
BreEZe system. (Private Security Services Fund)
4)Likely minor costs, if any, to local agencies, including law
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enforcement entities, to provide a specified notice to owners
of towed or stored vehicles. While this bill is keyed as a
mandate, this provision is not likely to impose significant
costs on local agencies because towing companies and impound
lots are not generally owned or operated by local agencies.
Staff assumes that any costs to provide the specified notice
could be offset by increased towing and storage charges, to
the extent local agencies own or operate towing or storage
facilities.
COMMENTS:
Purpose. This bill is sponsored by the California Association
of Licensed Repossessors. According to the author, "[This bill]
clarifies the job description of repossessors, promotes
flexibility, and establishes a [DRC] - a proven mechanism to
save time and taxpayer dollars."
DRCs. The Private Security Services Act establishes two DRCs,
one in northern California and one in southern California, and
the Alarm Company Operator Act establishes one DRC. The DRCs
provide their respective applicants and licensees an alternate
path to consider appeals of the BSIS's decisions to deny,
suspend or revoke licenses, or assess administrative fines. All
DRCs are comprised of five members appointed by the Governor,
three of whom are professional members. DRC meetings are
scheduled depending on the number of appeals.
The DRC Process. The Private Security Services Act and the
Alarm Company Operator Act have different processes for their
respective DRCs. For Private Security DRCs, applicants and
licensees have the option of filing an appeal with the DRC or
through the administrative hearing process. If the applicant or
licensee requests the appeal to be heard first by the DRC, the
applicant or licensee may still appeal a DRC decision through
the administrative process. For the Alarm Company Operator DRC,
applicants and licensees are required to file their appeal with
a DRC first, and are then provided the ability to appeal a DRC
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decision through the administrative process.
When applicants and licensees file their appeals to a DRC, BSIS
staff schedules the appeal review for an upcoming meeting and
mail the respondent information about the meeting and what to
expect. Approximately two weeks before a scheduled DRC meeting,
BSIS staff provides each DRC member with a case file for each
appeal to be heard during the meeting. During the hearing, the
applicant or licensee is afforded the opportunity to present his
or her case. He or she may be represented by an attorney and
may bring witnesses as character references or observers of the
incident resulting in the BSIS's action. DRC members ask
questions to clarify issues related to the case to obtain the
information needed to make a decision on the appeal. The
average hearing time per person is 15 minutes to 30 minutes.
The BSIS staff mail the applicant or licensee the DRC's decision
on their appeal within 30 days.
DRC Statistics. In March of this year, the Assembly Business
and Professions Committee and the Senate Business, Professions
and Economic Development Committee held a joint sunset oversight
hearing to review several of the boards and bureaus under the
DCA, including the BSIS. In the BSIS's sunset report, it noted,
"To maximize the efficiency of its disciplinary activities, the
[BSIS] ensures that those licensees eligible to have their
appeals heard by a Bureau [DRC] are properly notified of this
option in a timely manner. Each year, approximately 900 [BSIS]
licensees request an appeal of their denials, suspensions, or
imposition of fines through DRC[s]."
The BSIS notes that the number of pending appeal cases changes
depending on the fluctuating quantity of incoming appeal
requests from applicants and licensees. It also states that it
has been able to address a high number of pending appeals by
scheduling two-day hearings and meeting monthly to accommodate
the number of appeals. Once an appeal is received by the BSIS,
an appellant is generally scheduled for hearing within 30 days
to 60 days. According to the BSIS, this approach has resulted in
no ongoing backlogs. Over the last three fiscal years:
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1)The Private Security DRC had an annual average of 20 meetings
and an average caseload of 35 appeals per meeting. The Alarm
Company Operator DRC held an annual average of 3 meetings and
had an average caseload of 9 appeals per meeting.
2)The Private Security DRC overturned an average of 203
decisions and upheld an average of 345 decisions. The Alarm
Company DRC overturned an average of five decisions and upheld
an average seven decisions. The Private Security DRC received
an annual average of 12 citation appeals. The Alarm Company
DRC received one citation appeal (Fiscal Year 2013-14).
3)There was an annual average of 11 requests for formal
administrative appeals for citations and fines for all BSIS
professions.
According to BSIS, during Fiscal Year 2013-14, there were
approximately 309 actively licensed LRAs, 891 actively licensed
repossessors and 330 actively licensed repossessor qualified
managers operating in California. By way of comparison, for
licensees under the Act, over the last three fiscal years, there
were 38 citations and 1 appeal, for an annual average of 13
citations and less than one appeal each year. There were also
58 license denials and 17 appeals, for an annual average of
19-20 denials and five to six appeals each year.
According to BSIS, the average time for appeal of a license
denial under the Act is 570 days. Based on the past three
fiscal years, the overall average time for cases to be
considered through the administrative hearing process is 290
days to 300 days. In addition, according to BSIS's 2014 sunset
report, there are much fewer licensees under the Act (under
2,000) while there were nearly 25,000 alarm company licensees
and nearly 300,000 private security licensees.
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This bill would establish a Collateral Recovery DRC, to consist
of five members appointed by the Governor, for purposes of
reviewing requests of licensees to contest the assessment of an
administrative fine or for applicants to appeal the denial,
revocation, or suspension of a license. According to the
author, disciplinary actions currently take a long period of
time, sometimes a year a half to reach their final outcome. A
DRC would result in determinations on a much more expedited
basis, and the licensee may accept the outcome of the DRC and
not pursue an additional appeal. In addition, the full
adjudication costs are paid out of the licensee fund, which will
be saved if the licensee accepts the decision of the DRC.
Analysis Prepared by:
Eunie Linden / B. & P. / (916) 319-3301 FN:
0002388