BILL NUMBER: AB 1859 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 18, 2016
AMENDED IN SENATE AUGUST 2, 2016
AMENDED IN SENATE JUNE 21, 2016
AMENDED IN SENATE JUNE 14, 2016
AMENDED IN ASSEMBLY APRIL 18, 2016
AMENDED IN ASSEMBLY MARCH 18, 2016
INTRODUCED BY Assembly Member Gallagher
FEBRUARY 10, 2016
An act to amend Sections 7500.1, 7504, 7506.7,
7507.3, 7507.6, 7507.9, 7507.13, and 7508.2
and 7507.13 of the Business and Professions Code, and
to add Section 22651.03 to the Vehicle Code, relating to
collateral recovery.
LEGISLATIVE COUNSEL'S DIGEST
AB 1859, as amended, Gallagher. Collateral recovery:
release of vehicle. recovery.
(1) 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. That act defines the term "repossession"
as meaning the locating or recovering of collateral by means of an
assignment. That act defines the term "assignment" as any written
authorization by the legal owner, lienholder, lessor, lessee,
registered owner, or the agent of any of them, to repossess any
collateral or any written authorization by an employer to recover any
collateral entrusted to an employee or former employee in possession
of the collateral. That act requires a licensee to remove
personal effects from the collateral and requires a licensee to make
a complete and accurate inventory of the personal effects.
That act provides for the issuance of qualification certificates,
required for the management of the places of business of licensed
repossession agencies, to applicants who meet certain requirements,
including, among others, 2 years of lawful experience in
recovering collateral as a registrant pursuant to the act or
as a salaried employee of a financial institution or vehicle dealer,
as specified. and provides that lawful experience
does not include employment performing work other than skip tracing,
debt collection, or actual collateral recovery. That act makes
a violation of any of its provisions a crime.
This bill, among other things, bill
would exclude experience as an employee of a financial
institution from experience that may be applied toward that
requirement for qualification certification. The bill would define
the terms "repossession" or "repossess" to mean the locating or
physically recovering of collateral by means of a repossession order.
remove debt collection from the employment included
under lawful experience. The bill would change the
definition of assignment to also include any written authorization to
skip trace or locate, would define the term "repossession
order" as having the same meaning as "assignment" and would
change references to "assignment" in the act to "repossession order."
The bill would also define "locate" or "locating" as searching
visually, by a licensee, for collateral without the use of an
electronic device, including, but not limited to, a camera, scanner,
or automated license plate reader. The bill would exempt an employee
of a licensee who is operating an electronic device for the purpose
of locating collateral or documenting the location of collateral from
registration, as specified. The bill, if the collateral is locked,
would require a licensee to inventory the personal effects within 15
days, if possible. The bill would authorize a debtor, with the
consent of the licensee, to waive the preparation and presentation of
an inventory of the personal effects not covered by a security
interest, within the time period for specified notices or prior to
the completion of the inventory, whichever is earlier, if the debtor
signs a specified statement. The bill would require a licensee to
give the debtor the phone number of the licensed repossession agency
if the debtor claims any personal effects or personal property are
missing. The bill would authorize a licensee to store personal
effects inside the collateral, as specified. The bill would also
prohibit a licensee from conspiring or agreeing to release personal
effects or other personal property not covered by a security
agreement to anyone other than the debtor. By placing new
prohibitions on a licensee, this bill would expand an existing crime
and would, therefore, "assignment," and would make
conforming changes. The bill would delete the definition for the term
"repossession." By expanding the scope of a crime, this bill would
impose a state-mandated local program.
Under the Collateral Recovery Act, licensed repossession agencies
are not liable for specified acts or omissions of a legal owner,
debtor, lienholder, lessor, lessee, registered owner, or agent of any
of them, and are entitled to indemnity from the legal owner, debtor,
lienholder, lessor, lessee, or registered owner for losses incurred
as a result of those acts or omissions. Under the act, those persons
or their agents are not liable for acts or omissions by a licensed
repossession agency or its agent in carrying out a repossession order
and are entitled to indemnity from the licensed repossession agency
for losses incurred as a result of those acts or omissions, as
specified.
This bill would extend the above-described provisions applicable
to a legal owner, debtor, lienholder, lessor, lessee, or registered
owner to a debt collector.
(2) Existing law specifies how and to whom a vehicle that has been
removed by a peace officer may be released, including to the legal
owner of the vehicle and the legal owner's agent.
This bill would, notwithstanding specified sections of law,
instead prescribe specified procedures and requirements for releasing
a vehicle to a licensed repossessor, as defined, including that the
licensed repossessor present a copy of the assignment and pay all
towing and storage fees related to the seizure of the vehicle.
Existing law requires that a vehicle removed or seized by a peace
officer pursuant to specified provisions of law be impounded for 30
days.
This bill would authorize a law enforcement agency to require a
licensed repossessor to provide a signed acknowledgment that the
repossessed vehicle impounded under those provisions will not be
released to the registered owner prior to the expiration of the
30-day period.
Existing law exempts from registration a vehicle repossessed
pursuant to a security agreement solely for the purpose of
transporting the vehicle from the point of repossession to the
storage facilities of the repossessor or other specified places if
the repossessor transports the vehicle with appropriate documents and
makes them available to a law enforcement officer upon request.
Existing law exempts a legal owner of a vehicle from the payment of
administrative costs assessed by a city, county, or city and county
for releasing a properly impounded vehicle, unless the legal owner
who redeems the vehicle requests a poststorage hearing. Existing law
prohibits a city, county, or city and county from requiring the legal
owner or the legal owner's agent to request a poststorage hearing as
a requirement for release of the vehicle.
This bill would specify that the above exemptions apply when a
vehicle is released to a licensed repossessor.
(3) 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 with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
(2) 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" or "repossession order" means any written
authorization by the legal owner, lienholder, lessor, lessee, or
registered owner, or the agent of any of them, to skip trace, locate,
or repossess any collateral, including, but not limited to,
collateral registered under the Vehicle Code that is subject to a
security agreement that contains a repossession clause. "Assignment"
or "repossession order" 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 or repossession order, facsimile copy of an assignment or
repossession order, or electronic format of an assignment or
repossession order shall have the same force and effect as an
original written assignment or repossession order.
(b)
(c) "Bureau" means the Bureau of Security and
Investigative Services.
(c)
(d) "Chief" means the Chief of the Bureau of Security
and Investigative Services.
(d)
(e) "Collateral" means any specific vehicle, trailer,
boat, recreational vehicle, motor home, appliance, or other property
that is subject to a security agreement.
(e)
(f) "Combustibles" means any substances or articles
that are capable of undergoing combustion or catching fire, or that
are flammable, if retained.
(f)
(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.
(g)
(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.
(h)
(i) "Debtor" means any person obligated under a
security agreement.
(i)
(j) "Department" means the Department of Consumer
Affairs.
(j)
(k) "Director" means the Director of Consumer Affairs.
(k)
(l) "Electronic format" includes, but is not limited
to, a text message, email, or Internet posting.
(l)
(m) "Health hazard" means any personal effects that if
retained would produce an unsanitary or unhealthful condition, or
which might damage other personal effects.
(m)
(n) "Legal owner" means a person holding a security
interest in any collateral that where the
collateral is subject to a security agreement, a lien against
any collateral, an assignment or a repossession order, or
an interest in any collateral that is subject to a lease agreement.
(n)
(o) "Licensee" means an individual, partnership,
limited liability company, or corporation licensed under this chapter
as a repossession agency.
(o) "Locate" or "locating" means searching visually, by a
licensee, for collateral without the use of an electronic device,
including, but not limited to, a camera, scanner, or automated
license plate reader.
(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) "Registered owner" means the individual listed in the records
of the Department of Motor Vehicles, or on a
conditional sales contract, or on an assignment or a
repossession order, as the registered owner.
(v) "Registrant" means a person registered under this chapter.
(w) "Repossession" or "repossess" means the locating or physically
recovering of collateral by means of a repossession order.
(x)
"Repossession order" means any written authorization by the legal
owner, lienholder, lessor, lessee, registered owner, or the agent of
any of them, to repossess any collateral, including, but not limited
to, collateral registered under the Vehicle Code that is subject to
a security agreement that contains a repossession clause.
"Repossession order" 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 a
repossession order, facsimile copy of a repossession order, or
electronic format of a repossession order shall have the same force
and effect as an original written repossession order.
(y)
(w) "Secured area" means and includes any fenced and
locked area.
(z)
(x) "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.
(aa)
(y) "Services" means any duty or labor to be rendered
by one person for another.
(ab)
(z) "Violent act" means any act that results in bodily
harm or injury to any party involved.
(ac)
(aa) The amendments made to this section by Chapter 418
of the Statutes of 2006 shall not be deemed to exempt any person
from the provisions of this chapter.
SEC. 2. Section 7504 of the Business and Professions Code is
amended to read:
7504. (a) Except as otherwise provided in this chapter, an
applicant for a qualification certificate shall comply with all of
the following:
(1) Be at least 18 years of age.
(2) Have been, for at least two years of lawful experience, during
the five years preceding the date on which his or her application is
filed, a registrant or have had two years of lawful experience in
recovering collateral within this state. Lawful experience means
experience in recovering collateral as a registrant pursuant to this
chapter or as a salaried employee of a financial institution or
vehicle dealer. Lawful experience does not include any
employment performing work other than skip tracing or
actual collateral recovery.
Two years' experience shall consist of not less than 4,000 hours
of actual compensated work performed by the applicant preceding the
filing of an application.
An applicant shall certify that he or she has completed the
claimed hours of qualifying experience and the exact details as to
the character and nature thereof by written certifications from the
employer, licensee, financial institution, or vehicle
dealer, subject to independent verification by the director as he or
she may determine. In the event of the inability of an applicant to
supply the written certifications from the employer, licensee,
financial institution, or vehicle dealer, in whole or in part,
applicants may offer other written certifications from other persons
substantiating their experience for consideration by the director.
All certifications shall include a statement that representations
made are true, correct, and contain no material omissions of fact to
the best knowledge and belief of the applicant or the person
submitting the certification. An applicant or person submitting the
certification who declares as true any material matter pursuant to
this paragraph that he or she knows to be false is guilty of a
misdemeanor.
(3) Complete and forward to the bureau a qualified certificate
holder application which shall be on a form prescribed by the
director and signed by the applicant. An applicant who declares as
true any material matter pursuant to this paragraph that he or she
knows to be false is guilty of a misdemeanor. The application shall
be accompanied by two recent photographs of the applicant, of a type
prescribed by the director, and two classifiable sets of his or her
fingerprints. The residence address, residence telephone number, and
driver's license number of each qualified certificate holder or
applicant for a qualification certificate, if requested, shall be
confidential pursuant to the Information Practices Act of 1977
(Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of
Division 3 of the Civil Code) and shall not be released to the
public.
(4) Pass the required examination.
(5) Pay the required application and examination fees to the
bureau.
(b) Upon the issuance of the initial qualification certificate or
renewal qualification certificate, the bureau shall issue to the
certificate holder a suitable pocket identification card which
includes a photograph of the certificate holder. The photograph shall
be of a size prescribed by the bureau. The card shall contain the
name of the licensee with whom the certificate holder is employed.
(c) The application form shall contain a statement informing the
applicant that a false or dishonest answer to a question may be
grounds for denial or subsequent suspension or revocation of a
qualification certificate.
SEC. 3. Section 7506.7 of the Business and
Professions Code is amended to read:
7506.7. (a) Employees of a licensee who are engaged exclusively
in stenographic, typing, filing, clerical, or other office activities
are not required to register under this article.
(b) Employees of a licensee who are operating electronic devices,
including, but not limited to, cameras, scanners, and automated
license plate readers, for the purpose of locating collateral or
documenting the location of collateral are not required to register
under this article.
SEC. 4. SEC. 3. Section 7507.3 of
the Business and Professions Code is amended to read:
7507.3. A repossession agency shall be required to keep and
maintain adequate records of all transactions, including, but not
limited to, assignment or repossession order forms;
vehicle report of repossession required by Section 28 of the Vehicle
Code; vehicle condition reports, including odometer readings, if
available; personal effects inventory; notice of seizure; and records
of all transactions pertaining to the sale of collateral that has
been repossessed, including, but not limited to, bids solicited and
received, cash received, deposits made to the trust account,
remittances to the seller, and allocation of any moneys not so
remitted to appropriate ledger accounts. Records, including bank
statements of the trust account, shall be retained for a period of
not less than four years and shall be available for examination by
the bureau upon demand. In addition, collateral and personal effects
storage areas shall be made accessible for inspection by the bureau
upon demand. A An assignment or
repossession order form may be an original, a photocopy, a facsimile
copy, or a copy stored in an electronic format.
SEC. 5. Section 7507.6 of the Business and
Professions Code is amended to read:
7507.6. (a) Within seven days after a violent act has occurred
involving a licensee, or any officer, partner, qualified certificate
holder, registrant, or employee of a licensee, while acting within
the course and scope of his or her employment or contract, that
results in a police report or bodily harm or bodily injury, the
licensee or the licensee's qualified certificate holder or
registrant, shall mail or deliver to the chief a notice concerning
the incident upon a form provided by the bureau.
(b) Within seven days after the occurrence of a violent act or a
threatened violent act involving a licensee, or any officer, partner,
qualified certificate holder, registrant, or employee of a licensee,
while acting within the course and scope of his or her employment or
contract, that results in a police report or bodily harm or bodily
injury, the licensee or the licensee's qualified certificate holder
or registrant shall send by certified mail, return receipt requested,
a notice containing information about the incident to the person or
individual who made the repossession order. If the assignor is not
the legal owner, the assignor shall notify the legal owner of the
contents of the notice.
(c) A licensee, qualified certificate holder, or registrant may
send the notice set forth in subdivision (b) for a violent act or
threatened violent act even if a police report is not made or no
bodily harm or bodily injury occurs. Any notice of a threatened
violent act provided pursuant to subdivision (b) may only be used to
notify a subsequent assignee and not for any collateral purpose.
Nothing in this subdivision or subdivision (b) shall be construed to
provide immunity against any claim for defamation.
SEC. 6. Section 7507.9 of the Business and
Professions Code is amended to read:
7507.9. Except as otherwise provided in this section, personal
effects shall be removed from the collateral, including any personal
effect that is mounted but detachable from the collateral by a
release mechanism. A complete and accurate inventory of the personal
effects shall be made, and the personal effects shall be labeled and
stored by the licensee for a minimum of 60 days in a secure manner,
except those personal effects removed by or in the presence of the
debtor or the party in possession of the collateral at the time of
the repossession. If the licensee or the licensee's agent cannot
determine whether the property attached to the collateral is a
personal effect or a part of the collateral, then that fact shall be
noted on the inventory and the licensee or agent shall not be
obligated to remove the item from the collateral, unless the item can
be removed without the use of tools, in which case it shall be
removed and inventoried. The licensee or the licensee's agent shall
notify the debtor that if the debtor takes the position that an item
is a personal effect, then the debtor shall contact the legal owner
to resolve the issue. If the collateral is locked, the licensee shall
inventory the personal effects within 15 days, if possible.
(a) The date and time the inventory is made shall be indicated.
The permanent records of the licensee shall indicate the name of the
employee or registrant who performed the inventory.
(b) The following items of personal effects are items determined
to present a danger or health hazard when recovered by the licensee
and shall be disposed of in the following manner:
(1) Deadly weapons and dangerous drugs shall be turned over to any
law enforcement agency for retention. These items shall be entered
on the inventory and a notation shall be made as to the date, time,
and place the deadly weapon or dangerous drug was turned over to the
law enforcement agency, and a receipt from the law enforcement agency
shall be maintained in the records of the repossession agency.
(2) Combustibles shall be inventoried and noted as "disposed of,
dangerous combustible," and the item shall be disposed of in a
reasonable and safe manner.
(3) Food and other health hazard items shall be inventoried and
noted as "disposed of, health hazard," and disposed of in a
reasonable and safe manner.
(c) Personal effects may be disposed of after being held for at
least 60 days. The inventory, and adequate information as to how,
when, and to whom the personal effects were disposed of, shall be
filed in the permanent records of the licensee and retained for four
years.
(d) The inventory shall include the name, address, business hours,
and telephone number of the repossession agency to contact for
recovering the personal effects and an itemization of all personal
effects removal and storage charges that will be made by the
repossession agency. The inventory shall also include the following
statement: "Please be advised that the property listed on this
inventory will be disposed of by the repossession agency after being
held for 60 days from the date of this notice IF UNCLAIMED."
(e) The inventory shall be provided to a debtor not later than 48
hours after the recovery of the collateral, except that if:
(1) The 48-hour period encompasses a Saturday, Sunday, or postal
holiday, the inventory shall be provided no later than 72 hours after
the recovery of the collateral.
(2) The 48-hour period encompasses a Saturday or Sunday and a
postal holiday, the inventory shall be provided no later than 96
hours after the recovery of the collateral.
(3) Inventory resulting from repossession of a yacht, motor home,
or travel trailer is such that it shall take at least four hours to
inventory, then the inventory shall be provided no later than 96
hours after the recovery of the collateral. When the 96-hour period
encompasses a Saturday, Sunday, or postal holiday, the inventory
shall be provided no later than 120 hours after the recovery of the
collateral.
(4) The licensee is unable to open a locked compartment that is
part of the collateral, the available inventory shall be provided no
later than 96 hours after the recovery of the collateral. When the
96-hour period encompasses a Saturday, Sunday, or postal holiday, the
inventory shall be provided no later than 120 hours after the
recovery of the collateral.
(f) Environmental, Olympic, special interest, or other license
plates issued pursuant to Article 8 (commencing with Section 5000),
Article 8.4 (commencing with Section 5060), or Article 8.5
(commencing with Section 5100) of Chapter 1 of Division 3 of the
Vehicle Code that remain the personal effects of the debtor shall be
removed from the collateral and inventoried pursuant to this section.
If the plates are not claimed by the debtor within 60 days, they
shall either (1) be effectively destroyed and the licensee shall,
within 30 days thereafter, notify the Department of Motor Vehicles of
their effective destruction on a form promulgated by the chief that
has been approved as to form by the Director of the Department of
Motor Vehicles; or (2) be retained by the licensee indefinitely to be
returned to the debtor upon request, in which case the licensee
shall not charge more than 60 days' storage on the plates.
(g) The notice may be given by regular mail addressed to the last
known address of the debtor or by personal service at the option of
the repossession agency.
(h) (1) With the consent of the licensee, the debtor may waive the
preparation and presentation of an inventory if the debtor redeems
the personal effects or other personal property not covered by a
security interest within the time period for the notices required by
this section or prior to completion of the inventory, whichever is
earlier, and signs a statement that reads only as follows:
"I, insert debtor's name here], have received all personal
effects that were in the vehicle at the time of the repossession."
(2) No other signature or document shall be required to waive the
preparation and presentation of an inventory. If the debtor claims
there are personal effects or personal property missing, the licensee
shall provide the debtor with the phone number of the licensed
repossession agency. A licensee shall not require the person
retrieving the personal effects to sign any other documents or
waivers prior to the return of the personal effects. No other
documents or signatures shall be required for the person to receive
the personal effects. Any fees paid for clerical, handling,
administering, inventorying, or storage of personal effects are
confidential and shall only be disclosed by the licensed repossession
agency as ordered by a court of competent jurisdiction.
(i) (1) If personal effects or other personal property not covered
by a security agreement are to be released to someone other than the
debtor, the repossession agency shall receive written authorization
to do so from the debtor.
(2) Subject to paragraph (1), a licensee shall not release or
conspire or agree to release personal effects or other personal
property not covered by a security agreement to anyone other than the
debtor.
(j) A licensee shall not sell personal effects or other personal
property not covered by a security agreement and remit money from the
sale to a third party, including, but not limited to, any lending
institution.
(k) The inventory or waiver of inventory, as provided in
subdivision (h), shall be a confidential document. A licensee shall
only disclose the contents of the inventory under the following
circumstances:
(1) In response to the order of a court having jurisdiction to
issue the order.
(2) In compliance with a lawful subpoena issued by a court of
competent jurisdiction.
(3) When the debtor has consented in writing to the release and
the written consent is signed and dated by the debtor subsequent to
the repossession and states the entity or entities to whom the
contents of the inventory may be disclosed.
(4) To the debtor.
(l) A licensee who has been notified that collateral will be
retrieved may store personal effects or personal property inside the
collateral until the collateral is no longer in the possession of the
licensee. If a licensee stores personal effects pursuant to this
subdivision, the notice and inventory provisions of this section
shall apply, the licensee shall be liable for the security of the
personal effects, and the collateral shall not be released by the
licensee until all personal effects or personal property have been
removed.
SEC. 7. SEC. 4. Section 7507.13 of
the Business and Professions Code is amended to read:
7507.13. (a) A licensed repossession agency is not liable for the
act or omission of a legal owner, debt collector, debtor,
lienholder, lessor, lessee, or registered owner, or an
agent of any of them, in making a an
assignment or repossession order to it or for accepting
a an assignment or repossession order
from any legal owner, debt collector, debtor, lienholder, lessor,
lessee, or registered owner, or an agent of any of them,
and is entitled to indemnity from the legal owner, debt collector,
debtor, lienholder, lessor, lessee, or registered owner for any loss,
damage, cost, or expense, including court costs and attorney's fees,
that it may reasonably incur as a result thereof. Nothing in this
subdivision limits the liability of any person for his or her
tortious conduct.
(b) The legal owner, debt collector, debtor, lienholder, lessor,
lessee, or registered owner, or the agent of any of them,
is not liable for any act or omission by a licensed repossession
agency, or its agent, in carrying out a an
assignment or repossession order and is entitled to indemnity
from the repossession agency for any loss, damage, cost, or expense,
including court costs and attorney's fees, that the legal owner, debt
collector, debtor, lienholder, lessor, lessee, or
registered owner, or the agent of any of them, may reasonably incur
as a result thereof. Nothing in this subdivision limits the liability
of any person for his or her tortious conduct.
(c) The legal owner, debtor, lienholder, lessor, lessee, or
registered owner, or the agent of any of them, is not guilty of
a violation of Section 7502.1 or 7502.2 if, at the time of the
assignment or repossession order, the party making the
assignment or repossession order has in its possession a copy
of the repossessor's current, unexpired repossession agency license,
and a copy of the current, unexpired repossession agency's qualified
manager's certificate, and does not have actual knowledge of any
order of suspension or revocation of the license or certificate.
(d) Neither a licensed repossession agency nor a legal owner,
debtor, lienholder, lessor, lessee, or registered owner,
or an agent of any of them may, by any means, direct or indirect,
express or implied,
instruct or attempt to coerce the other to violate any law,
regulation, or rule regarding the recovery of any collateral,
including, but not limited to, the provisions of this chapter or
Section 9609 of the Commercial Code.
(e) A licensed repossession agency, at least annually, on or
before January 31 of each year, shall provide a legal owner from
which the agency accepts a an assignment or
repossession order with a copy of this section, Sections
7500.2, 7507.4, 7507.115, 7507.12, and 7507.125 of this code, and
Section 28 of the Vehicle Code.
SEC. 8. Section 7508.2 of the Business and
Professions Code is amended to read:
7508.2. The director may assess administrative fines for any of
the following prohibited acts:
(a) Recovering collateral or making any money demand in lieu
thereof, including, but not limited to, collateral registered under
the Vehicle Code, that has been sold under a security agreement
before a signed or telegraphic authorization has been received from
the legal owner, debtor, lienholder, lessor, or repossession agency
acting on behalf of the legal owner, debtor, lienholder, or lessor of
the collateral. A telephonic repossession order is acceptable if the
legal owner, debtor, lienholder, lessor, or repossession agency
acting on behalf of the legal owner, debtor, lienholder, or lessor is
known to the licensee and a written authorization from the legal
owner, debtor, lienholder, lessor, or repossession agency acting on
behalf of the legal owner, debtor, lienholder, or lessor is received
by the licensee within 10 working days or a request by the licensee
for a written authorization from the legal owner, debtor, lienholder,
lessor, or repossession agency acting on behalf of the legal owner,
debtor, lienholder, or lessor is made in writing within 10 working
days. Referrals of repossession orders from one licensee to another
licensee are acceptable. The referral of a repossession order shall
be made under the same terms and conditions as in the original
repossession order. The fine shall be twenty-five dollars ($25) for
each of the first five violations and one hundred dollars ($100) for
each violation thereafter, per audit.
(b) Using collateral or personal effects, which have been
recovered, for the personal benefit of a licensee, or officer,
partner, manager, registrant, or employee of a licensee. The fine
shall be twenty-five dollars ($25) for the first violation and one
hundred dollars ($100) for each violation thereafter. This
subdivision does not apply to personal effects disposed of pursuant
to subdivision (c) of Section 7507.9. Nothing in this subdivision
prohibits the using or taking of personal property connected,
adjoined, or affixed to the collateral through an unbroken sequence
if that use or taking is reasonably necessary to effectuate the
recovery in a safe manner or to protect the collateral or personal
effects.
(c) Selling collateral recovered under this chapter, or making a
demand for payment in lieu of repossession. The fine shall be two
hundred fifty dollars ($250) for the first violation and one thousand
dollars ($1,000) for each subsequent violation.
(d) Unlawfully entering any private building or secured area
without the consent of the owner, or of the person in legal
possession thereof, at the time of repossession. The fine shall be
five hundred dollars ($500) for each violation.
(e) Committing unlawful assault or battery on another person. The
fine shall be five hundred dollars ($500) for each violation.
(f) Falsification or alteration of an inventory. The fine shall be
twenty-five dollars ($25) for each violation.
(g) Soliciting from the legal owner the recovery of specific
collateral registered under the Vehicle Code or under the motor
vehicle licensing laws of other states after the collateral has been
seen or located on a public street or on public or private property
without divulging the location of the vehicle. The fine shall be one
hundred dollars ($100) for the first violation and two hundred fifty
dollars ($250) for each violation thereafter.
SEC. 9. Section 22651.03 is added to the
Vehicle Code, immediately following Section 22651, to read:
22651.03. (a) Notwithstanding Sections 14602.6 and 22651, this
section shall apply when collateral is released to a licensed
repossessor. For purposes of this section, "licensed repossessor"
means a licensed repossessor, licensed repossession agency, or its
officers or employees pursuant to Chapter 11 (commencing with Section
7500) of Division 3 of the Business and Professions Code.
(b) Pursuant to Section 4022, a vehicle obtained by a licensed
repossessor as a release of collateral is exempt from registration
for purposes of the repossessor removing the vehicle to his or her
storage facility or the facility of the legal owner. A law
enforcement agency, impounding authority, tow yard, storage facility,
or any other person in possession of the collateral shall release
the vehicle without requiring current registration and pursuant to
this section. The law enforcement agency shall be open to issue a
release to the legal owner or a licensed repossessor whenever the
agency is open to serve the public for nonemergency business.
(c) The law enforcement agency and the impounding agency,
including any storage facility acting on behalf of the law
enforcement agency or impounding agency, shall comply with this
section and shall not be liable to the registered owner for the
improper release of the vehicle to the legal owner or a licensed
repossessor provided the release complies with this section. A law
enforcement agency shall not refuse to issue a release to a legal
owner or a licensed repossessor on the grounds that it previously
issued a release.
(d) A vehicle removed and seized for any reason shall be released
to the legal owner of the vehicle or to a licensed repossessor if all
of the following conditions are met:
(1) The legal owner is a motor vehicle dealer, bank, credit union,
acceptance corporation, or other licensed financial institution
legally operating in this state or is another person, not the
registered owner, holding a security interest in the vehicle.
(2) (A) The legal owner or the licensed repossessor pays all
towing and storage fees related to the seizure of the vehicle. Any
person having possession of the vehicle shall not collect from the
legal owner of the type specified in paragraph (1) or a licensed
repossessor any administrative charges imposed pursuant to Section
22850.5 unless the legal owner voluntarily requested a poststorage
hearing.
(B) A person operating or in charge of a storage facility where
vehicles are stored pursuant to this section shall accept a valid
bank credit card or cash for payment of towing, storage, and related
fees by a legal owner or a licensed repossessor claiming the vehicle.
A credit card shall be in the name of the person presenting the
card. "Credit card" means "credit card" as defined in subdivision (a)
of Section 1747.02 of the Civil Code, except, for the purposes of
this section, credit card does not include a credit card issued by a
retail seller.
(C) A person operating or in charge of a storage facility
described in subparagraph (B) who violates subparagraph (B) shall be
civilly liable to the owner of the vehicle or to the person who
tendered the fees for four times the amount of the towing, storage,
and related fees, but not to exceed five hundred dollars ($500).
(D) A person operating or in charge of a storage facility
described in subparagraph (B) shall have sufficient funds on the
premises of the primary storage facility during normal business hours
to accommodate, and make change in, a reasonable monetary
transaction.
(E) Credit charges for towing and storage services shall comply
with Section 1748.1 of the Civil Code. Law enforcement agencies may
include the costs of providing for payment by credit when making
agreements with towing companies on rates.
(3) The legal owner or licensed repossessor presents a copy of the
repossession order, as defined in Section 7500.1 of the Business and
Professions Code; a release from the one responsible governmental
agency to give to the tow yard, only if required by the agency; a
government-issued photographic identification card; and any one of
the following, as determined by the legal owner or the licensed
repossessor: a certificate of repossession for the vehicle, a
security agreement for the vehicle, or title, whether paper or
electronic, showing proof of legal ownership for the vehicle. Any
documents presented may be originals, photocopies, or facsimile
copies, or may be transmitted electronically. The law enforcement
agency, impounding agency, or any other governmental agency, or any
person acting on behalf of those agencies, shall not require any
documents to be notarized. The law enforcement agency, impounding
agency, or any person acting on behalf of those agencies may require
the licensed repossessor to produce a photocopy or facsimile copy of
its repossession agency license or registration issued pursuant to
Chapter 11 (commencing with Section 7500) of Division 3 of the
Business and Professions Code.
No administrative costs authorized under subdivision (a) of
Section 22850.5 shall be charged to the legal owner, of the type
specified in paragraph (1), who redeems the vehicle unless the legal
owner voluntarily requests a poststorage hearing. No city, county,
city and county, or state agency shall require a legal owner or a
licensed repossessor to request a poststorage hearing as a
requirement for release of the vehicle to the legal owner or the
licensed repossessor. The law enforcement agency, impounding agency,
or other governmental agency, or any person acting on behalf of those
agencies, shall not require any documents other than those specified
in this paragraph. The law enforcement agency, impounding agency, or
other governmental agency, or any person acting on behalf of those
agencies, shall not require any documents to be notarized. The legal
owner or the licensed repossessor shall be given a copy of any
documents he or she is required to sign, except for a vehicle
evidentiary hold logbook. The law enforcement agency, impounding
agency, or any person acting on behalf of those agencies, or any
person in possession of the vehicle may photocopy and retain the
copies of any documents presented by the legal owner or licensed
repossessor.
(4) A failure by a storage facility to comply with any applicable
conditions set forth in this subdivision shall not affect the right
of the legal owner or a licensed repossessor to retrieve the vehicle,
provided all conditions required of the legal owner or licensed
repossessor under this subdivision are satisfied.
(e) A legal owner or a licensed repossessor that obtains release
of a vehicle pursuant to subdivision (d) shall not release the
vehicle to the registered owner of the vehicle, the person who was
listed as the registered owner when the vehicle was impounded, or any
agents of the registered owner, unless the registered owner is a
rental car agency.
(f) The legal owner of collateral shall, by operation of law and
without requiring further action, indemnify and hold harmless a law
enforcement agency, city, county, city and county, the state, a tow
yard, storage facility, or an impounding yard from a claim arising
out of the release of the collateral to a licensed repossessor and
from any damage to the collateral after its release, including
reasonable attorney's fees and costs associated with defending a
claim, if the collateral was released in compliance with this
section.
(g) A law enforcement agency may require a signed acknowledgment
from a licensed repossessor stating that the repossessed vehicle
impounded pursuant to Section 14602.6 for 30 days will not, under any
circumstances, be released by the licensed repossessor to the
registered owner prior to the expiration of the 30-day period without
the law enforcement agency's approval.
SEC. 10. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution for certain costs that may be incurred by a local agency
or school district because, in that regard, 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.
However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.
SEC. 5. 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.