BILL ANALYSIS
AB 515
Page 1
Date of Hearing: April 14, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 515 (Hagman) - As Introduced: February 24, 2009
SUBJECT : Collateral recovery: tow vehicles.
SUMMARY : Authorizes the impoundment of tow vehicles used to
violate the Collateral Recovery Act (Act), requires law
enforcement agencies that impound vehicles to be accessible to
vehicle owners, as specified, requires specified vehicle impound
facilities to accept credit cards, and makes various other
revisions to the Act. Specifically, this bill :
1)Subjects any registered tow vehicle used to violate the Act to
removal and impoundment, as specified.
2)Provides that lawful experience for a qualification
certificate does not include any employment performing work
other than skip tracing, debt collection, or actual collateral
recovery.
3)Clarifies that a licensee may have more than one qualified
certificate holder in an office.
4)Requires a licensee's seizure notice to include a disclosure
that electrical failure or any damage to, as a result of, or
caused by, certain aftermarket parts and accessories on a
vehicle are not the responsibility of the licensee, except as
specified.
5)Requires law enforcement agencies that impound vehicles to
remain open, without the necessity of making an appointment,
to issue a release to the registered owner or legal owner of a
vehicle whenever the agency is open to serve the public.
6)Makes various changes to payment acceptance terms, as
specified.
7)Makes it a misdemeanor for a legal owner of an impounded
vehicle to release the vehicle to the registered owner of the
vehicle in certain circumstances.
8)Prohibits the legal owner, registered owner, or person in
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possession of the vehicle from changing or attempting to
change the name of the legal owner or the registered owner
until the vehicle is released from the impound.
9)Imposes additional requirements regarding the release of
impounded vehicles, as specified
10) Requires a legal owner to indemnify and hold harmless
a storage facility from any claims arising out of the release
of the vehicle to the legal owner.
11) Deletes specified provisions requiring a tow vehicle
to use an extension cord to display rear stoplamps and turn
signals.
12) Exempts a repossessor's towing vehicle from the
multi-safety chain requirements if the repossessor is towing a
vehicle no more than one mile on a public highway and the
vehicle is secured by one safety chain.
EXISTING LAW :
1)The Act provides for the licensure and regulation of
repossession agencies by the Bureau of Security and
Investigative Services (BSIS) under the supervision and
control of the Director of the Department of Consumer Affairs
(DCA). Any person who violates the provisions of the Act is
guilty of a crime punishable by fine and imprisonment.
2)Requires an applicant for a qualification certificate to
satisfy certain requirements, including possessing two years
of lawful experience, as specified.
3)Requires every repossession agency office to be under the
active charge of a qualified certificate holder.
4)Requires licensees to serve a debtor with a specified notice
of seizure after the recovery of collateral by the licensee.
5)Provides that a peace officer or, in certain other cases, a
magistrate, may cause the removal and seizure of a vehicle, as
specified. Specifies that a vehicle removed and seized may be
released to the legal owner or the legal owner's agent prior
to the end of 30 days impoundment if certain conditions are
met, including, but not limited to, the requirement that the
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legal owner or the legal owner's agent pay all towing and
storage fees related to the seizure of the vehicle.
6)Imposes various taillamp, stoplamp, turn signal, and
multi-safety chain requirements applicable to towing vehicles.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "AB 515
is necessary to clarify some ambiguous parts of current law, as
well as to make some changes that will result in better trained
repossessors and safer repossession activity. AB 515 also makes
several changes to current law related to licensed repossessors,
in terms of licensing, liability, safety requirements, and
punishment for unlicensed activity. AB 515 updates to the
Business and Professions and Vehicle Code dealing with the
repossession of property:
Cracks down on unlicensed activity in the repossession
profession
Conforms statute to the current policy of the BSIS in regards
to qualified managers
Includes electrical damage under the liability exemption
except in the cases of repossessor negligence
Expands the number of hours an owner has to obtain an impound
police release request
Closes a loophole that allows the improper release of
impounded vehicles back to unlicensed drivers
Clarifies the one mile safety chain rule to exclude private
driveways and parking lots in the distance calculation
Permits the use of wireless taillamps, updating the code to
take advantage of new technology available to the industry."
Background . Legal owners (i.e. lenders) contract with
repossession agencies to locate and recover their property when
a borrower fails to make payments. Those agencies must register
with the BSIS. All managers and employees must register with
the BSIS, and are subject to a background check at that time.
The Act strictly regulates the activities of repossession
agencies and their employees.
Among other things, the Act requires a debtor to receive a
notice as soon as possible after their vehicle is towed and
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requires that notice to include a disclaimer that the
repossession agency is not liable for mechanical or tire failure
as long as the failure is not the result of the negligence of
the repossession agency. This bill would revise that notice by
broadly limiting repossessor liability for electrical failure or
damage related to specified illegal aftermarket parts and
accessories. Other revisions made by this bill include allowing
repossession of personal property used to violate the Act,
modifying the experience required for qualified managers,
requiring impound agencies to accept credit cards from legal
owners, requiring law enforcement agencies to issue impound
releases whenever they are open for business with the public,
and revising the lighting and safety chain requirements that
apply when towing a repossessed vehicle.
Support . The Calfornia Association of Licensed Repossessors
writes in support, "Although current law provides for a $5,000
fine for unlicensed activity, and/or imprisonment, this does not
provide enough incentive for enforcement. Accordingly, th[is]
bill . . . permit[s], in addition to a fine and/or imprisonment,
the removal of a tow vehicle involved in illegal, unlicensed
activity.
"Some small police agencies only grant releases by appointment
during limited, inconvenient hours. This delays the release of
vehicles and increases storage costs for consumers. This bill
requires law enforcement agencies to be open to process release
requests without appointments anytime they are already open to
serve the general public.
"On occasion, if a vehicle is impounded because the driver was
unlicensed, the legal or registered owner may try to change the
name of the registered owner to obtain early release of the
vehicle so it can be improperly returned to the unlicensed
driver. This bill provides that the legal owner, registered
owner, or person in possession of the vehicle shall not change
or attempt to change the name of the legal owner or the
registered owner . . . until the vehicle is released from
impound."
Previous legislation . This bill is identical to SB 1469
(Calderon) of 2008 which the Governor vetoed. The Governor
vetoed a substantial number of bills that year with the same
message that, due to the delay in passing the 2008-2009 State
Budget, he would only sign bills that were "the highest priority
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for California." SB 1469 was vetoed for this reason.
Double referred . This bill is double-referred to the Assembly
Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Licensed Repossessors (sponsor)
California Financial Services Association
Opposition
None on file.
Analysis Prepared by : Whitney Clark / B. & P. / (916)
319-3301