BILL ANALYSIS
AB 515
Page 1
Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 515 (Hagman) - As Introduced: February 24, 2009
PROPOSED CONSENT
SUBJECT : COLLATERAL RECOVERY: TOW VEHICLES
KEY ISSUE : SHOULD VARIOUS SUBSTANTIVE AND CLARIFYING CHANGES BE
MADE TO SECTIONS OF THE COLLATERAL RECOVERY ACT THAT REGULATE
THE REPOSSESSION, IMPOUNDMENT, AND RELEASE FROM IMPOUNDMENT OF
VEHICLES, AND THAT SPECIFY LICENSING AND QUALIFICATION
REQUIREMENTS FOR LICENSED REPOSSESSORS?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This non-controversial bill, sponsored by the California
Association of Licensed Repossessors, seeks a number of
substantive and clarifying changes to sections of the Collateral
Recovery Act and Vehicle Code that regulate qualifications for
licensed repossessors and the repossession, impoundment, and
release from impoundment of vehicles, as provided. The bill is
identical to last year's SB 1469 that was summarily vetoed by
the Governor, but was not considered by this Committee prior to
being vetoed. There is no known opposition.
SUMMARY : Seeks various substantive and clarifying changes to
laws that regulate vehicle repossession, impoundment, and
release from impoundment, and that specify licensing and
qualification requirements for licensed repossessors.
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
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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
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 , the Collateral Recovery Act,
1)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
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the Department of Consumer Affairs (DCA). (Article 4 of
Chapter 11 of Division 3 of the Business and Professions Code,
beginning with Section 7503.)
2)Makes any person who violates these provisions guilty of a
crime punishable by fine and provides that any person who
violates, conspires with another to violate, or knowingly
engages a nonexempt licensed person to repossess collateral on
their behalf is guilty of a misdemeanor and punishable by a
fine of $5,000, imprisonment for not more than one year, or
both. (Business and Professions Code Section 7502.1.)
3)Requires every office licensed as a repossession agency to be
under the active charge of a qualified certificate holder, and
requires certificate holders to be at least 18 years of age
and have two years of lawful experience, as specified.
(Business and Professions Code Section 7504.)
4)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
legal owner or the legal owner's agent pay all towing and
storage fees related to the seizure of the vehicle. (Vehicle
Code Sections 14602.6, 14602.7, 14602.8, and 21100.4.)
5)Provides that a legal owner that obtains release of a vehicle
from impoundment may not relinquish the vehicle to the
registered owner until the registered owner or his agent
presents his valid driver's license to the legal owner, who
must make every reasonable effort to ensure that the license
presented is valid. (Vehicle Code Sections 14602.6, 14602.7,
and 14602.8.)
6)Provides that vehicles towed by a repossessor's tow vehicle
are exempt from multisafety chain requirements so long as the
vehicle is not towed more than one mile from the point of
repossession and is secured by one safety chain. (Vehicle
Code Section 29004.)
7)Requires that towing vehicles be equipped with and employ a
taillamp, stoplamp, turn signal lamps, and a portable
electrical extension cord, as specified, for use on the rear
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of a towed vehicle. (Vehicle Code Section 24605.)
COMMENTS : This bill, sponsored by the California Association of
Licensed Repossessors, seeks a number of substantive and
clarifying changes to sections of the Collateral Recovery Act
and Vehicle Code that regulate licensed repossessors. These
proposed changes are primarily in the areas that concern the
repossession, impoundment, and release from impoundment of
vehicles, and certain licensing and qualification requirements
in the repossession industry.
According to the author, this bill 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."
Improper Release of Impounded Vehicles to Unlicensed Drivers :
According to the sponsor, in some cases the legal or registered
owner of a vehicle impounded because the driver was unlicensed
may try to change the name of the registered owner to obtain
early release of the vehicle to the unlicensed driver. The
author states that this provision "closes a loophole that allows
the improper release of impounded vehicle back to unlicensed
drivers." The bill addresses this problem by changing multiple
sections, each governing the release of certain impounded
vehicles, to prohibit the legal owner, registered owner, or
person in possession of the vehicle from changing or attempting
to change the name of the legal or registered owner on DMV
records until the vehicle is released from impound.
Consumer Practices : The bill substantively changes consumer
payment practices in the industry by requiring impound agencies
and towing companies in all situations to accept a bank credit
card when presented by the registered or legal owner to redeem
their vehicle and obtain release from impoundment. One estimate
is that 80% of impound agencies and towing companies already
accept payment by credit card for this purpose (i.e. paying
towing and storage fees.) This bill would expand the policy to
all situations.
Unlicensed Repossession Activity : Although significant fines
and imprisonment exist to deter unlicensed repossession
activity, according to the sponsor, more incentive for
enforcement is needed. Thus, this bill would permit, in
addition to current penalties, the removal and impound of a tow
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vehicle involved in illegal, unlicensed activity, which
presumably will punish the offender and remove his means of
carrying out unlicensed repossession of vehicles.
Prior Related Legislation : SB 1469 (Calderon) of 2008: This
bill is identical to the version of last year's SB 1469, carried
by a different author, that was summarily vetoed by the
Governor. Prior to being vetoed, SB 1469 was not heard by this
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Licensed Repossessors (sponsor)
California Financial Services Association (CFSA)
Opposition
None on file
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334