BILL ANALYSIS
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THIRD READING
Bill No: AB 515
Author: Hagman (R)
Amended: 8/17/09 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 6/9/09
AYES: Corbett, Harman, Florez, Leno, Walters
SENATE APPROPRIATIONS COMMITTEE : 11-0, 7/13/09
AYES: Kehoe, Cox, Corbett, Denham, Leno, Price, Runner,
Walters, Wolk, Wyland, Yee
NO VOTE RECORDED: Hancock, Oropeza
ASSEMBLY FLOOR : 73-0, 5/14/09 (Consent) - See last page
for vote
SUBJECT : Collateral recovery
SOURCE : California Association of Licensed Repossessors
DIGEST : This bill makes numerous revisions to the
Collateral Recovery Act and Vehicle code Sections relating
to the impound of vehicles, including: (1) limiting a
repossession agency's liability for damages to a vehicle as
a result of electrical failure, or specified illegal
aftermarket parts; (2) allowing impound of any tow vehicle
used to violate the Act; (3) narrowing the definition of
lawful experience for qualified managers of repossession
agencies; (4) clarifying lighting requirements for towed
vehicles, and modifying the requirement for multiple safety
CONTINUED
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chains; (5) requiring law enforcement agencies to be open,
as specified, to issue impound releases without the
necessity of making an appointment; (6) requiring impound
agencies to accept a valid bank credit card or cash, as
specified; and (7) prohibiting a legal or registered owner
from changing the name of the registered owner until a
vehicle is released from impound.
ANALYSIS :
Existing law, the Collateral Recovery Act (Act), provides
for the licensing and regulation of repossession agencies
by the Department of Consumer Affairs (DCA). (Business
and Professions Code Section 7500 et seq.) Existing law
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.
This bill provides that any tow vehicle subject to
registration under the Vehicle Code that is used to violate
any provision of the Act is subject to removal and impound.
Existing law provides that it is unlawful to operate any
vehicle, as specified, which has been modified so that any
portion, other than the wheels, has less clearance from the
surface of a level roadway than the clearance between the
roadway and the lowermost portion of any rim in contact
with the roadway. (Vehicle Code Section 24008.)
Existing law requires a repossessor to serve a debtor with
a notice of seizure as soon as possible after the recovery
of the collateral (vehicle) and not later than 48 hours,
except as specified. That notice must include a disclosure
that a mechanical or tire failure shall not be the
responsibility of the repossession agency unless the
failure is due to negligence of the agency. (Business &
Professions Code Section 7507.10.)
This bill requires the disclosure to include electrical
failure, or the loss of, or any damage to, or as a result
of, or caused by, any aftermarket parts and accessories not
in compliance with Vehicle Code Section 24008, provided
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that the failure, damage, or loss is not due to the
negligence of the repossession agency.
Existing law provides that whenever a tow truck or vehicle
is towing a vehicle and stop lamps and turn signal lamps
cannot be lighted and displayed on the rear of the towed
vehicle, the operator of the truck or vehicle shall use an
extension cord to display lamps mounted on the towed
vehicle, as specified. (Vehicle Code Section 24605.)
This bill removes the reference to an extension cord, thus
allowing the use of cordless stop lamps and turn signal
lamps.
Existing law provides that vehicles towed by a
repossessor's tow vehicle are exempt from multi-safety
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.)
This bill instead applies that provision as long as the
vehicle is not towed more than one mile on a public highway
and is secured by one safety chain.
Existing law requires every office licensed as a
repossession agency to be under the active charge of a
qualified certificate holder. (Business & Professions Code
Section 7505.1.) Certificate holders must be at least 18
years of age and have two years of lawful experience.
Existing law defines "lawful experience" as experience in
recovering collateral as a registrant under the Act, or as
a salaried employee of a financial institution or vehicle
dealer. (Business & Professions Code Section 7504.)
This bill provides that lawful experience does not include
any employment performing work other than skip tracing,
debt collection, or actual collateral recovery.
This bill clarifies that nothing prohibits a licensee from
having more than one qualified certificate holder in an
office.
Existing law provides that a peace officer or, in certain
other cases, a magistrate, may cause the removal and
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seizure of a vehicle, as specified. Existing law also
provides 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, 21100.4.)
This bill requires law enforcement agencies that impound
vehicles to remain open, to issue a release to the
registered owner or legal owner, or the agent of either,
whenever the agency is open to serve the public.
This bill requires specified facilities where impounded
vehicles are stored to accept valid bank credit cards, as
defined or cash as payment for towing, storage, and related
fees and would make the facility civilly liable for four
times the amount of those fees, not to exceed $500, if they
fail to do so. This bill requires those facilities to have
sufficient funds on the premises to accommodate, and make
change in, a reasonable monetary transaction.
This bill prohibits a legal owner, registered owner, or
person in possession of a vehicle from changing, or
attempting to change, the name of the legal owner or
registered owner until the vehicle is released from
impound.
This bill requires a legal owner to indemnify and hold
harmless a storage facility for any claims arising out of
the release of the vehicle to the legal owner or the legal
owner's agent and from any damage to the vehicle after its
release, including the reasonable costs associated with
defending any such claims.
This bill imposes additional requirements regarding the
release of impounded vehicles, as specified, and makes it a
misdemeanor for a legal owner of an impounded vehicle to
knowingly release the vehicle to the registered owner in
certain circumstances.
This bill is double jointed with AB 282 (Assembly
Transportation Committee).
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Related legislation
This bill is identical to SB 1469 (Calderon), of 2008. In
vetoing that bill, the Governor stated:
The historic delay in passing the 2008-2009 State
Budget has forced me to prioritize the bills sent to my
desk at the end of the year's legislative session.
Given the delay, I am only signing bills that are the
highest priority for California. This bill does not
meet that standard and I cannot sign it at this time.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
New reimbursable Unknown,
potentially significant General
mandate on local
law enforcement
SUPPORT : (Verified 8/17/09)
California Association of Licensed Repossessors (source)
California Financial Services Association
ARGUMENTS IN SUPPORT : According to the author's office,
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.
ASSEMBLY FLOOR :
AYES: Adams, Anderson, Arambula, Beall, Bill Berryhill,
Tom Berryhill, Blakeslee, Block, Blumenfield, Brownley,
Buchanan, Caballero, Charles Calderon, Carter, Chesbro,
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Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore,
Duvall, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuller, Furutani, Galgiani, Gilmore, Hagman, Hall,
Harkey, Hayashi, Hernandez, Hill, Huber, Huffman,
Jeffries, Jones, Knight, Krekorian, Lieu, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,
Niello, Nielsen, John A. Perez, V. Manuel Perez,
Portantino, Price, Ruskin, Salas, Silva, Skinner,
Solorio, Audra Strickland, Swanson, Torlakson, Torres,
Torrico, Tran, Villines, Yamada
NO VOTE RECORDED: Ammiano, Fuentes, Gaines, Garrick,
Saldana, Smyth, Bass
RJG:do 8/17/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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