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AB-1247 Vehicles: release of stored vehicles to repossessors.(2017-2018)

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Date Published: 07/03/2017 09:00 PM
AB1247:v97#DOCUMENT

Amended  IN  Senate  July 03, 2017
Amended  IN  Assembly  May 02, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1247


Introduced by Assembly Member Chen

February 17, 2017


An act to amend, repeal, and add Sections 7500.1, 7503.1, 7503.4, 7503.5, 7507.2, 7508.2, 7508.7, 7508.8, 7510.1, and 7510.2 of, and to add and repeal Section 7503.15 of, the Business and Professions Section 22850.7 to the Vehicle Code, relating to professions and vocations. vehicles.


LEGISLATIVE COUNSEL'S DIGEST


AB 1247, as amended, Chen. Collateral Recovery Act: repossession agencies: limited liability companies. Vehicles: release of stored vehicles to repossessors.
Existing law authorizes the removal, storage, and impoundment of a vehicle from a highway, or from public or private places, under prescribed circumstances. Existing law provides procedures for the release of a stored vehicle to the registered owner or the legal owner, as specified. Under existing law, such as the tow and impound authority for reckless driving, a law enforcement agency, impounding agency, and storage facility is held harmless from any claims arising from the release of a vehicle to the legal owner, and requires the legal owner to indemnify the agency or facility for such claims. Existing law also requires the release of a vehicle to a legal owner, even if a release has previously been issued to the registered owner, and requires the agency to be available to provide a release during any hours the agency is open to the public for nonemergency services.
This bill would expand those provision to apply whenever a stored vehicle is released to a licensed repossessor or repossession agency, or its employees.

Existing law, the Collateral Recovery Act, provides for the licensure and regulation of repossession agencies by the Bureau of Security and Investigative Services. A violation of the act is a crime. Under the act, a qualified manager is a person who possesses a valid qualification certificate and is in active control or management of, and who is a director of, the licensee’s place of business. Existing law prohibits a domestic or foreign limited liability company from being licensed as a repossession agency.

Existing law, the California Revised Uniform Limited Liability Company Act, authorizes a limited liability company to have any lawful purpose, except as specified, and authorizes a domestic or foreign limited liability company to render services that may be lawfully rendered only pursuant to a license, certificate, or registration authorized by the Business and Professions Code if the provisions of that code authorize a limited liability company or foreign limited liability company to hold that license, certificate, or registration.

This bill, until January 1, 2022, would authorize the bureau to issue a repossession agency license to a limited liability company. The bill would require a qualified manager and a managing member or manager of a limited liability company and its officers, if any, to submit with the application for licensure a specified personal identification form and fingerprints for a background check by federal law enforcement. The bill would also require a limited liability company applicant to include with the application the true name and complete residence address of each managing member and any other officer or member and would authorize the bureau to request a copy of its articles of organization. The bill also would require the application to state the name and complete residence address of the qualified manager to be actively in charge of the limited liability company. The bill would require the application to be signed under penalty of perjury by a manager, member, and qualified manager, as specified. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would authorize the denial, suspension, or revocation of a license if a qualified manager, managing member, or manager of a limited liability company has committed specified acts and would also authorize the imposition of administrative fines for prohibited acts committed by a qualified manager, managing member, or manager. Except as specified, the bill would prohibit the disclosure of, among other things, the residence address of a managing member or manager. If a qualified manager, managing member, or manager of a licensee who has committed specified prohibited acts and had his or her license revoked, the bill would require such person to dispose of any financial interest in any repossession agency, as provided.

This bill would require a limited liability company, as a condition of licensure, to maintain liability insurance, as specified, for damages arising out of claims based on acts, errors, or omissions arising out of the repossession services it provides. The bill would require a Certificate of Liability Insurance, as specified, to be submitted to the bureau, and would require the insurer issuing the certificate to report specified information to the bureau related to the policy. The bill would authorize suspension, as provided, of the license of a licensee that fails to maintain sufficient insurance, or fails to provide proof of the required insurance upon request by the bureau, and would render each member of the limited liability company personally liable, up to $1,000,000 each, for damages resulting to 3rd parties in connection with the company’s performance during the period of suspension, as specified. Because a violation of these requirements would be a crime, the bill would impose a state-mandated local program.

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   Local Program: YESNO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 22850.7 is added to the Vehicle Code, to read:

22850.7.
 (a) Notwithstanding any other provision of this code, this section shall apply to the release of any vehicle removed and stored pursuant to any provision of this code and released to a repossessor or repossession agency licensed pursuant to Chapter 11 (commencing with Section 7500) of Division 3 of the Business and Professions Code, or any officer or employee thereof, acting on behalf of the legal owner of the vehicle.
(b) The law enforcement agency and the impounding agency, including any storage facility acting on behalf of the law enforcement agency or impounding agency, shall not be liable to the registered owner for the improper release of the vehicle to the legal owner or the legal owner’s agent provided the release complies with the applicable provisions of this code.
(c) 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 or licensed repossession agency, 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 the applicable provisions of this code.
(d) The law enforcement agency shall be open to issue a release to a person described in subdivision (a), whenever the agency is open to serve the public for nonemergency business.
(e) A law enforcement agency shall not refuse to issue a release to a person described in subdivision (a) on the grounds that it previously issued a release to a registered owner.