SB382 - Vehicle repossessions.

Amended IN Senate March 24, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 382 Introduced by Senator Jones Strickland February 14, 2025 An act to amend Section 100 of the Government Code, relating to state government. 7500.2 of the Business and Professions Code, to add Section 3075 to the Civil Code, and to amend Sections 4000, 14602.6, 14602.7, and 14602.8 of the Vehicle Code, relating to vehicles. LEGISLATIVE COUNSEL'S DIGEST SB 382, as amended, Jones Strickland. State government: sovereignty. Vehicle repossessions. Existing law regulates repossession agencies that locate or recover collateral, including vehicles, and provides for their licensure by the Bureau of Security and Investigative Services. Existing law requires a repossession agency to remove personal effects from the collateral, inventory the personal effects, and store the personal effects until claimed or for at least 60 days, as specified. This bill would prohibit a repossession agency from discussing, conspiring, or agreeing with a 3rd party to set a fee, rate, or cost for personal effects and from accepting a hold harmless agreement or release of indemnification in lieu of removing, inventorying, and storing personal effects. Existing law authorizes a person to place a lien on a registered vehicle for authorized towing, storage, or labor associated with recovery or load salvage of the vehicle, among other things. This bill would clarify that provisions relating to vehicle liens do not prohibit a licensed repossession agency from filing a lien. Existing law generally prohibits a tow yard, impounding agency, or governmental agency, or a person acting on their behalf, from refusing to release a vehicle or other collateral to anyone legally entitled to the vehicle or other collateral. Under specified circumstances, including after a vehicle is seized because the driver has a suspended or revoked driver’s license, existing law requires a person in possession of a vehicle to release the vehicle without requiring documents other than those specified. This bill would specify that requiring additional documents to release a vehicle is a violation of the statute prohibiting a tow yard, impounding agency, or governmental agency, or a person acting on their behalf, from refusing to release a vehicle or other collateral to anyone legally entitled to the vehicle or other collateral. Existing law provides that the sovereignty of the state resides in the people thereof, and all writs and processes shall issue in their name. This bill would make a nonsubstantive change to these provisions. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 7500.2 of the Business and Professions Code is amended to read: 7500.2. (a) A repossession agency means and includes any person who, for any consideration whatsoever, engages in business or accepts employment to locate or recover collateral, whether voluntarily or involuntarily, including, but not limited to, collateral registered under the provisions of the Vehicle Code which is subject to a security agreement, except for any person registered pursuant to Article 7 (commencing with Section 7506). 7506.3). (b) A repossession agency licensed pursuant to this chapter shall only transact business with another person or entity as an independent contractor. (c) A repossession agency shall not allow do any of the following: (1) Allow a person or entity other than the qualified certificate holder, as provided in Section 7505.1, or the owner or officer of the repossession agency, to manage the day-to-day operations, operate, control, or transact business covered by this act, except as provided in Section 7503.3. (2) Discuss, conspire, or agree with a third party to set a fee, rate, or cost for personal effects. (3) Accept a hold harmless agreement or release of indemnification in lieu of removing, inventorying, and storing personal effects pursuant to Sections 7507.9 and 7507.10. SEC. 2. Section 3075 is added to the Civil Code, immediately following Section 3074, to read: 3075. This chapter does not prohibit a repossession agency licensed pursuant to Chapter 11 (commencing with Section 7500) of Division 3 of the Business and Professions Code from filing a lien. SEC. 3. Section 4000 of the Vehicle Code is amended to read: 4000. (a) (1) A person shall not drive, move, or leave standing upon a highway, or in an offstreet public parking facility, any motor vehicle, trailer, semitrailer, pole or pipe dolly, or logging dolly, unless it is registered and the appropriate fees have been paid under this code or registered under the permanent trailer identification program, except that an off-highway motor vehicle which displays an identification plate or device issued by the department pursuant to Section 38010 may be driven, moved, or left standing in an offstreet public parking facility without being registered or paying registration fees. (2) For purposes of this subdivision, “offstreet public parking facility” means either of the following: (A) Any publicly owned parking facility. (B) Any privately owned parking facility for which no fee for the privilege to park is charged and which is held open for the common public use of retail customers. (3) This subdivision does not apply to any motor vehicle stored in a privately owned offstreet parking facility by, or with the express permission of, the owner of the privately owned offstreet parking facility. (4) (A) (i) A violation of this subdivision shall not be the sole basis for any enforcement action before the second month after the month of expiration of the vehicle’s registration. (ii) Notwithstanding clause (i), if a vehicle is stopped for any other violation of this code, enforcement action for a violation of this subdivision may be taken before the second month following the month of expiration. (B) This paragraph shall be operative from July 1, 2024, to January 1, 2030, inclusive. (b) A person shall not drive, move, or leave standing upon a highway any motor vehicle, as defined in Chapter 2 (commencing with Section 39010) of Part 1 of Division 26 of the Health and Safety Code, that has been registered in violation of Part 5 (commencing with Section 43000) of Division 26 of the Health and Safety Code. (c) Subdivisions (a) and (b) do not apply to off-highway motor vehicles operated pursuant to Sections 38025 and 38026.5. (d) This section does not apply, following payment of fees due for registration, during the time that registration and transfer is being withheld by the department pending the investigation of any use tax due under the Revenue and Taxation Code. (e) Subdivision (a) does not apply to a vehicle that is towed by a tow truck on the order of a sheriff, marshal, or other official acting pursuant to a court order or on the order of a peace officer acting pursuant to this code. (f) Subdivision (a) applies to a vehicle that is towed from a highway or offstreet parking facility under the direction of a highway service organization when that organization is providing emergency roadside assistance to that vehicle. However, the operator of a tow truck providing that assistance to that vehicle is not responsible for the violation of subdivision (a) with respect to that vehicle. The owner of an unregistered vehicle that is disabled and located on private property, shall obtain a permit from the department pursuant to Section 4003 prior to having the vehicle towed on the highway. (g) (1) Pursuant to Section 4022 and to subparagraph (B) of paragraph (3) of subdivision (o) of Section 22651, a vehicle obtained by a licensed repossessor as a release of collateral is exempt from registration pursuant to this section for purposes of the repossessor removing the vehicle to their 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 subdivision (f) of Section 14602.6. Requiring documents other than those specified in Section 14602.6 is a violation of subdivision (b) of Section 10856. (2) 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 licensee, 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 subdivision. (h) For purposes of this section, possession of a California driver’s license by the registered owner of a vehicle shall give rise to a rebuttable presumption that the owner is a resident of California. SEC. 4. Section 14602.6 of the Vehicle Code is amended to read: 14602.6. (a) (1) Whenever a peace officer determines that a person was driving a vehicle while his or her their driving privilege was suspended or revoked, driving a vehicle while his or her their driving privilege is restricted pursuant to Section 13352 or 23575 and the vehicle is not equipped with a functioning, certified interlock device, or driving a vehicle without ever having been issued a driver’s license, the peace officer may either immediately arrest that person and cause the removal and seizure of that vehicle or, if the vehicle is involved in a traffic collision, cause the removal and seizure of the vehicle without the necessity of arresting the person in accordance with Chapter 10 (commencing with Section 22650) of Division 11. A vehicle so impounded shall be impounded for 30 days. (2) The impounding agency, within two working days of impoundment, shall send a notice by certified mail, return receipt requested, to the legal owner of the vehicle, at the address obtained from the department, informing the owner that the vehicle has been impounded. Failure to notify the legal owner within two working days shall prohibit the impounding agency from charging for more than 15 days’ impoundment when the legal owner redeems the impounded vehicle. The impounding agency shall maintain a published telephone number that provides information 24 hours a day regarding the impoundment of vehicles and the rights of a registered owner to request a hearing. The law enforcement agency shall be 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 for nonemergency business. (b) The registered and legal owner of a vehicle that is removed and seized under subdivision (a) or their agents shall be provided the opportunity for a storage hearing to determine the validity of, or consider any mitigating circumstances attendant to, the storage, in accordance with Section 22852. (c) Any period in which a vehicle is subjected to storage under this section shall be included as part of the period of impoundment ordered by the court under subdivision (a) of Section 14602.5. (d) (1) An impounding agency shall release a vehicle to the registered owner or his or her the registered owner’s agent prior to the end of 30 days’ impoundment under any of the following circumstances: (A) When the vehicle is a stolen vehicle. (B) When the vehicle is subject to bailment and is driven by an unlicensed employee of a business establishment, including a parking service or repair garage. (C) When the license of the driver was suspended or revoked for an offense other than those included in Article 2 (commencing with Section 13200) of Chapter 2 of Division 6 or Article 3 (commencing with Section 13350) of Chapter 2 of Division 6. (D) When the vehicle was seized under this section for an offense that does not authorize the seizure of the vehicle. (E) When the driver reinstates his or her their driver’s license or acquires a driver’s license and proper insurance. (2) No A vehicle shall not be released pursuant to this subdivision without presentation of the registered owner’s or agent’s currently valid driver’s license to operate the vehicle and proof of current vehicle registration, or upon order of a court. (e) The registered owner or his or her the registered owner’s agent is responsible for all towing and storage charges related to the impoundment, and any administrative charges authorized under Section 22850.5. (f) A vehicle removed and seized under subdivision (a) shall be released to the legal owner of the vehicle or the legal owner’s agent prior to the end of 30 days’ impoundment 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 legal owner’s agent pays all towing and storage fees related to the seizure of the vehicle. No lien Lien sale processing fees shall not be charged to the legal owner who redeems the vehicle prior to the 15th day of impoundment. Neither the impounding authority nor any person having possession of the vehicle shall collect from the legal owner of the type specified in paragraph (1), or the legal owner’s agent 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 or registered owner or the owner’s agent 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 cred [Text truncated for display. Full text available on Congress.gov.]