Bill Text: CA SB1004 | 2009-2010 | Regular Session | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Vehicles: licensed dealers and salespersons: credit

Spectrum: Partisan Bill (Republican 10-0)

Status: (Passed) 2010-09-29 - Chaptered by Secretary of State. Chapter 483, Statutes of 2010. [SB1004 Detail]

Download: California-2009-SB1004-Enrolled.html

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BILL NUMBER: SB 1004	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 26, 2010
	PASSED THE ASSEMBLY  AUGUST 17, 2010
	AMENDED IN ASSEMBLY  AUGUST 16, 2010
	AMENDED IN ASSEMBLY  MAY 28, 2010
	AMENDED IN SENATE  MARCH 16, 2010

INTRODUCED BY   Senator Huff
   (Coauthors: Senators Cox, Denham, Harman, and Wyland)
   (Coauthors: Assembly Members DeVore, Fuller, Gilmore, Silva, and
Smyth)

                        FEBRUARY 10, 2010

   An act to amend Sections 11709, 11710.2, 11713.20, 11806, 11812,
and 11819 of the Vehicle Code, relating to vehicles.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1004, Huff. Vehicles: licensed dealers and salespersons: credit
scores.
   (1) Existing law imposes licensing and regulatory requirements on
vehicle dealers and vehicle salespersons. Existing law requires a
dealer's place of business to have posted the license issued by the
Department of Motor Vehicles to the dealer and to each salesperson
employed by the dealer.
   This bill would instead authorize the dealer to post a true and
exact copy of the license issued by the Department of Motor Vehicles
to the dealer and to each salesperson employed by the dealer and
would make other conforming changes.
   (2) Existing law requires the applicant of a dealer's or
remanufacturer's license, before the license is issued or renewed by
the department, to procure and file with the department a bond, as
provided. Existing law authorizes the director of the department, if
a deposit is given instead of the bond, to order the deposit returned
at the expiration of specified dates.
   This bill would also authorize the director to order the deposit
to be returned at the expiration of 5 years from the date the
licensee secured and maintained a dealer bond, after posting a
deposit, if the director is satisfied that there are no outstanding
claims against the deposit.
   (3) Existing law requires a dealer that obtains a consumer credit
score from a consumer credit reporting agency, for use in connection
with an application for credit initiated by a consumer for the
purchase or lease of a motor vehicle for specified uses, to provide,
prior to the sale, certain information in at least 10-point boldface
type on a document separate from the sale or lease contract, that
includes, among other things, the credit score obtained and used by
the dealer and the name of the credit reporting agency providing the
credit score to the dealer.
   This bill would delete these requirements and instead require a
dealer to provide a document, in at least 10-point type, that
contains certain information pertaining to credit scores, including
each credit score obtained and used by the dealer and a statement
that a consumer report or credit report is a record of the consumer's
credit history and includes information about whether the consumer
pays his or her obligations on time and how much the consumer owes to
creditors, among other things.
   The bill would provide that use of a specified model form, that
meets federal requirements for form and content, would be deemed to
comply with the above requirements. The bill would also provide that
it does not limit or restrict any rights or remedies otherwise
available under existing law.
   (4) Existing law authorizes the department to refuse to issue, to
suspend, or to revoke a vehicle salesperson's license when it
determines, among other things, that the applicant or licensee has
acted as a vehicle salesperson or engaged in that activity for, or on
behalf of, more than one licensed dealer whose business does not
have identical ownership and structure. Existing law provides that
the law does not preclude a vehicle salesperson from working at more
than one location of one licensed dealer if the business of that
dealer has identical ownership and structure.
   This bill would authorize the department to refuse to issue, to
suspend, or to revoke a vehicle salesperson's license when it
determines, among other things, that the applicant or licensee has
concurrently acted as a vehicle salesperson and engaged in that
activity for, or on behalf of, more than one licensed dealer unless
all of the licensed dealers, for whom that salesperson works, have
common controlling ownership. The bill would also provide that the
law does not preclude a vehicle salesperson from working for more
than one dealer provided that all of the licensed dealers for whom
that salesperson works have common controlling ownership, as defined.

   (5) Existing law requires the salesperson's license to be
displayed continuously during employment and requires that the
license be returned to the salesperson once employment is terminated.
A violation of these requirements is a crime.
   This bill would require the dealer to display the license or a
true and exact copy of the license continuously at each location
where the salesperson is actually engaged in the selling of vehicles.
Once the employment is terminated, this bill would require all
copies used by the dealer for posting or display to be destroyed by
the dealer. By expanding the scope of an existing crime, this bill
would impose a state-mandated local program.
   (6) 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.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 11709 of the Vehicle Code is amended to read:
   11709.  (a) A dealer's established place of business, and other
sites or locations as may be operated and maintained by the dealer in
conjunction with his or her established place of business, shall
have posted, in a place conspicuous to the public in each and every
location, the license, or a true and exact copy of the license,
issued by the department to the dealer and to each salesperson
employed by the dealer and shall have erected or posted thereon signs
or devices providing information relating to the dealer's name and
the location and address of the dealer's established place of
business to enable any person doing business with the dealer to
identify him or her properly. A sign erected or posted pursuant to
this subdivision, on an established place of business, shall have an
area of not less than two square feet per side displayed and shall
contain lettering of sufficient size to enable the sign to be read
from a distance of at least 50 feet. This section shall not apply to
a dealer who is a wholesaler involved for profit only in the sale of
vehicles between licensed dealers.
   (b) Notwithstanding Section 11704 and this section, a dealer may
display vehicles at a fair, exposition, or similar exhibit without
securing a branch license, if no actual sales are made at those
events and the display does not exceed 30 days.
   (c) A vehicle displayed pursuant to subdivision (b) or (e) shall
be identified by a sign or device providing information relating to
the dealer's name and the location and address of the dealer's
established place of business.
   (d) This section shall not be applicable to a dealer who deals
only in off-highway vehicles subject to identification, as defined in
Section 38012.
   (e) Notwithstanding Section 11704 and this section, a vessel
dealer may display a trailer and may sell a trailer in conjunction
with the sale of a vessel at a fair, exposition, or similar exhibit
without securing a branch license if the display does not exceed 30
days.
  SEC. 2.  Section 11710.2 of the Vehicle Code is amended to read:
   11710.2.  If a deposit is given instead of the bond required by
Section 11710 both of the following apply:
   (a) (1) The director may order the deposit returned at the
expiration of any of the following dates:
   (A) Three years from the date an applicant for a dealer's license
who has operated a business of selling vehicles under a temporary
permit has ceased to do business.
   (B) Three years from the date a licensee has ceased to be
licensed, if the director is satisfied that there are no outstanding
claims against the deposit.
   (C) Five years from the date a licensee secured and maintained a
dealer bond, pursuant to Section 11710, after posting a deposit, if
the director is satisfied that there are no outstanding claims
against the deposit.
   (2) A judge of a superior court may order the return of the
deposit prior to the expiration of the dates provided in paragraph
(1) upon evidence satisfactory to the judge that there are no
outstanding claims against the deposit.
   (b) If either the director, department, or state is a defendant in
any action instituted to recover all or any part of the deposit, or
any action is instituted by the director, department, or state to
determine those entitled to any part of the deposit, the director,
department, or state shall be paid reasonable attorney fees and costs
from the deposit. Costs shall include those administrative costs
incurred in processing claims against the deposit.
  SEC. 3.  Section 11713.20 of the Vehicle Code is amended to read:
   11713.20.  (a) A dealer that obtains a consumer credit score, as
defined in subdivision (b) of Section 1785.15.1 of the Civil Code,
from a consumer credit reporting agency, as defined in subdivision
(d) of Section 1785.3 of the Civil Code, for use in connection with
an application for credit initiated by a consumer for the purchase or
lease of a motor vehicle for personal, family, or household use,
shall provide, prior to the sale or lease of the vehicle, the
following information to the consumer in at least 10-point type on a
document separate from the sale or lease contract:
   (1) Each credit score obtained and used by the dealer.
   (2) A statement that a consumer report, or a credit report, is a
record of the consumer's credit history and includes information
about whether the consumer pays his or her obligations on time and
how much the consumer owes to creditors.
   (3) A statement that a credit score is a number that takes into
account information in a consumer report and that a credit score can
change over time to reflect changes in the consumer's credit history.

   (4) A statement that the consumer's credit score can affect
whether the consumer can obtain credit and what the cost of that
credit will be.
   (5) The range of possible credit scores under the model used to
generate that credit score.
   (6) The distribution of credit scores among consumers who are
scored under the same scoring model that is used to generate the
consumer's credit score using the same scale as that of the credit
score that is provided to the consumer, presented in the form of a
bar graph containing a minimum of six bars that illustrates the
percentage of consumers with credit scores within the range of scores
reflected in each bar, or by other clear and readily understandable
graphical means, or a clear and readily understandable statement
informing the consumer how his or her credit score compares to the
scores of other consumers. Use of a graph or statement obtained from
the person providing the credit score that meets the requirements of
this paragraph is deemed to comply with this requirement.
   (7) The date the credit score was created.
   (8) The name of the consumer reporting agency or other person that
provided each credit score obtained and used by the dealer.
   (9) A statement that the consumer is encouraged to verify the
accuracy of the information contained in the consumer report and has
the right to dispute any inaccurate information in the report.
   (10) A statement that federal law gives the consumer the right to
obtain copies of his or her consumer reports directly from the
consumer reporting agencies, including a free report from each of the
nationwide consumer reporting agencies once during any 12-month
period.
   (11) Contact information for the centralized source from which
consumers may obtain their free annual consumer reports.
   (12) A statement directing consumers to the Internet Web sites of
the Federal Reserve Board and Federal Trade Commission to obtain more
information about consumer reports.
   (b) Appropriate use by a dealer of the model form described in
Section 640.5(e)(5) of Title 16 of the Code of Federal Regulations
and contained in Title 16 of the Code of Federal Regulations Part B,
Appendix B, Model Form B-4, as promulgated on January 15, 2010, is
deemed to comply with the requirements of this section. Use of the
model form is optional.
   (c) This section does not apply to the purchase or lease of a
motorcycle or an off-highway motor vehicle subject to identification
under Section 38010.
   (d) This section does not limit or restrict any rights or remedies
otherwise available under existing law.
  SEC. 4.  Section 11806 of the Vehicle Code is amended to read:
   11806.  The department, after notice and hearing, may refuse to
issue, or may suspend or revoke, a vehicle salesperson's license when
it makes any of the following findings and determinations:
   (a) The applicant or licensee has outstanding an unsatisfied final
court judgment rendered in connection with an activity licensed
under this division.
   (b) The applicant or licensee has failed to pay funds or property
received in the course of employment to a dealer entitled thereto.
   (c) The applicant or licensee has failed to surrender possession
of, or failed to return, a vehicle to a dealer lawfully entitled
thereto upon termination of employment.
   (d) A cause for refusal, suspension, or revocation exists under
any provision of Sections 11302 to 11909, inclusive.
   (e) The applicant was previously the holder of an occupational
license issued by another state authorizing the same or similar
activities of a license issued under this division and that license
was revoked or suspended for cause and was never reissued, or was
suspended for cause, and the terms of suspension have not been
fulfilled.
   (f) The applicant or licensee has acted as a dealer by purchasing
or selling vehicles while employed by a licensed dealer without
reporting that fact to the dealer or without utilizing the report of
sale documents issued to the dealer.
   (g) The applicant or licensee has concurrently acted as a vehicle
salesperson and engaged in that activity for, or on behalf of, more
than one licensed dealer unless all of the licensed dealers for whom
that salesperson works have common controlling ownership. Nothing in
this section restricts the number of dealerships of which a person
may be an owner, officer, or director, or precludes a vehicle
salesperson from working for more than one dealer, provided that all
of the licensed dealers for whom that salesperson works have common
controlling ownership. For purposes of this subdivision, dealers have
common controlling ownership when more than 50 percent of the
ownership interests in each dealer are held by the same person or
persons, either directly or through one or more wholly owned
subsidiary entities.
   (h) The applicant or licensee has acted as a vehicle salesperson
without having first complied with Section 11812.
   (i) The applicant or licensee was a managerial employee of a
dealer during the time a person under the direction or control of the
managerial employee committed wrongful acts which resulted in the
suspension or revocation of the dealer's license.
   (j) The applicant or licensee has acted as a dealer by purchasing
or selling any vehicle and using the license, report of sale books,
purchase drafts, financial institution accounts, or other supplies of
a dealer to facilitate that purchase or sale, when the applicant or
licensee is not acting on behalf of that dealer.
  SEC. 5.  Section 11812 of the Vehicle Code is amended to read:
   11812.  (a) A vehicle salesperson licensed under this article
shall, at the time of employment, deliver his or her salesperson's
license to his or her employing dealer for the posting of the
salesperson's license or a true and exact copy of the salesperson's
license in a place conspicuous to the public at each location where
he or she is actually engaged in the selling of vehicles for the
employing dealer.
   (b) The license, or a true and exact copy of the license, shall be
displayed continuously at each location where he or she is actually
engaged in the selling of vehicles during the employment. If a
vehicle salesperson's employment is terminated, the license shall be
returned to the salesperson and all copies of the license used by the
dealer for posting or display shall be destroyed by the dealer.
   (c) A vehicle salesperson licensed pursuant to this article shall
report in writing to the department every change of residence address
within five days of the change.
   (d) A person currently or previously licensed under this article
who no longer resides at the address last filed with the department
may be served with process issued pursuant to Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code by registered mail at that residence, unless the
person has notified the department in writing of another address
where service may be made.
  SEC. 6.  Section 11819 of the Vehicle Code is amended to read:
   11819.  It is unlawful for a person:
   (a) To lend a salesperson's license to any other person or
knowingly permit its use by another.
   (b) To display or represent a salesperson's license not issued to
the person as being his or her license.
   (c) To fail or refuse to surrender to the department, upon its
lawful demand, a salesperson's license that has been suspended,
revoked, or canceled.
   (d) To permit any unlawful use of a salesperson's license issued
to him or her.
   (e) To photograph, photostat, duplicate, or in any way reproduce a
salesperson's license or facsimile thereof in a manner that it could
be mistaken for a valid license, or to display or have in possession
a photograph, photostat, duplicate, reproduction, or facsimile
unless for display by a dealer, or as authorized by this code.
  SEC. 7.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.