JWW C.S.H.B. 3023 75(R)BILL ANALYSIS PUBLIC SAFETY C.S.H.B. 3023 By: Williams 4-16-97 Committee Report (Substituted) BACKGROUND Recent occurrences of auto theft by persons posing as repossession agents highlight numerous problems in the industry. These problems include drug use, use of inappropriate equipment and inadequate storage facilities. These conditions often put citizens at risk and consume limited law enforment resources. The repossession industry is in need of regulation by licensure, which would establish standard criteria for all repossession agents. PURPOSE This bill will add repossession companies to the businesses subject to regulation by the Board of Private Investigators and Private Security Agencies. RULEMAKING AUTHORITY The board is authorized, after consulting with the Department of Transportation and the Department of Public Safety, to establish rules regarding vehicles used for repossession and identification of those vehicles. This authority is granted in Section 14C(b). The board is authorized to adopt rules to ensure compliance with Section 14C in Subsection (f)(1) of the section. The board is authorized to adopt rules regarding drug testing in Section 39A, which is added by this Act. Rules must be adopted by the board no later than December 31, 1998. SECTION BY SECTION ANALYSIS SECTION 1 Amends Section 1, Private Investigators and Private Security Agencies Act (Article 4413 (29bb), Vernon's Texas Civil Statutes) by adding "and Repossession Companies" to the title. SECTION 2 Amends Section 2, Private Investigators and Private Security Agencies Act (Article 4413 (29bb), Vernon's Texas Civil Statutes) by amending Subdivisions (14), (15), and (16) to add "or a repossession company". (21) and (22) are amended by adding "or a repossession agent." (37) Defines "manufactured home." (38) Defines "mobile home." (39) Defines "motor vehicle." (40) Defines "repossession." (41) Defines "repossession agent." (42) Defines "repossession Company." SECTION 3 Amends Section 3, Private Investigators and Private Security Agencies Act (Article 4413 (29bb), Vernon's Texas Civil Statutes) by striking subdivision (7). Subsequent subdivisions are renumbered accordingly. SECTION 4 Amends Section 5, Subsection (a)(4) to replacing "two" with "five" regarding members appointed by the Governor. In addition, "repossession agent" are added to the list of professions qualifying a person to serve on the board. SECTION 5 Amends Section 13, Private Investigators and Private Security Agencies Act (Article 4413 (29bb), Vernon's Texas Civil Statutes) by adding "repossession company" to Subsections (a) and (c). SECTION 6 Amends the Private Investigators and Private Security Agencies Act (Article 4413 (29bb), Vernon's Texas Civil Statutes) by adding Section 14C, REPOSSESSION COMPANY. (a) States anyone applying for a repossession company license will file a copy of the sales tax permit under Chapter 151, Tax Code. In addition, evidence providing proof of registration and required insurance for all vehicles to be used by the company for the purpose of repossession must be filed with the board. (b) The board will adopt rules, after consulting with the Department of Public Safety and the Department of Transportation, regarding towing equipment suitably designed for use in repossession operations. (c) Any vehicle used for repossession by the holder of a Class D, Class E, Class F, or Class G license holder must be identified by the license number of the repossession company. The license number must be displayed during the repossession in lettering at least 2-1/2" tall in a color that is in contrast to the color of the vehicle. (d) A repossession company is required to ensure that repossessed vehicles, mobile homes, and vessels are properly secured. The secured area must be well lit, be securely surrounded by a six-foot chain link fence (or equivalent security), and be capable of storing no less than 20 full-sized motor homes. (2) The board will conduct regular inspections to ensure compliance with the adopted rules under subsection (d). (e) Repossession companies are required to maintain regular office hours of 8 hours per day, Monday through Friday in order to allow persons to collect personal property from repossessed vehicles, motor homes, and vessels. In addition, these companies are required to maintain a telephone listed in the name of the company. Within one hour of completing a repossession, the companies are required to notify the county sheriff or police chief in the principal city. (f)(1) The board is authorized to adopt rules to ensure compliance with this section. (2) The board may conduct regular inspections to ensure compliance with this section and the rules adopted under this section. SECTION 7 Amends Section 16, Private Investigators and Private Security Agencies Act (Article 4413 (29bb), Vernon's Texas Civil Statutes), by by defining license classifications for repossession companies. SECTION 8 Amends Section 17, Private Investigators and Private Security Agencies Act, by stipulating fees for licenses. SECTION 9 Amends Section 32(a), Private Investigators and Private Agencies Act (Article 4413(29bb), Vernon's Texas Civil Statutes), is to include repossession agents. SECTION 10 Amends Subsection (a), Section 37, Private Investigators and Private Security Agencies Act, by adding repossession agents to those who are required to return the pocket card to the board on termination of their employment. SECTION 11 Amends Subsection (b), Section 38, Private Investigators and Private Security Agencies Act, by adding repossession agents to those who must return their pocket cards to the board upon termination of their position. SECTION 12 Amends Section 12, Private Investigators and Private Security Agencies Act, by adding Section 39A. DRUG TESTING OF REPOSSESSION AGENTS. (a) Anyone applying for the position of repossession agent is required to submit to a drug test in a manner prescribed by the board. (b) The board is required to adopt rules for drug testing under subsection (a). The rules must meet applicable laws regarding testing, and minimum standards under federal law regarding occupational drug testing. SECTION 13 (a) Except as specified in (b), the effective Date is September 1, 1997. (b) Persons required to obtain a repossession license must do so by March 1, 1998. (c) The board must adopt rules specified in this Act no later than December 31, 1997. (d) This subdivision directs the Governor on the appointment of the three additional board members. SECTION 14 Emergency Clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The caption is amended to state "persons who repossess motor vehicles, mobile and manufactured homes, and vessels" to replace "private repossession agencies." SECTION 1 Sec. 1, Article 4413(29bb), Vernon's Texas Civil Statutes, adds "SHORT TITLE." Adds "Repossession Companies" to replace "Private Repossession." SECTION 2 Four additional subdivisions are included that are not in the original version. (37) This subdivision is added to define "manufactured home." Original subdivision becomes (42). (38) This subdivision is added to define "mobile home." Original subdivision becomes (41). (39) This subdivision is added to define "motor vehicle." Original subdivision becomes (40). (40) This subdivision defines "repossession". References to the Texas Motor Vehicle Commission Code, the Texas Manufactured Housing Standards Act, and the Water Safety Act, are removed. (41) Formerly subdivision (38). (42) Formerly subdivision (37). (43) This subdivision is added to define "vessel." SECTION 3 Subdivision (29) is amended by deleting subsections (b),(c), (d) and (e). SECTION 4 Section 5(a)(4), Private Investigators and Private Security Agencies Act, is amended by increasing the number of board members appointed by the Governor from three to five. SECTION 5 The substitute makes no substantive changes to this section. SECTION 6 Section 14C is amended by adding "REPOSSESSION COMPANY" as the section title. (a) This subsection is amended by combining the requirements in subsections (a) and (b). (b) This subsection was previously subsection (c)(1) in the original bill. (c) The requirements regarding the display of a repossession company's license number in this subsection was located in (c)(2) of the original bill. (d) The requirements regarding the proper storage of repossessed vehicles, mobile and manufactured homes, and vessels, was located in (d)(1) of the original bill. (e) The requirements in this subdivision were originally in Subsections (e) and (f). The substitute strikes the last sentence originally found in (f) of the original bill, which addresses failure to comply with Subsection (f). (f)(1) Rulemaking authority which was granted separately in subsections (c)(2), (d)(1), and (e)(1) is combined to address the entire section. (2) Authority to conduct inspections to ensure compliance with this section which was granted separately in subsections (c)(3) and (d)(2)is combined to address the entire section. SECTION 7 Section 16, Private Investigators and Private Agencies Act (Article 4413(29bb), Vernon's Texas Civil Statutes), makes the following changes from the original to the substitute: (b)(4) Section 2, Subdivision (40) replaces (37) to comply with changes made in the substitute. (d) This subsection is amended by replacing references to separate classes of licenses with a statement regarding all licenses listed in Subsection (b) of this section. SECTION 8 Section 17(d), Private Investigators and Private Agencies Act (Article 4413(29bb), Vernon's Texas Civil Statutes), is amended to remove specific references to individual license classes. SECTION 9 This section replaces SECTION 9 of the original bill to amend Section 32(a), Private Investigators and Private Agencies Act (Article 4413(29bb), Vernon's Texas Civil Statutes), is to include repossession agents. SECTION 10 This section replaces SECTION 10 of the original bill to amend Section 37(a), Private Investigators and Private Agencies Act (Article 4413(29bb), Vernon's Texas Civil Statutes), to include repossession agents. SECTION 11 This section replaces SECTION 11 of the original bill to amend Section 38(b), Private Investigators and Private Agencies Act (Article 4413(29bb), Vernon's Texas Civil Statutes), to include repossession agents. SECTION 12 This section is added to replace SECTION 12 of the original bill. Rulemaking authority regarding drug testing is granted to the board. SECTION 13 The effective date does not change, however, Subsections (b), (c), and (d) are added to address specific effective dates and requirements.