78R4476 MXM-F
By: Harris S.B. No. 351
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of persons who repossess motor vehicles;
providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 5, Occupations Code, is
amended by adding Chapter 902 to read as follows:
CHAPTER 902. REPOSSESSION SERVICES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 902.001. DEFINITIONS. In this chapter:
(1) "Commission" means the Texas Commission of
Licensing and Regulation.
(2) "Department" means the Texas Department of
Licensing and Regulation.
(3) "Executive director" means the executive director
of the department.
(4) "Lender" means:
(A) a state or national bank;
(B) a state or federal savings and loan
association or savings bank;
(C) a credit union; or
(D) a person that holds a license issued under
Chapter 348, Finance Code.
(5) "Motor vehicle" has the meaning assigned by
Section 501.002, Transportation Code.
(6) "Repossession" means the recovery of a motor
vehicle that has been sold or leased under a security agreement that
contains a repossession clause by an individual authorized by the
legal owner, lienholder, or lessor to recover the motor vehicle or
to collect payment in lieu of recovery.
(7) "Repossession agent" means an individual who
engages in a repossession for consideration.
(8) "Repossession company" means a business entity
that engages in the business of performing, or advertises that the
business entity performs, repossessions for consideration.
Sec. 902.002. APPLICABILITY OF OTHER LAW. Chapter 51
applies to this chapter, including the power to impose an
administrative sanction, assess an administrative penalty, or seek
a civil penalty, for a violation of this chapter or a rule or order
adopted or entered under this chapter.
[Sections 902.003-902.050 reserved for expansion]
SUBCHAPTER B. GENERAL POWERS AND DUTIES
Sec. 902.051. RULES. The executive director may adopt
rules necessary to administer this chapter.
Sec. 902.052. FEES. The commission may by rule set fees in
amounts reasonable and necessary to administer this chapter.
Sec. 902.053. DIRECTORY OF LICENSE HOLDERS. (a) The
department shall annually prepare a directory of license holders.
(b) The department shall provide the directory to the public
on request without charge.
(c) The department may comply with this section by
publishing the directory on-line.
Sec. 902.054. INVESTIGATIONS. (a) The department may
examine:
(1) a record maintained under this chapter; or
(2) a record or object the department determines is
necessary to conduct a complete investigation.
(b) To administer this chapter, the department may question
a person who:
(1) is associated with the business of a license
holder; or
(2) claims that the person was negatively affected by
a violation of this chapter committed by a license holder.
Sec. 902.055. AUDIT. The department may periodically
audit the business records of a license holder.
Sec. 902.056. PROPER TOWING EQUIPMENT. With the advice of
the Texas Department of Transportation and the Department of Public
Safety, the executive director shall adopt rules as necessary to
ensure that a vehicle used for a repossession by a license holder is
a tow truck suitable in terms of safety, considering factors such as
size, towing capacity, or the use of other equipment.
[Sections 902.057-902.100 reserved for expansion]
SUBCHAPTER C. LICENSE REQUIREMENTS
Sec. 902.101. LICENSE REQUIRED. (a) A person may not
engage in a repossession for consideration unless each individual
who engages in the recovery holds a repossession agent license.
(b) A person may not advertise that the person performs
repossessions unless the person holds a repossession agent or
repossession company license.
(c) A person may not hire a person to engage in a
repossession unless the person hired holds a license issued under
this chapter.
Sec. 902.102. LICENSE CLASSIFICATIONS. The executive
director shall issue a repossession agent or repossession company
license to an eligible applicant.
Sec. 902.103. LICENSE APPLICATION. (a) A license
applicant must submit an application on a form prescribed by the
department.
(b) The application must specify the class of license for
which the applicant is applying.
(c) An application for a repossession agent license must be
accompanied by:
(1) the application fee; and
(2) the examination fee.
(d) An application for a repossession company license must
be accompanied by:
(1) the application fee;
(2) the license number of each employee who holds a
repossession agent license; and
(3) a copy of the current sales tax permit issued to
the applicant by the comptroller under Chapter 151, Tax Code, or, if
the department determines that technology allows, the applicant may
submit the applicant's tax identification number to the department
for submission by the department to the comptroller for electronic
verification.
(e) The department shall deny an application provided under
Subsection (d) if the applicant's sales tax permit is canceled,
suspended, or revoked under Subchapter F, Chapter 151, Tax Code.
Sec. 902.104. ELIGIBILITY REQUIREMENTS FOR REPOSSESSION
AGENT LICENSE; BACKGROUND CHECK. (a) An applicant for a
repossession agent license must be at least 18 years old.
(b) The department shall conduct a criminal background
check on the applicant as authorized under Chapter 411, Government
Code.
(c) The applicant is not eligible for a license if the
applicant has been finally convicted of a felony or misdemeanor
that directly relates to the duties and responsibilities of the
licensed occupation.
(d) The executive director may deny an application if the
applicant previously held a repossession agent license and the
license was revoked.
(e) Except as provided by Subsection (c), Chapter 53 applies
to this chapter.
Sec. 902.105. EXAMINATION FOR REPOSSESSION AGENT LICENSE.
(a) The executive director shall require an examination for a
repossession agent license.
(b) The executive director shall prescribe the method and
content of the examination and shall set compliance requirements
for the examination.
(c) The examination shall be offered at least annually or
more frequently as determined by the executive director.
(d) The examination shall be offered at various locations in
this state as determined by the executive director.
Sec. 902.106. EXAMINATION RESULTS. (a) Not later than the
30th day after the date on which a person takes a licensing
examination under this chapter, the department shall notify the
person of the results of the examination.
(b) If the examination is graded or reviewed by a testing
service:
(1) the department shall notify the person of the
results of the examination not later than the 14th day after the
date the department receives the results from the testing service;
and
(2) if notice of the examination results will be
delayed for longer than 90 days after the examination date, the
department shall notify the person of the reason for the delay
before the 90th day.
(c) The department may require a testing service to notify a
person of the results of the person's examination.
(d) If requested in writing by a person who fails a
licensing examination administered under this chapter, the
department shall furnish the person with an analysis of the
person's performance on the examination.
Sec. 902.107. ISSUANCE OF LICENSE; TERM. (a) On payment of
the license fee, the department shall issue the appropriate license
to an applicant who:
(1) meets the requirements of this subchapter;
(2) provides evidence of any insurance coverage
required by the executive director in accordance with this chapter;
and
(3) passes the examination, if the application is for
a repossession agent license.
(b) A license is valid for one year from the date of
issuance.
Sec. 902.108. RULES REGARDING RENEWAL. The executive
director may adopt rules regarding the renewal of a license,
including rules requiring confirmation of the continued
eligibility of the license holder before renewal.
Sec. 902.109. LICENSE EXPIRATION AND RENEWAL. (a) A person
who is otherwise eligible to renew a license may renew an unexpired
license by paying the required renewal fee to the department before
the expiration date of the license. A person whose license has
expired may not engage in activities that require a license until
the license has been renewed.
(b) A person whose license has been expired for 90 days or
less may renew the license by paying to the department a renewal fee
that is equal to 1-1/2 times the normally required renewal fee.
(c) A person whose license has been expired for more than 90
days but less than one year may renew the license by paying to the
department a renewal fee that is equal to two times the normally
required renewal fee.
(d) A person whose license has been expired for one year or
more may not renew the license. The person may obtain a new license
by complying with the requirements and procedures, including the
examination requirements, for obtaining an original license.
(e) A person who was licensed in this state, moved to
another state, and is currently licensed and has been in practice in
the other state for the two years preceding the date of application
may obtain a new license without reexamination. The person must pay
to the department a fee that is equal to two times the normally
required renewal fee for the license.
(f) Not later than the 30th day before the date a person's
license is scheduled to expire, the department shall send written
notice of the impending expiration to the person at the person's
last known address according to the records of the department.
Sec. 902.110. BOND AND INSURANCE REQUIREMENTS. The
executive director by rule shall set bond and insurance
requirements for license holders.
Sec. 902.111. CONTINUING EDUCATION REQUIREMENTS FOR
REPOSSESSION AGENTS. (a) The executive director by rule shall
require continuing education as a condition for renewal of a
repossession agent license.
(b) The continuing education requirements may not exceed
four hours annually.
Sec. 902.112. CONTINUING EDUCATION PROVIDERS AND COURSE
APPROVAL. (a) The executive director by rule shall recognize,
prepare, or administer continuing education programs for its
license holders.
(b) The executive director by rule shall recognize and
approve continuing education providers.
Sec. 902.113. RECIPROCITY; WAIVER OF LICENSE REQUIREMENT.
The executive director may waive any prerequisite to obtaining a
license for an applicant after reviewing the applicant's
credentials and determining that the applicant holds a license
issued by another jurisdiction that has licensing requirements
substantially equivalent to those of this state.
Sec. 902.114. PROVISIONAL REPOSSESSION AGENT LICENSE. (a)
The executive director may issue a provisional repossession agent
license to an applicant currently licensed in another jurisdiction
who seeks a license in this state and who:
(1) has been licensed in good standing as a
repossession agent for at least two years in another jurisdiction,
including a foreign country, that has licensing requirements
substantially equivalent to the requirements of this chapter;
(2) has passed a national or other examination
recognized by the executive director relating to repossession
procedures and requirements; and
(3) is sponsored by a person licensed by the
department under this chapter with whom the provisional license
holder will practice during the time the person holds a provisional
license.
(b) The executive director may waive the sponsorship
requirement under Subsection (a)(3) for an applicant if the
executive director determines that compliance with that subsection
would be a hardship to the applicant.
(c) A provisional license is valid until the date the
department approves or denies the provisional license holder's
application for a repossession agent license.
(d) The executive director shall issue a repossession agent
license under this chapter to a provisional license holder if:
(1) the provisional license holder is eligible to be
licensed under Section 902.113 or passes the part of the
examination under Section 902.105 that relates to the applicant's
knowledge and understanding of the laws and rules of this state
relating to repossession; and
(2) the executive director verifies that the
provisional license holder satisfies any other applicable
licensing requirements under this chapter.
(e) The executive director must approve or deny a
provisional license holder's application for a repossession agent
license not later than the 180th day after the date on which the
provisional license is issued. The executive director may extend
the 180-day period if the results of an examination have not been
received by the department before the end of that period.
(f) The commission may establish a fee for provisional
licenses in an amount reasonable and necessary to cover the cost of
issuing the license.
[Sections 902.115-902.150 reserved for expansion]
SUBCHAPTER D. OPERATION OF REPOSSESSION COMPANY; FACILITY
REQUIREMENTS
Sec. 902.151. DEFINITION. In this subchapter, "storage
facility" means the area where a repossession company stores a
repossessed motor vehicle.
Sec. 902.152. OFFICE; HOURS. A repossession company shall
maintain a permanent office with regular office hours of not less
than eight hours per day Monday through Friday, excluding legal
holidays, during which a person may claim personal property from a
repossessed motor vehicle.
Sec. 902.153. STORAGE OF REPOSSESSED MOTOR VEHICLE. A
repossession company shall store a repossessed motor vehicle inside
a storage facility that complies with the requirements of this
subchapter.
Sec. 902.154. ENCLOSURE AND SECURITY AT FACILITY. (a) Each
storage facility shall be:
(1) completely enclosed by a fence at least six feet
high; and
(2) locked when the license holder or an employee of
the license holder is not at the facility.
(b) A repossession company shall secure a repossessed motor
vehicle to prevent theft of the vehicle or its contents, including
locking doors, closing windows and hatchbacks, and raising or
covering convertible tops.
Sec. 902.155. FACILITY SURFACE. A storage facility must
contain an all-weather surface such as concrete, asphalt,
black-top, stone, macadam, limestone, iron ore, gravel, shell, or
caliche. The surface must enable the safe and effective movement of
the vehicle on all portions of the lot, both under the vehicle's own
power and under tow, at all times and regardless of weather
conditions.
Sec. 902.156. FACILITY LIGHTING. A repossession company
shall maintain lighting at the storage facility sufficient to allow
inspection of a repossessed motor vehicle for damage at the time of
the vehicle's release, including at least a 250 watt light bulb for
each quarter acre of storage area.
Sec. 902.157. FACILITY SIGNS. A repossession company shall
post a clearly visible and readable sign at the facility's main
entrance. The sign shall:
(1) use letters at least two inches in height, with
contrasting background;
(2) be visible from at least 10 feet;
(3) contain the street address of the facility; and
(4) contain the repossession company's name, address,
phone number, office hours, and license number.
Sec. 902.158. SHARING OF STORAGE FACILITY PROHIBITED. A
repossession company may not share a storage facility with another
repossession company.
Sec. 902.159. ENTRY OF TOW TRUCKS. A repossession company
may not permit a tow truck to enter its storage facility unless the
tow truck complies with the rules adopted under Section 902.056.
[Sections 902.160-902.200 reserved for expansion]
SUBCHAPTER E. PRACTICE BY LICENSE HOLDER
Sec. 902.201. USE OF PROPER TOWING EQUIPMENT. A
repossession agent may not engage in a repossession unless the tow
truck used by the agent complies with department rules regarding
safety.
Sec. 902.202. USE OF FORCE; BREACH OF THE PEACE. A
repossession agent may not use force or breach the peace when
engaging in a repossession.
Sec. 902.203. EMPLOYMENT OR HIRING OF REPOSSESSION AGENT.
(a) A licensed repossession agent may not engage in a repossession
unless the agent is hired or employed by a licensed repossession
company or a lender.
(b) A person may not hire or employ a licensed repossession
agent unless the person is a licensed repossession company or a
lender.
Sec. 902.204. DUTY TO REPORT REPOSSESSION TO LAW
ENFORCEMENT. Not later than two hours after engaging in a
repossession, a repossession agent shall report the repossession to
the police department of the municipality in which the recovery
occurred or, if the recovery was not located in a municipality
having a police department, to the sheriff of the county in which
the recovery occurred. The report must include:
(1) the license number and telephone number of each
repossession agent engaging in the repossession;
(2) the location at which the repossession occurred
and the location at which the motor vehicle is stored; and
(3) a description of the motor vehicle recovered,
including identification information such as a vehicle
identification number and the state and number of a license plate.
[Sections 902.205-902.250 reserved for expansion]
SUBCHAPTER F. ENFORCEMENT
Sec. 902.251. CEASE AND DESIST ORDERS. The department may
issue a cease and desist order.
Sec. 902.252. CIVIL PENALTIES. (a) Except as provided by
Subsection (b), a person who violates this chapter is subject to a
civil penalty under Section 51.352 of not less than $2,000 for the
first violation and not less than $4,000 for each subsequent
violation.
(b) A repossession company or lender who violates this
chapter is subject to a civil penalty of not less than $4,000 for
the first violation and not less than $8,000 for each subsequent
violation.
Sec. 902.253. CRIMINAL PENALTY. (a) A person commits an
offense if the person knowingly engages in a repossession without
holding a license issued under this chapter.
(b) Each repossession of a motor vehicle constitutes a
separate offense.
(c) An offense under this section is a Class B misdemeanor.
SECTION 2. Section 411.093(a), Government Code, is amended
to read as follows:
(a) The Texas Department of Licensing and Regulation is
entitled to obtain from the department criminal history record
information maintained by the department that relates to a person
who is:
(1) an applicant for a license under:
(A) Chapter 902, Occupations Code; or
(B) Chapter 2052, Occupations Code [the Texas
Boxing and Wrestling Act (Article 8501-1, Vernon's Texas Civil
Statutes)]; or
(2) the holder of a license under those chapters [that
Act].
SECTION 3. (a) A person is not required to obtain a license
under Subchapter C, Chapter 902, Occupations Code, as added by this
Act, until September 1, 2004.
(b) The executive director of the Texas Department of
Licensing and Regulation shall adopt rules as required under
Chapter 902, Occupations Code, as added by this Act, not later than
June 1, 2004.
SECTION 4. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2003.
(b) Subchapters D, E, and F, Chapter 902, Occupations Code,
as added by this Act, take effect September 1, 2004.