By: Harris S.B. No. 1159
(In the Senate - Filed March 8, 2005; March 21, 2005, read
first time and referred to Committee on Business and Commerce;
April 22, 2005, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 7, Nays 0; April 22, 2005,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1159 By: Fraser
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 state or federal 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.
(7) "Repossession agent" means an individual who
engages in a repossession for consideration.
(8) "Repossession company" means a business entity
that primarily engages in the business of performing, or advertises
that the business entity performs, repossessions for
consideration.
Sec. 902.002. ADMINISTRATION OF CHAPTER. The department
shall administer this chapter.
[Sections 902.003-902.050 reserved for expansion]
SUBCHAPTER B. GENERAL POWERS AND DUTIES
Sec. 902.051. RULES. The commission 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 online.
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. ADVISORY COMMITTEE. (a) The presiding
officer of the commission, with the commission's approval, shall
appoint an advisory committee to advise the department in
administering this chapter, or the commission in adopting rules
under this chapter.
(b) A committee must include persons with experience in the
repossession industry.
(c) The presiding officer of the commission, with the
commission's approval, shall appoint the presiding officer of a
committee established under this section.
[Sections 902.057-902.100 reserved for expansion]
SUBCHAPTER C. LICENSE REQUIREMENTS
Sec. 902.101. LICENSE REQUIRED. (a) Except as provided by
Subchapter F, 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 company
license.
(c) A person may not hire a person to engage in a
repossession unless the hired person holds a license issued under
this chapter.
Sec. 902.102. LICENSE CLASSIFICATIONS. The department
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 by 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 commission 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 any
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
commission by rule shall set bond and insurance requirements for
license holders.
Sec. 902.111. CONTINUING EDUCATION REQUIREMENTS FOR
REPOSSESSION AGENTS. (a) The commission 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 commission by rule shall recognize, prepare, or
administer continuing education programs for repossession agent
license holders.
(b) The commission by rule shall recognize and approve
continuing education providers.
Sec. 902.113. RECIPROCITY; WAIVER OF LICENSE REQUIREMENT.
The commission 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 department 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
subdivision 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 department 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 prescribe 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 in which 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 at least
eight hours each day Monday through Friday, excluding legal
holidays, during which a person may claim personal property from a
repossessed motor vehicle.
Sec. 902.153. CUSTODY AND CONTROL OF MOTOR VEHICLE. A
repossession company may maintain possession of a repossessed motor
vehicle until the vehicle is sold at auction or otherwise
transferred to a person with the right to possess the vehicle.
Sec. 902.154. 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. 902.155. ENCLOSURE AND SECURITY AT FACILITY.
(a) Each storage facility must 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 and its contents, including
locking doors, closing windows and hatchbacks, and raising or
covering convertible tops.
Sec. 902.156. FACILITY SURFACE. A storage facility must
contain an all-weather surface such as concrete, asphalt, blacktop,
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. 902.157. 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. 902.158. FACILITY SIGNS. A repossession company shall
post a clearly visible and readable sign at the storage facility's
main entrance. The sign must:
(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,
telephone number, office hours, and license number.
Sec. 902.159. SHARING OF STORAGE FACILITY PROHIBITED. A
repossession company may not share a storage facility with another
repossession company, unless each company is owned by the same
person.
Sec. 902.160. ENTRY OF TOW TRUCKS. A repossession company
may not permit a tow truck to enter its storage facility unless the
tow truck is registered under Chapter 643, Transportation Code.
[Sections 902.161-902.200 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:
(1) commission rules regarding safety; and
(2) all other applicable local, state, and federal
rules and laws, including Subchapter E, Chapter 643, Transportation
Code, and rules adopted under that subchapter.
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 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.
Sec. 902.205. RETAIL SERVICES PROHIBITED. A repossession
agent may not sell the agent's repossession services directly to
the public.
Sec. 902.206. COLLECTION OF MONEY PROHIBITED. A
repossession agent may not accept an assignment to collect money.
[Sections 902.207-902.250 reserved for expansion]
SUBCHAPTER F. ADDITIONAL REPOSSESSION AND STORAGE REQUIREMENTS FOR
MOTOR VEHICLE DEALERS AND LENDERS
Sec. 902.251. DEFINITION. In this subchapter, "dealer"
means a person who holds a general distinguishing number issued by
the Motor Vehicle Board of the Texas Department of Transportation
under Chapter 503, Transportation Code.
Sec. 902.252. LICENSE NOT REQUIRED FOR CERTAIN
REPOSSESSIONS BY MOTOR VEHICLE DEALERS OR LENDERS. A repossession
agent who is not licensed may engage in a repossession if the person
is employed by:
(1) a lender who has received less than 20 motor
vehicles by repossession in the calendar year; or
(2) a dealer or lender, if:
(A) the person who has custody or control of the
motor vehicle agrees to the repossession;
(B) a tow truck is not used for the repossession;
and
(C) the motor vehicle moves under its own power
and meets all required safety standards.
Sec. 902.253. STORAGE OF REPOSSESSED MOTOR VEHICLE. (a) A
dealer or lender may store a motor vehicle repossessed under this
subchapter on the property of the dealer or lender.
(b) Before storing the motor vehicle, the dealer or lender
must inventory the personal property in the vehicle.
(c) A licensed repossession agent hired or employed by a
lender may store a motor vehicle on the lender's property after
engaging in a repossession for the lender.
[Sections 902.254-902.300 reserved for expansion]
SUBCHAPTER G. ENFORCEMENT
Sec. 902.301. CEASE AND DESIST ORDERS. The department may
issue a cease and desist order.
Sec. 902.302. 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. 902.303. 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. (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, 2006.
(b) The Texas Commission of Licensing and Regulation shall
adopt rules as required by Chapter 902, Occupations Code, as added
by this Act, not later than June 1, 2006.
SECTION 3. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2005.
(b) Section 902.101 and Subchapters D, E, F, and G, Chapter
902, Occupations Code, as added by this Act, take effect September
1, 2006.
* * * * *