BILL ANALYSIS SENATE COMMITTEE ON JUDICIARY A David Roberti, Chairman B 1993-94 Regular Session 3 1 4 AB 3148 (Katz) 8 As amended August 8, 1994 Hearing date: August 9, 1994 Vehicle Code LGK:rn VEHICLE FORFEITURE HISTORY Source: Author Prior Legislation: SB 310 (1989) - Chaptered AB 3962 (1986) - Chaptered Support: See Comment 12 for lengthy list of supporters Opposition: California State Automobile Association; Automobile Club of Southern California; American Civil Liberties Union; Solano County Taxpayers Association; Forfeiture Endangers American Rights, California; Right Way L.A.W., Northern California Division; individuals Assembly Floor vote: Ayes 42 - Noes 25 KEY ISSUE SHOULD A PROCEDURE BE ESTABLISHED FOR IMPOUNDMENT AND FORFEITURE OF šMOTOR VEHICLES WHEN THE OPERATOR HAS A SUSPENDED OR REVOKED šDRIVER'S LICENSE? PURPOSE Existing law makes it a misdemeanor for a person to operate a motor švehicle if the person's driver's license has been suspended or šrevoked for specified causes, and that person has knowledge of the (More) AB 3148 (Katz) Page 2 suspension or revocation. The person is presumed to have knowledge šof the suspension or revocation if the Department of Motor Vehicles šhas given notice to the person. The penalty for a first conviction šis imprisonment in the county jail for not less than five days or šmore than six months and by a fine of not less then $300 or more šthan $1,000. The penalty for a second offense within five years of ša prior conviction is imprisonment for not less than 10 days or šmore than one year and by a fine of not less than $500 or more than š$2,000. At least 10 days must be served for a repeat offender who šis granted probation. (Vehicle Code Section 14601). Existing law authorizes impoundment of a vehicle if the driver is šconvicted of specified offenses, including driving with a suspended šor revoked driver's license. The court may order the vehicle šimpounded for a period of not more than six months for a first šconviction and not more than 12 months for a second or subsequent šconviction. (Vehicle Code Section 14602). Existing law authorizes the forfeiture of a vehicle owned by a šperson convicted of vehicular manslaughter or repeat drunk driving šoffenses and authorizes the sale of such vehicle after forfeiture. šExisting law also authorizes forfeiture of a vehicle after šconviction of murder, manslaughter, attempted murder, assault with ša deadly weapon, or the unlawful discharge or brandishing of a šfirearm from or at an occupied vehicle where the victim was šattacked from or in a vehicle by the use of a firearm on a public šstreet or highway. This bill would enact the Safe Streets Act of 1994. It would šrequire the impoundment of a vehicle operated by a driver with a šsuspended or revoked driver's license or who is unlicensed, and šwould subject the vehicle to forfeiture if the driver cannot šprovide satisfactory proof of licensure in a prescribed manner. šThe bill would establish extensive procedures, conditions and šenforcement responsibilities related to the impoundment and šforfeiture provisions. Specifically, the bill: 1. Provides that when a vehicle is stopped by a peace officer for ša traffic violation, and the driver is unable to produce a valid šlicense, the vehicle will be impounded. However, if the peace šofficer is able to verify that the driver is properly licensed but šdoes not have the license in possession, the vehicle will not be šimpounded. Peace officers may exercise discretion and not impound šemployer-owned vehicles driven by employees in the course of šemployment if the vehicle can be returned to the employer; this šsame exception applies to other similar situations, including a švehicle's relinquishment for servicing or parking purposes. (More) AB 3148 (Katz) Page 3 2. Prohibits peace officers from stopping a vehicle for the sole šreason of determining whether the driver is properly licensed. 3. Authorizes vehicles to be redeemed within 72 hours (three šworking days) of impoundment if the person who was the driver at šthe time of impoundment is able to present a valid driver's license što the impounding police agency. In these cases, the impounded švehicle will be released upon payment of any towing and storage šcharges if the vehicle registration is current. The bill allows vehicle owners to request a post-storage hearing šconducted by the impounding agency to determine the validity of the šimpoundment and requires the impounding agency to pay towing and šstorage fees in the event a vehicle was improperly impounded. If there is a community property interest in the vehicle, and the švehicle is the only one available to the driver's family, it will šbe released to a registered owner when proof of the community šproperty interest is shown, the driver is properly licensed, the švehicle is properly registered, and all towing, storage, and šadministrative charges are paid. 4. In the case of an unlicensed driver who is not the owner of the švehicle, the vehicle will be released to the owner after payment of štowing and storage fees. 5. Provides that vehicles not redeemed within 72 hours after šimpoundment are subject to civil forfeiture, regardless of šownership, according to the following process: a. Within five days of impoundment, the impounding agency obtains from DMV the names and addresses of all legal and registered owners of the impounded vehicle and transmits that information to the district attorney. b. Within 10 days of impoundment, the district attorney notifies all owners of record of the proposed forfeiture by certified mail, return receipt requested. The notice includes instructions for filing a claim and obtaining a court hearing and all applicable time limits. c. Within 15 days of mailing the notice, if no claim is presented by an owner, the district attorney prepares a written declaration of forfeiture and the impounding agency may sell the forfeited vehicle. d. If a claim is presented by an owner, a court hearing is held to determine the validity of the forfeiture. The hearing is conducted as any other civil matter, but the burden of proof is on the prosecuting agency. The court š (More) AB 3148 (Katz) Page 4 either orders the vehicle released or forfeited. A š forfeiture judgment does not require conviction of the š offense which made the vehicle subject to forfeiture, or š of the offense which gave rise to the initial stop by the š peace officer. e. When the registered owner of the vehicle is not the person who was driving without a valid license, the vehicle must be returned if a claim is made. However, if the registered owner does not file a timely claim, the vehicle is forfeited. f. Once a vehicle has been forfeited, it is sold. A legal owner who conducts repossession sales may conduct the sale or the sale is via a public auction. Vehicles may be destroyed or donated to a charitable institution if they are low value or not salable. 6. Requires proceeds from a sale to be used to satisfy costs in šthe following priority: towing and storage costs, governmental and šjudicial costs, indebtedness owed to legal owners as of the date of šsale, and amounts owed to verified subordinate lienholders and šcommunity property interests of a person other than a registered šowner. Any remaining proceeds are divided between the state and šthe affected local agency. The state's potential proceeds are deposited in the Vehicle šInspection and Repair Fund to provide funding for the low income šsmog repair assistance and buyback program created by SB 198 (Kopp, šChapter 28, Statutes of 1994). Local agencies are authorized to šuse a portion of their potential proceeds for a reward fund leading što the arrest and conviction of hit and run drivers. 7. Provides that a vehicle that is reported as stolen is exempt šfrom the forfeiture provisions and may be claimed at any time after šimpoundment, with the concurrence of the impounding agency and šdistrict attorney. 8. Requires the DMV to notify all persons by certified mail, šreturn receipt requested, when a license is suspended or revoked, šand requires the DMV to use process servers for personal service in šcertain cases if the certified mail is not delivered. The bill šmakes knowledge of suspension or revocation a conclusive špresumption under those circumstances. The DMV's costs are to be covered by license reissue fees šauthorized by existing law. The bill requires the DMV to publicize šthe Safe Streets Act when mailing driver's license and vehicle šregistration renewal notices, as well as with suspension and šrevocation notices. (More) AB 3148 (Katz) Page 5 9. Requires drivers with suspended or revoked driver's licenses to šsurrender their licenses within 15 days of the effective date of a šlicense action. Failure to return the license within the 15 day šperiod would constitute a misdemeanor. Additionally, persons who šdo not surrender licenses are subject to a reinstatement fee, which šcan be waived if the person acknowledges a suspension/revocation šand offers a reasonable explanation for not surrendering the šlicense. 10. Makes it a misdemeanor to accumulate a driving record history šwhile the driving privilege has been suspended or revoked. 11. Allows any vehicle owner who suffers any loss due to šimpoundment or forfeiture to recover the amount of the loss from šthe responsible party. 12. Finds and declares that it is the public policy of the state šthat no insurance policy may afford towing and storage benefits šthat would alleviate the financial loss to an owner of a vehicle šwhen that vehicle has been impounded or forfeited pursuant to the šbill. 13. Exempts motorcycle operators who have a valid driver's license šbut are not certified to operate a motorcycle or motorbike. 14. Exempts rental car companies. 15. Makes the provisions relating to the notice requirements by and što the DMV to become operative June 30, 1995. The purpose of this bill is to dissuade unlicensed drivers from šusing motor vehicles. COMMENT 1. Expressed purpose of the bill The intent of this bill is to curtail the driving of persons who are not licensed or who have had their licenses rescinded for driving violations. According to the author, the bill aims to accomplish this by making suspension and revocation notices more effective, by placing vehicle owners at risk of vehicle forfeiture and by the actual act of forfeiture. The author notes that civil forfeiture is an in rem proceeding that relates to the illegal use of property, rather than the illegal act of a person. Statutes may authorize forfeiture of property used illegally, as in the case of a vehicle driven on š (More) AB 3148 (Katz) Page 6 the public highway by an unlicensed driver. Existing šCalifornia law already authorizes vehicle forfeiture in a šlimited number of nuisance cases (Vehicle Code Section 23198). 2. Extent of the problem According to the DMV, as many as 1 in 10 motorists, or up to 2,000,000 persons, drive in this state without a license. Unlicensed drivers are reported as having five times as many accidents and 11 times as many drunk driving convictions as licensed drivers. Although unlicensed driving is a misdemeanor for which a person is required to be jailed and whose vehicle may be impounded by the court, the DMV and law enforcement agencies indicate that a large majority of persons with suspended or revoked licenses continue to drive. 3. Declaration of legislative intent This bill codifies the following statement of legislative intent: (a) Driving a motor vehicle on the public streets and š highways is a privilege, not a right. (b) Of all drivers involved in fatal accidents, more than 20 š percent are not licensed to drive. A driver with a suspended license is four times as likely to be involved in a fatal accident as a properly licensed driver. (c) At any given time, it is estimated by the Department of š Motor Vehicles that of some 20 million driver's licenses issued to Californians, 720,000 are suspended or revoked. Furthermore, 1,000,000 persons are estimated to be driving without ever having been licensed at all. (d) Over 4,000 persons are killed in traffic accidents in š California annually, and another 330,000 persons suffer injuries. (e) Californians who comply with the law are frequently š victims of traffic accidents caused by unlicensed drivers. These innocent victims suffer considerable pain and property loss at the hands of people who flaunt the law. The Department of Motor Vehicles estimates that 75 percent of all drivers whose driving privilege has been withdrawn continue to drive regardless of the law. (f) It is necessary and appropriate to take additional steps š to prevent unlicensed drivers from driving, including the civil forfeiture of vehicles used by unlicensed drivers. The state has a critical interest in enforcing its š (More) AB 3148 (Katz) Page 7 traffic laws and in keeping unlicensed drivers from š illegally driving. Seizing the vehicles used by š unlicensed drivers serves a significant governmental and š public interest, namely the protection of the health, š safety, and welfare of Californians from the harm of š unlicensed drivers, who are involved in a š disproportionate number of traffic incidents, and the š avoidance of the associated destruction and damage to š lives and property. (g) The Safe Streets Act of 1994 is consistent with the due š process requirements of the United States Constitution and the holding of the Supreme Court of the United States in Calero-Toledo v. Pearson Yacht Leasing Co., 40 L. Ed. 2d 452. This committee has generally preferred that statements of legislative intent be uncodified. SHOULD NOT THIS BE DONE? 4. New requirement: failure to return license This bill would require the DMV to include a demand for surrender of the driver's license within 15 days of the effective date of the suspension or revocation. It would also provide that mailing of the notice, return receipt requested, is a conclusive presumption of actual notice, when the return receipt has been signed and returned to the department. Failure to return the license within the allotted time would not be an infraction; however, driving after that time would result in impoundment or forfeiture of the vehicle. The bill would provide an alternative method of personal service when the return receipt is not returned to the department, but personal service would not result in a conclusive presumption of notice. 5. Impoundment procedure When a driver is unable to produce a valid driver's license and the peace officer is not reasonably able to verify that the driver is properly licensed, the officer must cause the vehicle to be impounded, regardless of ownership, unless (a) the driver's license had expired with 30 days and was otherwise renewable, or (b) the driver is an employee of a business and driving in the course of employment or is driving the vehicle solely for the purpose of parking or servicing it. In the š (More) AB 3148 (Katz) Page 8 latter case, the officer has the discretion to have the vehicle šimpounded. SHOULD NOT THE OFFICER BE PROHIBITED FROM IMPOUNDING THE VEHICLE IN THOSE CIRCUMSTANCES? A driver may obtain release of the vehicle within three days of impoundment if he or she presents a valid license to the impounding agency. In order to obtain the vehicle, the registered owner must sign a "stipulated vehicle release agreement" that provides for the automatic forfeiture of any vehicle registered to him or her if the vehicle is driven by a driver with a suspended or revoked license, or by an unlicensed driver. This provision would apply to any vehicle currently owned or any vehicle registered to the driver for the next seven years. SHOULD NOT THE BILL BE LIMITED TO THE VEHICLE IN QUESTION OR TO VEHICLES CURRENTLY OWNED? If the registered owner does not sign the "stipulated vehicle release agreement", the vehicle is forfeited. IS THIS AN UNCONSCIONABLE CONTRACT? Notice to the registered owner must be sent within two days of impoundment or personally served on the owner. Any claim to the vehicle must be filed within 5 days of personal service or 15 days of mailed notice or the vehicle will be forfeited. SHOULD NOT THERE BE AN EXEMPTION FOR EXCUSABLE NEGLECT OR DELAY? If a claim is timely filed, the district attorney must file a petition of forfeiture in any case within 10 days of receipt of the claim. The owner need not be informed of the court date. A claimant must pay a $50 court fee, which is reimbursed if the claimant prevails. The civil and criminal cases are "heard at the same time in an expedited, consolidated proceeding." The burden of proof is on the prosecuting agency by a preponderance of the evidence. SHOULD NOT A CRIMINAL CONVICTION BE REQUIRED BEFORE THE VEHICLE IS FORFEITED? (More) AB 3148 (Katz) Page 9 The proceeds of the sale of a forfeited vehicle are disposed of in the following priority: (1) To satisfy the towing and storage costs following impoundment, the costs of providing notice pursuant to subdivision (e), the costs of sale, and the unfunded costs of judicial proceedings, if any. (2) To the legal owner in an amount to satisfy the š indebtedness owed to the legal owner remaining as of the date of sale, including accrued interest or finance charges and delinquency charges, providing that the principal indebtedness was incurred prior to the date of impoundment. (3) To the holder of any subordinate lien or encumbrance on š the vehicle, other than a registered or legal owner, to satisfy any indebtedness so secured if written notification of demand is received before distribution of the proceeds is completed. The holder of a subordinate lien or encumbrance, if requested, shall furnish reasonable proof of its interest and, unless it does so upon request, is not entitled to distribution pursuant to this paragraph. (4) To any other person, other than a registered or legal š owner, who can reasonably establish an interest in the vehicle, including a community property interest, to the extent of his or her provable interest, if written notification is received before distribution of the proceeds is completed. (5) Of the remaining proceeds, funds shall be made available š to pay any local agency and court costs, that are reasonably related to the implementation of this section, that remain unsatisfied. (6) Of the remaining proceeds, half shall be transferred to š the Controller for deposit in the Vehicle Inspection and Repair Fund for the high-polluter repair assistance and removal program created by Article 9 (commencing with Section 44090) of Chapter 5 of Part 5 of Division 26 of the Health and Safety Code, and half shall be transferred to the general fund of the city or county of the impounding agency, or the city or county where the impoundment occurred. A portion of the local funds may be used to establish a reward fund for persons coming forward with information leading to the arrest and conviction of hit and run drivers and to publicize the availability of the reward fund. (More) AB 3148 (Katz) Page 10 There is no limitation on the costs provided in paragraph (1), above. The unlicensed driver is responsible for all losses due to the impoundment or forfeiture. In the case of an owner who leaves his or her vehicle with a business, the business is responsible for all losses without recourse to any insurance policy. IS THIS PROVISION UNFAIR TO BUSINESSES? An administrative hearing may be requested, to be conducted by the impounding agency. 6. Insurance provision The bill prohibits insurability of losses directly or indirectly due to impoundment or forfeiture: The Legislature finds and declares it to be the public policy of this state that no policy of insurance shall afford towing and storage benefits that would alleviate the financial loss to an owner of a vehicle when that vehicle has been impounded or forfeited pursuant to this section. SHOULD NOT INNOCENT OWNERS BE AFFORDED INSURANCE PROTECTION? 7. Proportionality Forfeiture is considered a useful tool when other means of obtaining compliance with the law are unavailable. Forfeiture is used in drug transaction cases, organized crime actions, and in a limited way from specified violent crimes committed with firearms from vehicles. Vehicle forfeiture is currently provided for repeat drunk driving offenders. There is little doubt that the provisions of this bill would reduce the incidence of unlicensed drivers on our streets, and they may pose a public safety problem, but they do not appear to cause the same danger to the public safety as to the groups specified above. ARE THE SEVERE PENALTIES IMPOSED BY THIS BILL PROPORTIONAL TO THE CRIME CHARGED? ARE THE PENALTIES PROPORTIONAL TO THE PENALTIES FOR OTHER, RELATED CRIMES? As noted above, incarceration of five days to six months and a fine of $300 to $1,000 is required for a first offense of driving with a suspended license. The penalty increases to 10 (More) AB 3148 (Katz) Page 11 days to one year and $500 to $2000 for repeat convictions. In šaddition, the person's vehicle may be impounded up to six šmonths for a first offense and up to one year for a subsequent šoffense. ARE NOT EXISTING PENALTIES SUFFICIENT? The statement of legislative intent in this bill declares that the Legislature finds this bill to be consistent with the holding of Calero-Toledo, supra. According to the official summary by the Clerk of the Supreme Court, the Court held that "the lessor was not unconstitutionally deprived of its property without just compensation even though the lessor was in no way involved in the criminal enterprise carried on by one of the lessees and had no knowledge that its property was used by this lessee in violation of the law! and of the lease agreement." (Id. at š 452-453). IS THIS THE POLICY WHICH THE LEGISLATURE WISHES TO ESTABLISH IN FORFEITURE ACTIONS? 8. Additional concerns Opponents have expressed other, more global concerns about the bill. They include: * Convictions are required before vehicles may be forfeited under existing Vehicle Code provisions authorizing forfeiture for repeat drunk drivers, drive-by shooters, and others. Shouldn't convictions be required before forfeiture for driving with a suspended or revoked license? * If the purpose of the bill is to reduce accidents caused by habitual drunk drivers and other groups who cause a high percentage of accidents, shouldn't the bill be limited to those groups and not to unlicensed drivers with no accident history? * The costs associated with impoundment may run into the hundreds of dollars and may exceed the cost of the vehicle. * There is no limit on what tow companies and storage facilities can charge. Does this bill create a windfall for those groups? (More) AB 3148 (Katz) Page 12 * Should the impoundment hearing be conducted by the impounding agency when that agency stands to benefit from the sale proceeds of forfeited vehicles? The Legislature generally frowns on bounty provisions. * Does the bill imperil the co-owner of a vehicle when the law-abiding party is unable to control the driving behavior of the other owner? * The bill would require that the department publicize the new impoundment and forfeiture provisions. However, while parts of the bill do not become operative until June 30, 1995, the impoundment and forfeiture provisions become operative January 1, 1995. Shouldn't all provisions of this bill be delayed until June 30, 1995? SHOULD NOT THESE CONCERNS BE ADDRESSED? 9. Specific concerns of Auto Clubs The California State Automobile Association and Automobile Club of Southern California continue to be opposed to the August 8, 1994, amended version of the bill for the following reasons: * Existing penalties, including incarceration and fine are adequate and may be under-utilized by the courts. Programs using existing law, such as the Santa Rosa Traffic Offender Program (STOP), are effective. * The community property exemption is inadequate and should reflect the language found in current law and other pending legislation. In addition, the community owner should not have to sign the agreement for future forfeiture, as this bill requires. * There was some discussion at the July 5 hearing of requiring two convictions for driving with a suspended or revoked license before a vehicle may be forfeited. The amended bill does not require any conviction. * It is unfair that the bill exempts drivers other than Class C drivers who do not have the requisite licensing. * It is unfair that innocent owners are not to be afforded insurance coverage for their towed vehicles. (More) AB 3148 (Katz) Page 13 10. Other programs An Oregon statute, ORS 809.700 (1993) provides for impoundment for up to 120 days, but not forfeiture, of a vehicle for driving with a suspended license or on a repeat violation of drunk driving. Impoundment requires a conviction. If the owner is not the driver, the vehicle may be impounded only if the owner knew or had good reason to know that the convicted person was not licensed or was drunk. The Santa Rosa Police Department's Traffic Offender Program uses education and intensive enforcement to stop unlicensed/suspended/revoked drivers. Begun in mid-1993, the program aggressively seeks misdemeanor convictions of unlicensed drivers. It appears to be successful in reducing the number of target offenders. THESE PROGRAMS APPEAR TO BE HAVE BEEN SUCCESSFUL. SHOULD NOT THEY BE TRIED BEFORE FORFEITURE IS ENACTED? 11. Related legislation SB 1758 (Kopp) also addresses the unlicensed driver problem and was approved by this Committee earlier this year. That bill would increase penalties for specified instances of unlawful driving and would permit impoundment of vehicles used by unlicensed drivers for 30 days. The bill was amended and passed by the Assembly Transportation Committee June 27 and is pending before the Assembly Ways & Means Committee. IS THE SB 1758 APPROACH AN ADEQUATE MEANS TO DETER DRIVING WITH A SUSPENDED LICENSE? 12. Support Letters of support have been received from the following: 7 Sheriffs; 65 Police departments; Advocates for Auto and Highway Safety; Agents and Brokers Legislative Council; Alameda County Police Chiefs and Sheriffs Association; American College of Emergency Physicians, California Chapter; Association for Los Angeles Deputy Sheriffs (ALADS); Association of California Insurance Companies (ACIC); California Association of Highway Patrolmen; California Paralyzed Veterans Association; California Peace Officers Association (CPOA); California Professional Firefighters; Citizens for Reliable and Safe Highways (CRASH); City of Barstow; City of Los Angeles; City of Santa Rosa; City of South Gate; Disabled American Veterans, Van Nuys Chapter; Emergency Nurses Association, California State Council; Gray Panthers of Berkeley; Institute for Injury š AB 3148 (Katz) Page 14 Reduction; Los Angeles Police Protective League; Mothers Against Drunk Driving, California; Municipal Court, South Orange County Judicial District; National Council of Negro Women, San Fernando Valley Section; National Highway Transportation Safety Administration (NHTSA); National Traffic Safety Institute; North East Valley Residents Association; Planning and Conservation League; Police Chiefs Association of San Mateo County; El Proyecto del Barrio; Sacramento Kings/ARCO Arena; San Bernardino County Police Chiefs and Sheriff Association; San Francisco Injury Center For Research and Prevention; Santa Clara Valley Medical Center; Southern California Injury Prevention Research Center; Studio City Chamber of Commerce; Sunland-Tujunga Association of Residents; Superior Court of Los Angeles County, Van Nuys; Train Riders' Association of California; United Chambers of Commerce, San Fernando Valley; Valley Industry and Commerce Association (VICA); Van Nuys Homeowners Association; individuals. *********