Bill Text: CA AB183 | 2015-2016 | Regular Session | Amended
Bill Title: Financial institutions: preauthorized electronic fund transfers.
Sponsorship: Partisan Bill (Republican 1)
Status: (Failed) 2016-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB183 Detail]
Download: California-2015-AB183-Amended.html
BILL NUMBER: AB 183 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 16, 2015
INTRODUCED BY Assembly Member Waldron
JANUARY 26, 2015
An act to amend Section 96.15 of the Revenue and Taxation
Code, add Sections 4150, 4155, 4160, and 4165 to the
Financial Code, relating to local government
finance. financial institutions.
LEGISLATIVE COUNSEL'S DIGEST
AB 183, as amended, Waldron. Local government finance.
Financial institutions: preauthorized electronic fund
transfers.
Existing federal and state laws regulate certain aspects of
electronic fund transfers, including, but not limited to,
preauthorized electronic fund transfers from or to a consumer's
checking account. Existing law requires the Department of Business
Oversight to regulate various financial institutions operating within
the state, including, but not limited to, banks and credit unions.
This bill would require a financial institution subject to
oversight by the Department of Business Oversight to ensure it
complies with a specific federal regulation with regard to electronic
fund transfers. This bill would require a financial institution to
provide a specified written notice to a consumer, who approved a
preauthorized electronic fund transfer to a merchant from the
consumer's account, and would further require a merchant located in
the state that accepts preauthorized electronic fund transfers to
post the same notice on its Internet Web site, if any. This bill
would require a financial institution, upon written notification from
a consumer who terminated a preauthorized electronic fund transfer
with a merchant, within 7 business days, to take action to ensure
that the merchant no longer has the ability to withdraw funds from
the consumer's account, based upon the consumer's instructions. This
bill would prohibit a merchant from requiring payment for goods or
services in the form of a preauthorized electronic fund transfer from
a consumer's account at a financial institution, and would require a
merchant to notify a financial institution, and cease making demands
on a consumer's account, when the consumer's debt, payable by a
preauthorized electronic fund transfer, has been satisfied.
Existing law generally requires the county auditor, in each fiscal
year, to allocate property tax revenues to local jurisdictions in
accordance with specified formulas and procedures, and generally
requires that each jurisdiction be allocated an amount equal to the
total of the amount of revenue allocated to that jurisdiction in the
prior fiscal year, subject to certain modifications, and that
jurisdiction's portion of the annual tax increment, as defined.
Existing property tax law also requires a county auditor to make
certain property tax revenue allocations to "qualifying cities," as
defined, in accordance with a specified Tax Equity Allocation formula
and to make corresponding reductions in the amount of property tax
revenue that is allocated to the county. Existing law also requires
the county auditor, in the case in which a "qualifying city" becomes
the successor agency to a special district as a result of a merger
with that district as described in a specified statute, to
additionally allocate to that successor qualifying city that amount
of property tax revenue that otherwise would have been allocated to
that special district pursuant to general allocation requirements.
This bill would make a nonsubstantive change to the provision
pertaining to property tax revenue allocations to a qualifying city
that merges with a special district.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 4150 is added to the
Financial Code , to read:
4150. A financial institution subject to oversight by the
Department of Business Oversight shall ensure it complies with
Regulation E of the Federal Reserve Board (12 C.F.R. Pt. 205) with
regard to electronic fund transfers, including, but not limited to,
preauthorized electronic fund transfers from or to a consumer's
checking account.
SEC. 2. Section 4155 is added to the
Financial Code , to read:
4155. (a) A financial institution shall provide the following
written notice to a consumer who approved a preauthorized electronic
fund transfer to a merchant from the consumer's account:
If you want to stop the merchant's ability
(1) to debit your account for future
transactions, you should do all of the
following:
Contact the merchant directly and
(A) revoke your authorization to charge
your account.
Keep a copy of your notice revoking
(B) authorization to charge or obtain a
cancellation number.
Notify your financial institution that
(C) the merchant no longer has authority to
debit your account. It may be best to
provide the notification in writing.
If you revoked authorization and the
merchant continues to charge the account,
you can dispute the transactions with your
(2) financial institution. In the event of a
dispute, written proof that you had revoked
the merchant's authorization will prove
beneficial.
If you authorized your financial institution
to make the transfer to the merchant on your
behalf, you need to revoke your
authorization to make the transfer with your
(3) financial institution. Your financial
institution may require you to inform the
merchant of the revocation of authority in
advance of the financial institution taking
action.
(b) A merchant located in the state that accepts a preauthorized
electronic fund transfer from a consumer shall post the notice in
subdivision (a) on its Internet Web site, if any.
SEC. 3. Section 4160 is added to the
Financial Code , to read:
4160. (a) Upon written notification from a consumer that he or
she terminated a preauthorized electronic fund transfer from his or
her account to a merchant, a financial institution shall, within
seven business days, take action to ensure that the merchant no
longer has the ability to withdraw funds from the account, based upon
the consumer's instructions.
(b) Termination of the merchant's ability to access a consumer's
account shall come without penalty to the consumer.
(c) It is the intent of the Legislature that this section ensure
that consumers have control over their own accounts and funds that
cannot be subordinated by a third party.
SEC. 4. Section 4165 is added to the
Financial Code , to read:
4165. (a) A merchant located in the state shall not require
payment for goods or services in the form of a preauthorized
electronic fund transfer from a consumer's account at a financial
institution.
(b) A merchant located in the state shall notify a financial
institution, and shall cease to make demands on a consumer's account,
when the consumer's debt, payable by a preauthorized electronic fund
transfer, has been satisfied.
SECTION 1. Section 96.15 of the Revenue and
Taxation Code is amended to read:
96.15. (a) Notwithstanding any other provision of this chapter,
in the event a qualifying city as defined in subdivision (d) of
Section 98 or subdivision (f) of Section 98.02 becomes the successor
agency to a special district as a result of a merger described in
Section 57087.3 of the Government Code, the auditor shall allocate to
that qualifying city, in addition to any other amount of ad valorem
property tax revenue required to be allocated to that city pursuant
to this chapter, the amount of ad valorem property tax revenue that
otherwise would be allocated to that district pursuant to this
article.
(b) It is the intent of the Legislature in enacting this section
to confirm and clarify a county auditor's duty and authority,
established pursuant to subdivision (d) of Section 57087.3 of the
Government Code, to allocate to a qualifying city the ad valorem
property tax revenue of a subsidiary district that has been merged
with the city.
