BILL ANALYSIS Ó AB 1182 Page 1 ASSEMBLY THIRD READING AB 1182 (Santiago) As Amended May 5, 2015 Majority vote ----------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+--------------------+--------------------| |Business & |14-0 |Bonilla, Jones, | | |Professions | |Baker, Bloom, | | | | |Burke, Chang, Dodd, | | | | |Eggman, Gatto, | | | | |Holden, Mullin, | | | | |Ting, Wilk, Wood | | | | | | | |----------------+------+--------------------+--------------------| |Appropriations |17-0 |Gomez, Bigelow, | | | | |Bonta, Calderon, | | | | |Chang, Daly, | | | | |Eggman, Gallagher, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | |Gordon, Holden, | | | | |Jones, Quirk, | | | | |Rendon, Wagner, | | | | |Weber, Wood | | | | | | | | | | | | AB 1182 Page 2 ----------------------------------------------------------------- SUMMARY: Narrows the current definition of tangible personal property, as specified, and requires the Department of Justice (DOJ) to annually update the list of items which represent a significant class of stolen goods and post it on its Web site. Specifically, this bill: 1) Narrows the definition of "tangible personal property" to mean only those elements listed in current law. 2) Requires the DOJ, to update its list annually of personal property commonly sold by secondhand dealers which is statistically found through crime reports to constitute a significant class of stolen goods and post the list on the DOJ's website. EXISTING LAW: 1)Defines a "secondhand dealer" as any person, co-partnership, firm, or corporation whose business includes buying, selling, trading, taking in pawn, accepting for sale on consignment, accepting for auctioning, or auctioning secondhand tangible personal property and specifies that a "secondhand dealer" does not include a coin dealer or participant at gun shows or events, as specified. (Business and Professions Code (BPC) Section 21626 (a)) 2)States that "tangible personal property" includes, but is not limited to, all secondhand tangible personal property which bears a serial number or personalized initials or inscription, or which at the time it is acquired by the secondhand dealer, bears evidence of having had a serial number or personalized initials or inscription. (BPC Section 21627(a)) 3)States that tangible personal property also includes, but is not limited to, the following: (BPC Section 21627(b)) AB 1182 Page 3 a) All tangible personal property, new or used, including motor vehicles, received in pledge as security for a loan by a pawnbroker; b) All tangible personal property that bears a serial number or personalized initials or inscription which is purchased by a secondhand dealer or a pawnbroker or which, at the time of such purchase, bears evidence of having had a serial number or personalized initials or inscription; and, c) All personal property commonly sold by secondhand dealers which statistically is found through crime reports to the DOJ to constitute a significant class of stolen goods. A list of such personal property shall be supplied by the DOJ to all local law enforcement agencies. The list shall be reviewed periodically by the DOJ to insure that it addresses current problems with stolen goods. 4)Specifies that "tangible personal property" does not include coins, monetized bullion, or commercial grade ingots of gold, silver, or other precious metals, as specified. (BPC Section 21627(d)) 5)Requires every secondhand dealer or coin dealer, as specified to report daily, or on the first working day after receipt or purchase of secondhand tangible personal property, on forms or through an electronic reporting system approved by the DOJ, all secondhand tangible personal property, except for firearms, which he or she has purchased, taken in trade, taken in pawn, accepted for sale on consignment, or accepted for auctioning, to the chief of police or to the sheriff, as specified. (BPC Section 21628) FISCAL EFFECT: According to the Assembly Appropriations Committee, minor and absorbable cost to DOJ to update its list and post it on the DOJ Web site. AB 1182 Page 4 COMMENTS: Purpose. This bill is sponsored by the California Association of Resellers, ReUsers and Buyers. According to the author, "? with the passage of AB 391[(Pan) Chapter, 172, Statutes of 2012], secondhand dealers (who do not sell serialized goods or goods which are statistically found through crime reports to the [DOJ] to constitute a significant class of stolen goods to be licensed as a secondhand dealer) will now need to take the name and current address of the intended seller of the property, take the identification of the intended seller or pledger and a legible fingerprint from the intended seller, to report daily, and to retain for 30 days all tangible personal property reported. "As outlined, California law imposes all of the above-mentioned regulatory requirements on every secondhand dealer, regardless of how large the number of identical items or how low the value of each item bought and sold. As written, separate individual reports will need to be made for every used book, every old doorknob, every piece of colored glass, every old name badge or game piece (amongst thousands of other items) sold within the State of California. There is also no consideration made for items that have been gathered over the past several decades for which re-sellers would be unable to locate the initial owners (for purposes of gaining their information, fingerprints, and identification)? With this in mind, [this bill] seeks to clarify existing law, provide law enforcement useful data they need in order to curtail the dissemination of stolen property and to facilitate the recovery of such property, and remove an unnecessary burden on secondhand dealers." Background. This bill seeks to revise the definition of "tangible personal property" by narrowing the list of items which are considered to be "tangible personal property." By narrowing the list of items considered "tangible personal property," this bill AB 1182 Page 5 will limit the category of secondhand items that need to be reported to local law enforcement on a daily basis. Currently, "tangible personal property" is defined as the items referenced in BPC Section 21627(b), but current law does not restrict the definition to only those items listed. This bill will revise the definition by specifying that "tangible personal property" only includes the items that are listed under BPC 21627(b), such as items that bear a serial number and all personal property commonly sold by secondhand dealers which are found through crime reports to the DOJ that constitute a significant class of stolen goods. This bill does not alter the reporting requirements for secondhand dealers if they acquire an item that would meet the revised definition of tangible person property. According to the DOJ, the regulation of secondhand dealers occurred as a result of legislation in 1980 in an effort to provide law enforcement agencies with a means to curtail the selling of stolen property and to facilitate its recovery by means of a uniform statewide, state-administered secondhand dealer licensing and reporting program. Secondhand Dealers. A secondhand dealer includes a person, business or corporation whose main purpose is to buy, sell, trade, take in pawn, accept for sale on consignment, or accept for auction, secondhand tangible personal property. Current law specifically exempts certain individuals from the definition of a secondhand dealer, including coin dealers, certain auctioneers and certain appliance repair persons. Secondhand Dealer Transactions and Reporting Requirements. Traditional secondhand dealer transactions typically take place through face-to-face encounters where applicable state and local laws can apply, such as California's 30-day hold requirement. Under current law, secondhand dealers are required to report daily or on the first working day after the receipt or purchase of secondhand personal property on forms or through the electronic database (once completely functional), all of the secondhand tangible personal property which has been purchased, taken in AB 1182 Page 6 trade, taken in pawn, or accepted for sale or consignment. Because the electronic database is not currently available, the reports of tangible personal property items are currently required to be submitted directly to local law enforcement. As noted by the author, because the definition of personal tangible property is so broad, the secondhand dealers feel compelled to report all secondhand transition items, even those which may be of minor material value such as door knobs, used books or old game pieces. DOJ List. The intent of narrowing the definition of "tangible personal property" is to limit the number of secondhand transactions that must be reported by secondhand dealers to those which are of significance for crime tracking purposes. As noted, the definition of "tangible personal property" includes all personal property that bears a serial number or personalized initials or inscription and those items found on a list compiled by the DOJ. Currently, BPC Section 21627(3) requires the DOJ to provide its list of personal property which statistically is found through crime reports to constitute a significant class of stolen goods to local law enforcement. Depending on the size, type, and number of items reported on the list as determined by the DOJ, it could significantly expand or reduce those items which are considered "tangible personal property." Currently, there are only two items on the DOJ's Secondhand Dealer Report including: jewelry and sterling silverware. This limited list means that the definition of "tangible personal property" will only include those two items along with anything that has a serial number. According to the author, the Federal Bureau of Investigation provides a list of stolen goods which contains an expansive list of items including tangible goods such as handbags, pelts or skins for apparel purposes, and bikes. It is unclear how often or the last time DOJ updated its list of items found through crime reports to be statistically significant. However, this bill will require the DOJ to update its list annually which depending on the process for obtaining the necessary data for its list could expand AB 1182 Page 7 or reduce those items that need to be reported annually. Attorney General Opinion. The current definition of "tangible personal property" is seen as being too broad. Because the definition states items, "including, but not limited to," it provides for a wide interpretation of what must be included in any secondhand transaction - it could potentially include anything. Because of the reporting requirements, it is necessary for secondhand dealers to understand what is included under the definition of "tangible personal property." For instance, in 1996, an Attorney General opinion was requested to determine whether or not baseball trading cards constitute "tangible personal property". According to the opinion, "Baseball trading cards purchased by a card shop do not constitute tangible personal property for purposes of regulation under the Secondhand Goods Law" (79 Ops.Cal.Atty.Gen. 103). Given the broad definition of "tangible personal property" there may be other items which fall into the potential category of "tangible personal property," but without a formal DOJ opinion, secondhand dealers must operate as if all property is required to be reported. Analysis Prepared by: Elissa Silva / B. & P. / (916) 319-3301 FN: 0000532 AB 1182 Page 8