BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      AB 1182


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          ASSEMBLY THIRD READING


          AB  
          1182 (Santiago)


          As Amended  May 5, 2015


          Majority vote


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          |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         |                    |
          |                |      |                    |                    |
          |                |      |                    |                    |








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          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))









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             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.









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          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  








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          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  








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          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  








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          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



















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