BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1182|
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                                   THIRD READING 


          Bill No:  AB 1182
          Author:   Santiago (D), et al.
          Amended:  8/18/15 in Senate
          Vote:     21  

           SENATE PUBLIC SAFETY COMMITTEE:  6-1, 7/14/15
           AYES:  Hancock, Anderson, Leno, Liu, Monning, Stone
           NOES:  Glazer

          SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  79-0, 6/1/15 - See last page for vote

           SUBJECT:   Secondhand goods:  tangible personal property


          SOURCE:    California Association of Resellers, Reusers and  
          Buyers 
          
          DIGEST:  This bill defines items that constitute a significant  
          class of stolen goods that secondhand dealers must report to law  
          enforcement upon acquisition and requires the Attorney General  
          to annually update and post on her website the list of property  
          that secondhand dealers must report. 

          ANALYSIS: 
          
          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  








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             personal property and specifies that a "secondhand dealer"  
             does not include a coin dealer or participant at gun shows or  
             events, as specified.  (Bus. and Prof. Code § 21626, subd.  
             (a).)


           2) Specifies that "secondhand dealers" do not include persons  
             who perform the services of an auctioneer for a fee or salary  
             or persons whose business is limited to the reconditioning  
             and selling of major household appliances, as long as  
             specified conditions are met.  (Bus. and Prof. Code §  
             21626.5.)

           3) 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.  (Bus. and  
             Prof. Code § 21627, subd. (a).)

           4) States that tangible personal property also includes, but is  
             not limited to, the following:  

              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.   
                (Bus. and Prof. Code §  21627, subd. (b).)

           5) Specifies that "tangible personal property" does not include  
             any new goods or merchandise purchased from a bona fide  







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             manufacturer, distributor, or wholesaler of such new goods or  
             merchandise by a secondhand dealer, and requires a secondhand  
             dealer to retain for one year from the date of purchase, and  
             make available for inspection by any law enforcement officer,  
             any receipt, invoice, bill of sale or other evidence of  
             purchase of such new goods or merchandise.  (Bus. and Prof.  
             Code §  21627, subd. (c))

           6) Specifies that "tangible personal property" does not include  
             coins, monetized bullion, or commercial grade ingots of gold,  
             silver, or other precious metals, as specified.  (Bus. and  
             Prof. Code § 21627, subd. (d).)

           7) Requires every secondhand dealer or coin dealer, as defined,  
             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  
             Department of Justice (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.  (Bus. and Prof. Code  
             §  21628)

           8) Requires the report to be legible, prepared in English,  
             completed where applicable, and include, but not be limited  
             to, the following information:  (Bus. and Prof. Code §   
             21628)

              a)    The name and current address of the intended seller or  
                pledger of the property; 
              b)    The identification of the intended seller or pledger,  
                as specified; 
              c)    A complete and reasonably accurate description of  
                serialized property, including, but not limited to: serial  
                number and other identifying marks or symbols,  
                owner-applied numbers, manufacturer's named brand, and  
                model name or number;
              d)    A complete and reasonably accurate description of  
                non-serialized property, including, but not limited to:  
                size, color, material, manufacturer's pattern name (when  
                known), owner-applied numbers and personalized  
                inscriptions, and other identifying marks or symbols;
              e)    A certification by the intended seller or pledger that  







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                he or she is the owner of the property or has the  
                authority of the owner to sell or pledge the property.
              f)    A certification by the intended seller or pledger that  
                to his or her knowledge and belief the information is true  
                and complete;
              g)    A legible fingerprint taken from the intended seller  
                or pledger, as specified; and,
              h)    When a secondhand dealer complies with all of the  
                provisions of this section, he or she shall be deemed to  
                have received from the seller or pledger adequate evidence  
                of authority to sell or pledge the property, as specified.  


           9) Requires the DOJ, in consultation with appropriate local law  
             enforcement agencies, to develop clear and comprehensive  
             descriptive categories denoting tangible personal property,  
             as specified.  (Bus. and Prof. Code § 21628, subd. (j).)

           10)Requires the DOJ to develop a single, statewide, uniform,  
             electronic reporting system to be used to transmit required  
             secondhand dealer reports, as specified.  (Bus. and Prof.  
             Code §  21628, subd. (j)(1).)

           11)Requires secondhand and coin dealers to hold for a period of  
             30 days any tangible personal property acquired before  
             disposing of the property.  Pawnbrokers must wait for a  
             period of four months before disposing of tangible personal  
             property that is acquired.  For purposes of this Section,  
             tangible personal property means property that must be  
             reported to law enforcement upon acquisition by the reporting  
             entity or party.    (Bus. and Prof. Code § 21636.)

          This bill:

          1)Eliminates the statutory provision stating that the definition  
            of tangible personal property is not limited to the  
            specifically listed or enumerated property.

          2)Defines "tangible personal property" to mean only the forms of  
            property specifically listed or enumerated in current law:  
            serialized property, property with personalized initials or  
            inscriptions, property that bears evidence of previously  
            having a serial number, initials or inscription, and all  
            personal property that the Attorney General statistically  







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            determines through the "Crime in California Report" to  
            constitute a statistically significant class of stolen goods.

          3)Defines "a statistically significant class of stolen goods" as  
            those items found to constitute more than 10% of property  
            reported as stolen in the annual "Crime in California" report.

          4)Requires the Attorney General to annually update its list of  
            personal property commonly sold by secondhand dealers that  
            constitutes a statistically significant class of stolen goods  
            and post the list on the Attorney General's website.

          5)Specifies that a secondhand goods dealer need only verify and  
            record the identity of the person selling property once per  
            transaction, not as to each item sold in a transaction,  
            although each item obtained by the dealer must be reported. 

          Background
          
          In 2012, AB 391 (Pan) established a new requirement that  
          secondhand dealers and pawnbrokers electronically report to the  
          DOJ all secondhand tangible property which has been purchased,  
          taken in trade, taken in pawn, accepted for sale on consignment  
          or accepted for auctioning.  Licensed secondhand dealers and  
          pawnbrokers use must the new system - the California Automated  
          Pawn and Secondhand Dealer System (CAPPS) - to do so.  

          A March 19, 2015 letter from DOJ to pawnbrokers and secondhand  
          dealers stated:

             [DOJ] was mandated pursuant to Assembly Bill 391 (Stats   
             2012, Ch. 172, Pan) to develop and implement a statewide,  
             uniform electronic reporting system that would allow for  
             the electronic reporting of property transaction reports   
             ?The initial California Pawn and Secondhand Dealer System  
             (CAPSS)? was implemented by the DOJ in December 2014.   
             ?DOJ and its contractor have been working diligently on  
             phase-in improvements [and] ?announces [that] these  
             improvements are nearing readiness. ?A few of CAPPS  
             capabilities include an auto registration component,  
             multiple property transaction bulk upload, and an  
             advanced licensing application for law enforcement  [to]  
             ?streamline the licensing process.  








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          The utilization of the electronic database is not intended to  
          change the kinds of property that must be reported by secondhand  
          dealers. Nevertheless, the CAPSS Website includes an Excel table  
          with a code number for reporting each of over 800 items, from  
          accordions to zithers.  The list includes bee hives, beer kegs,  
          defibrillators, ladders, pavers, parking meters, pottery wheels,  
          roller blades, shocks, tillers, timing light, toilets and wheel  
          chairs.  Clearly this does not constitute the list of items that  
          must be reported by secondhand dealers.  However, it does appear  
          that under the CAPSS system any kind of property that becomes  
          commonly stolen could be readily reported.  

          Arguably, the optimal list of reportable goods would include  
          readily reportable and identifiable property that can be matched  
          against police reports of stolen goods.  An overly broad  
          reporting requirement could be onerous for secondhand dealers,  
          yet produce data that is mostly of no value to law enforcement.   
          An overly broad requirement could reduce compliance,  
          paradoxically reducing reports of recoverable stolen property.  

          The only kinds of property the secondhand goods reporting  
          statute specifically describes are serialized and initialed  
          property.  The statute also requires secondhand dealers to  
          report property "commonly sold by secondhand dealers which  
          statistically is found through crime reports to the Attorney  
          General to constitute a significant class of stolen goods."  The  
          statute directs the Attorney General to update the list  
          periodically.  The current list has not been updated for some  
          time and includes only jewelry and sterling silver.

          DOJ is required by statute to collect data from law enforcement  
          agencies about "the amount and types of offenses known to the  
          public authorities."  DOJ has great latitude as to how data must  
          be reported.   DOJ can direct law enforcement agencies to  
          include in reports the kinds of property stolen in theft,  
          burglary and robbery offenses.  (Pen. Code §§ 13000, 13002 and  
          13020 

          As noted above, the governing statute requires DOJ to  
          statistically determine property constituting a "significant  
          class of stolen goods" commonly sold by secondhand dealers.  The  
          statute does not define "significant."   The statute also does  
          not provide how DOJ is to determine which property is "commonly  
          sold by secondhand dealers."  The bill was amended in Senate  







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          Public Safety to provide that "significant" be defined as  
          property constituting 10% of the kinds of property reported  
          stolen as determined by and through the "Crime in California"  
          report published annually by DOJ and to delete the reference to  
          goods commonly sold by secondhand dealers.  The CAPPS electronic  
          reporting system will provide consistency in the form and  
          analysis of reporting.  Arguably, the requirements for the  
          contents of the reports should be similarly consistent if the  
          full benefits of the electronic system in finding stolen  
          property and prosecuting thieves are to be realized.

          The sponsor has noted that secondhand dealers often obtain goods  
          in sets or matched collections. This is especially true for  
          purchases of property from an estate sale.  The dealer may buy a  
          set of furniture, china or other combined goods.  In such cases,  
          the dealer should be allowed to obtain a single identification  
          and fingerprint of the seller, not a separate identification and  
          print for each item.  This bill specifically authorizes  
          secondhand dealers to verify the identity of the seller once per  
          transaction.   

          The Court of Appeal, Third Appellate District, recently  
          considered whether a secondhand dealer or pawnbroker must comply  
          with a local ordinance requiring reporting of property that need  
          not be reported under state law.  The court held that a  
          Sacramento County ordinance imposing additional reporting  
          requirements was preempted by state law.  (Collateral Loan and  
          Secondhand Dealers Association v. County Of Sacramento (2014)  
          223 Cal.App.4th 1032, 1042-1043.)

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          SUPPORT:   (Verified 8/26/15)


          California Association of Resellers, Reusers and Buyers (source)
          Antiques by the Bay
          Californians Against Waste
          City of Alameda
          Home Consignment Center
          Sacramento Antique Faire








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          OPPOSITION:   (Verified 8/26/15)


          California Police Chiefs Association
          California State Sheriffs' Association
          Secondhand Collectors Association (unless amended)



          ASSEMBLY FLOOR:  79-0, 6/1/15
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,  
            Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia,  
            Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,  
            Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,  
            Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Beth Gaines

          Prepared by:Jerome McGuire / PUB. S. / 
          8/26/15 14:40:38


                                          


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