BILL ANALYSIS
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Mark Leno, Chair A
2009-2010 Regular Session B
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AB 158 (Mendoza)
As Introduced January 27, 2009
Hearing date: June 9, 2009
Business & Professions Code
SM:mc
PAWNBROKERS AND COIN DEALERS:
IDENTIFICATION OFFERED BY PROPERTY PLEDGOR
HISTORY
Source: The Collateral Loan & Secondhand Dealers Association
Prior Legislation: AB 264 (Mendoza) - 2008, vetoed
SB 1520 (Schiff) - Ch. 994, Stats. 2000
Support: Western Loan & Jewelry; over 70 private citizens
Opposition:None known
Assembly Floor Vote: Ayes 76 - Noes 0
KEY ISSUE
SHOULD SECONDHAND DEALERS, INCLUDING PAWNBROKERS AND COIN DEALERS,
BE AUTHORIZED TO RELY ON VALID FORMS OF GOVERNMENT IDENTIFICATION
THAT DO NOT CONTAIN OR REQUIRE A SIGNATURE, AS SPECIFIED?
(More)
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PURPOSE
The purpose of this bill is to allow pawnbrokers and coin
dealers, as specified, to accept valid government identification
cards or documents, such as a military identification card or a
U.S. visa issued to a Mexican citizen, if the identification
document is designed to not include a signature.
Existing law includes a statement of legislative intent to
curtail the dissemination of stolen property and to facilitate
the recovery of stolen property by means of a uniform,
statewide, state-administered program of regulation of persons
whose principal business is dealing in such property. (Bus. &
Prof. Code 21625.)
Existing law defines a "secondhand dealer" as any person or
entity taking in pawn, accepting for sale of consignment,
trading, etc., any tangible personal property. (Bus. & Prof.
Code 21625.)
Existing law defines a pawnbroker<1> as a "person engaged in the
business of receiving goods in pledge for security for a loan."
(Fin. Code 21000.)
Existing law defines a "coin dealer" a person or entity "whose
principal business is the buying, selling, and trading of coins,
monetized bullion, or commercial grade ingots of gold, or
silver, or other precious metals." (Bus. & Prof. Code 21626,
subd. (b).)
Existing law includes a statement of legislative intent to
require the uniform statewide reporting of transactions in and
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<1> For purposes of this analysis, the terms pawnbroker and
secondhand dealer are used interchangeably. Secondhand dealers
also handle property for consignment sale and resale.
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acquisitions of secondhand and pawned property by pawnbrokers
and secondhand dealers. (Bus. & Prof. Code 21625; Fin. Code
21051.)
Existing law provides that pawnbrokers and coin dealers shall
report daily on forms approved or provided by the Department of
Justice, all personal property purchased, taken in trade, taken
in pawn, etc., to local law enforcement. The report shall
include the following information:
the name and current address and identification of the
intended seller or pledgor of the property;
a complete and reasonably accurate description of
serialized or nonserialized property;
a certification by the intended seller or pledgor that
he or she is the owner of the property, or has the
authority of the owner to sell or pledge the property and
that any information provided is true and complete; and
a legible fingerprint taken from the intended seller or
pledgor. (Bus. & Prof. Code 21628.)
Existing law provides the following concerning the
identification that must be offered by a pledgor of property in
pawn or seller of property:
The identification provided by the pledgor shall include
a photograph, a description or both, and a signature.
The identification shall be verified by the person
taking the property.
The following forms of identification are acceptable:
o U.S. passport;
o driver's license issued by any state or
Canada;
o identification card issued by any state;
o identification card issued by the United
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States; and
o passport from any other county, in addition to
another form of identification bearing an address.
This bill provides that a pawnbroker or coin dealer shall
require a property pledgor to provide an identification that
includes a signature, where applicable.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
California continues to face a severe prison overcrowding
crisis. The Department of Corrections and Rehabilitation (CDCR)
currently has about 170,000 inmates under its jurisdiction. Due
to a lack of traditional housing space available, the department
houses roughly 15,000 inmates in gyms and dayrooms.
California's prison population has increased by 125% (an average
of 4% annually) over the past 20 years, growing from 76,000
inmates to 171,000 inmates, far outpacing the state's population
growth rate for the age cohort with the highest risk of
incarceration.<2>
In December of 2006 plaintiffs in two federal lawsuits against
CDCR sought a court-ordered limit on the prison population
pursuant to the federal Prison Litigation Reform Act. On
February 9, 2009, the three-judge federal court panel issued a
tentative ruling that included the following conclusions with
respect to overcrowding:
No party contests that California's prisons are
overcrowded, however measured, and whether considered
in comparison to prisons in other states or jails
within this state. There are simply too many
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<2> "Between 1987 and 2007, California's population of ages 15
through 44 - the age cohort with the highest risk for
incarceration - grew by an average of less than 1% annually,
which is a pace much slower than the growth in prison
admissions." (2009-2010 Budget Analysis Series, Judicial and
Criminal Justice, Legislative Analyst's Office (January 30,
2009).)
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prisoners for the existing capacity. The Governor,
the principal defendant, declared a state of emergency
in 2006 because of the "severe overcrowding" in
California's prisons, which has caused "substantial
risk to the health and safety of the men and women who
work inside these prisons and the inmates housed in
them." . . . A state appellate court upheld the
Governor's proclamation, holding that the evidence
supported the existence of conditions of "extreme
peril to the safety of persons and property."
(citation omitted) The Governor's declaration of the
state of emergency remains in effect to this day.
. . . the evidence is compelling that there is no
relief other than a prisoner release order that will
remedy the unconstitutional prison conditions.
. . .
Although the evidence may be less than perfectly
clear, it appears to the Court that in order to
alleviate the constitutional violations California's
inmate population must be reduced to at most 120% to
145% of design capacity, with some institutions or
clinical programs at or below 100%. We caution the
parties, however, that these are not firm figures and
that the Court reserves the right - until its final
ruling - to determine that a higher or lower figure is
appropriate in general or in particular types of
facilities.
. . .
Under the PLRA, any prisoner release order that we
issue will be narrowly drawn, extend no further than
necessary to correct the violation of constitutional
rights, and be the least intrusive means necessary to
correct the violation of those rights. For this
reason, it is our present intention to adopt an order
requiring the State to develop a plan to reduce the
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prison population to 120% or 145% of the prison's
design capacity (or somewhere in between) within a
period of two or three years.<3>
The final outcome of the panel's tentative decision, as well as
any appeal that may be in response to the panel's final
decision, is unknown at the time of this writing.
This bill does not appear to aggravate the prison overcrowding
crisis outlined above.
COMMENTS
1. Need for This Bill
According to the author:
California statute is specific as to which forms of
identification may be used for a pawnbroker or
secondhand dealer transaction in California.
Pawnbrokers and secondhand dealers are legally
required to have one or more forms of identification
'that bears a signature', yet the stated form of
identification may not now require a signature. By
adding the phrase 'where applicable' referring to the
signature, if the acceptable form of identification no
longer requires it, the signature does not have to be
obtained. Adding this language will permit a pawnshop
to utilize new and emerging forms of 'biometric'
identification cards while preserving the reliability
of the identification of the pledger.
2. Background: Identification Documents Increasingly Use
Embedded Electronic Data and Do not Include Signatures
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<3> Three Judge Court Tentative Ruling, Coleman v.
Schwarzenegger, Plata v. Schwarzenegger, in the United States
District Courts for the Eastern District of California and the
Northern District of California United States District Court
composed of three judges pursuant to Section 2284, Title 28
United States Code (Feb. 9, 2009).
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With the emergence of new technologies, new security measures
have been incorporated into existing forms of identification and
new forms of identification have been developed. No standard
format has emerged; but laser strips, embedded chips, encoded
information tabs, and other methods are used by various
governments and entities. Some identification documents that
formerly included the signature of the bearer no longer do due
to the advanced technology contained in or on the piece of
identification.
The federal government and many state governments have
eliminated signatures on some forms of identity cards as they
move towards "bio- chip" forms of identification security. For
example, Flag Clear cards help certain passengers (military,
government officials) bypass search areas at airports. These
cards have a host of biological information embedded into the
cards that describe the carrier, including: height, weight,
retina scans, and fingerprints, but no signature.
The Illegal Immigration Reform and Immigrant Responsibility Act
of 1996 (IIRIRA) required regulations governing the issuance and
use of border crossing identification cards (BCCs). Pursuant to
the IIRIRA, as of October 1, 2002, all Mexican nationals are
required upon entry into the US to show a BCC that contained in
an imbedded microchip containing biometric information such as
the cardholder's fingerprints, retina scan, as well as the
standard identification data such as a physical description.
To provide military personnel with a combination of counterfeit
resistant, identification and access cards, the US Department of
Defense (DOD) began issuing "Common Access Cards" (CAC) in lieu
of the active military identification cards. Common access
cards contain an imbedded microchip containing biometric
identification, including a digitized signature of the
cardholder. The military intends to issue CACs to all
personnel. As of June 15, 2006, over 10 million had been issued
to active duty military personnel. A DOD official explained
that "[t]he information stored on the card allows you to prove
you are the person you say you are. When you conduct business
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on the Internet, for example, people can give you access to
their systems and they'll know that it's you that is actually
logging on, not some other person that happens to have your
password."
As the federal government adopts new forms of identification,
the federally regulated lending institutions and banks will be
changing their standards for identification verification.
However, pawnbrokers regulated by the State of California will
have outdated standards of identification effectively limiting
their ability to do business.
ARE IDENTIFICATION CARDS THAT INCLUDE A SIGNATURE OF THE BEARER
OFTEN BEING REPLACED BY CARDS THAT INCLUDE EMBEDDED BIOMETRIC
INFORMATION, BUT NO SIGNATURE?
SHOULD THE STATUTE THAT REQUIRES A PAWNBROKER TO ONLY ACCEPT
FORMS OF IDENTIFICATION THAT INCLUDE A SIGNATURE BE AMENDED TO
PROVIDE THAT A SIGNATURE IS ONLY REQUIRED WHERE APPLICABLE?
3. Same as Measure Approved Last Year
This bill is identical to AB 264 (Mendoza) of 2008, which passed
this Committee unanimously. It was enrolled but vetoed by the
Governor. The Governor's veto message stated:
The historic delay in passing the 2008-2009 State
Budget has forced me to prioritize the bills sent to
my desk at the end of the year's legislative session.
Given the delay, I am only signing bills that are the
highest priority for California. This bill does not
meet that standard and I cannot sign it at this time.
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