BILL ANALYSIS                                                                                                                                                                                                    







                      SENATE COMMITTEE ON PUBLIC SAFETY
                             Senator Mark Leno, Chair                A
                             2009-2010 Regular Session               B

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          AB 811 (John Perez)                                         
          As Amended June 16, 2009
          Hearing date:  July 14, 2009
          Civil Code; Vehicle Code
          JM:mc

                                CHECK CASHING BUSINESS:

                     IDENTIFICATION CARDS AND RELATED DOCUMENTS  


                                       HISTORY

          Source:  Author

          Prior Legislation: AB 971 (Correa) - Ch. 17, Stats. 2004
                       AB 711 (Ackerman) - Ch. 369.  Stats. 1997
                       SB 1959 (Calderon) - Ch. 682, Stats. 1996
                       AB 465 (Peace) - Ch. 327, Stats 1993
                       AB 2400 (Peace) - Ch. 1043, Stats. 1992
                       
          Support: California Immigrant Policy Center; Consumer Federation  
          of California

          Opposition:None known

          Assembly Floor Vote:  Ayes 79 - Noes 0


                                      KEY ISSUES
           
          SHOULD A "CHECK CASHER" BE PROHIBITED FROM REQUIRING A PERSON TO  
          USE AN IDENTIFICATION CARD ISSUED BY THE CHECK CASHER?




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                                                        AB 811 (John Perez)
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          SHOULD A CHECK CASHER BE PROHIBITED FROM SELLING ANY FORM OF  
          IDENTIFICATION OTHER THAN AN IDENTIFICATION CARD FOR USE ONLY AT  
          THAT PARTICULAR BUSINESS?

          SHOULD THE PENALTY FOR MAKING A FALSE IDENTIFICATION THAT MIMICS AN  
          IDENTIFICATION ISSUED BY THE DEPARTMENT OF MOTOR VEHICLES (DMV) BE  
          INCREASED TO INCLUDE A JAIL TERM OF UP TO ONE YEAR, IN ADDITION TO A  
          MANDATORY FINE OF $1,000 AND MANDATORY COMMUNITY SERVICE OF AT LEAST  
          24 HOURS' TIME?


                                       PURPOSE

          The purposes of this bill are to 1) prohibit a "check casher"  
          from requiring a customer to use an identification card issued  
          by the check casher; 2) prohibit a check casher from selling any  
          form of identification other than a card for use only at that  
          business; and 3) provide that the penalties for making a false  
          DMV-style identification card, may include a jail term of up to  
          one year. 

          Check Cashing Businesses
           
          Existing law  defines a "check casher" as a person or entity that  
          for compensation engages, in whole or in part, in the business  
          of cashing checks, warrants, drafts, money orders, or other  
          commercial paper serving the same purpose.  "Check casher" does  
          not include a state or federally chartered bank, savings  
          association, credit union, or industrial loan company.  (Civ.  
          Code  1789.31.)

           Existing law  requires check cashers to obtain a permit from the  
          Department of Justice (DOJ). (Civ. Code  1789.37.)

           Existing law  allows a check casher to charge a fee of no more  




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                                                        AB 811 (John Perez)
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          than $10 to set up an initial account and issue an optional  
          identification card for providing check cashing services.  A  
          replacement identification card may be issued at a cost not to  
          exceed $5.  (Civ. Code  1789.35(b).)
           
          This bill  prohibits a check casher from requiring a customer to  
          purchase a check cashing identification card to access services.

           This bill  prohibits check cashers from selling any other form of  
          identification other than what is permitted to access check  
          cashing services.  



          False Identification and Related Matters
          
           Existing law  provides that any person who falsely personates  
          another person in his or her private or official capacity is  
          guilty of an alternate felony-misdemeanor.  False personation  
          generally involves subjecting the person whose identity was  
          assumed to prosecution, suit or to pay a debt.  (Pen. Code   
          529.)

           Existing law  provides that it is an alternative  
          felony-misdemeanor for a person to willfully obtain the personal  
          identifying information of another person and to use such  
          information to obtain, or attempt to obtain, credit, goods, or  
          services in the name of the other person without consent.  (Pen.  
          Code  530.5, subd. (a).)

           Existing law  defines "personal identifying information" to mean  
          name, address, mother's maiden name, place of employment, date  
          of birth, unique biometric data including fingerprint, facial  
          scan identifiers, voiceprint, retina or iris image, or other  
          unique physical representation, unique electronic data including  
          information identification number assigned to the person,  
          address or routing code, telecommunication identifying  
          information or access device, information contained in a birth  
          or death certificate, following identifying numbers:  telephone,  
          health insurance, credit card, taxpayer identification, school  




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                                                        AB 811 (John Perez)
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          identification, state or federal driver's license, state or  
          federal identification number, social security, employee  
          identification number, professional or occupational, demand  
          deposit account, savings account, checking account, PIN or  
          password, alien registration, government passport, or any form  
          of identification that is equivalent to those listed above.   
          (Pen. Code  530.55.)

           Existing law  provides that every person who, with the intent  
          to defraud, acquires or retains possession of the personal  
          identifying information of another person, and who has  
          previously been convicted of a violation of provisions  
          proscribing identity theft, or who, with the intent to  
          defraud, acquires or retains possession of the personal  
          identifying information of 10 or more other persons, shall be  
          punished by a fine, by imprisonment in a county jail not to  
          exceed one year, or by both a fine and imprisonment, or by  
          imprisonment in the state prison.  (Pen. Code  530.5, subd.  
          (b)(3).)

           Existing law  provides that any person who, with intent to  
          defraud, sells, transfers, or conveys the personal identifying  
          information of another person shall be punished by a fine, by  
          imprisonment in a county jail not to exceed one year, or by both  
          a fine and imprisonment, or by imprisonment in the state prison.  
           Further, any person who, with actual knowledge that the  
          personal identifying information of a specific person will be  
          used in violation of identity theft provisions who sells,  
          transfers, or conveys that personal identifying information  
          shall be punished by a fine or by both a fine and imprisonment,  
          or by imprisonment in the state prison.  (Pen. Code  530.5,  
          subd. (d).)

           Existing law  prohibits any person from manufacturing or selling  
          an identification document of a size and form substantially  
          similar to the identification cards or drivers' licenses issued  
          by the Department of Motor Vehicles.  A violation of these  
          provisions is a misdemeanor, punishable by a fine of $1,000, "no  
          part of which shall be suspended."  The convicted person "shall  
          [also] be required to perform not less than 24 hours of  




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          community service during hours when the person is not employed  
          and is not attending school."  (Veh. Code  13004.1 and  
          14610.1.)
           
          This bill  enhances penalties for making false DMV-style  
          identification cards (in the form of a DMV identification card  
          or driver's license) to include a jail term of up to one year,  
          in addition to the mandatory penalties in current law of a  
          $1,000 fine and 24 hours of community service.  The bill  
          specifies that no part of the community service may be suspended  
          or waived.  
          
                    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.<1>

          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  
               ----------------------
          <1>  "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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               overcrowded, however measured, and whether considered  
               in comparison to prisons in other states or jails  
               within this state.  There are simply too many  
               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  




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               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  
               prison population to 120% or 145% of the prison's  
               design capacity (or somewhere in between) within a  
               period of two or three years.<2>

          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's office:

               Check cashers regularly sell identification cards so  
               that customers may be able to access services.  This  
               practice is necessary if a customer has no other form  
               of identification, but some check cashing facilities  
               do coerce or compel people into purchasing  
               identification cards.  These check cashing facilities  
               target non-English proficient people and advertise the  
               sale of identification cards to this vulnerable  
               population.  There are even cases where they advertise  
               the sale of identification that they claim is a valid  
               California Identification Card or California Drivers  
               License.  Since these facilities target non-English  
               proficient people, the consumers are misled into  
               ----------------------
          <2>  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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                                                        AB 811 (John Perez)
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               purchasing fraudulent identification.  This bill  
               removes any ambiguity in law by not permitting check  
               cashers to sell anything other than an optional  
               identification card intended to access service.

          2.  Previous Legislation in 2007 Increased Fines for Manufacturing  
            or Selling False Identification Cards that are Similar to DMV  
            Identification  Cards and Driver's Licenses.

           AB 1658 (Sharon Runner) Chapter 743, Statutes of 2007, increased  
          the mandatory fine for manufacturing false identification and  
          licenses from $500 to $1,000.  The bill also required a  
          convicted defendant to perform 24 hours of community service  
          while the violator is not employed or attending school.  

          3.  Background on Regulation of Check Cashing Businesses  

          California established the Check Casher Permit Program in 1995.   
          Check cashers are regulated by the Department of Justice (DOJ).   
          Check cashers, for a fee, cash checks, warrants, money orders or  
          similar commercial paper.  The owner of a check cashing business  
          must obtain a permit from the DOJ.  A check cashing business  
          must post for clear public viewing a complete, detailed and  
          unambiguous schedule of all fees for cashing checks, drafts,  
          money orders or other commercial paper and for the initial  
          issuance of any identification card.  Customers must also be  
          able to clearly view a posted list of valid identification that  
          is acceptable in lieu of identification issued by the check  
          casher.  The check casher law does not apply to state and  
          federally chartered banks, savings associations, credit unions  
          and industrial loan companies.  Also excluded are retail stores  
          that may incidentally charge a fee not exceeding $2 to cash  
          checks or money orders as a service to customers.

          Many customers of check cashing businesses do not have bank  
          accounts or drivers' licenses.  To address this situation, check  
          cashers may distribute identification cards to customers.  An  
          identification check casher includes a photograph, name,  
          address, sex, hair, eye color, height, weight, date of birth,  
          date issued, signature and right thumbprint.  The addition of a  




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          social security number is optional.   

          It appears that one of the concerns presented or addressed by  
          this bill is that check cashers could issue identification cards  
          that recipients could attempt to use for a variety of purposes,  
          unrelated to cashing checks or at the check cashing business.   
          The bill is drafted in terms of selling identification cards  
          other than cards for use at the check cashing business.  If the  
          author's intent is to prevent the use of check casher  
          identification cards for purposes other than for cashing checks,  
          the bill should also prohibit a check casher from "providing"  
          such forms of identification.

          SHOULD THE BILL STATE THAT A CHECK CASHER SHALL NOT SELL OR  
          PROVIDE ANY IDENTIFICATION CARD OTHER THAN IDENTIFICATION TO BE  
          USED AT THAT PARTICULAR BUSINESS?





          4.  Court Discretion to Sentence a Defendant Convicted of Making  
            or Selling a False DMV-Style Identification to up to a Year in  
            Jail, in Addition to Mandatory Community Service and a Full  
            and Mandatory $1,000 Fine  

          The New Penalty Provision in the Bill
          
          Existing law requires a court to order a defendant to perform at  
          least 24 hours of community service and to pay a full and  
          mandatory fine of $1,000 for making a DMV-style false  
          identification.  This bill, in what is perhaps a redundant  
          provision, specifies that the court cannot stay any part of the  
          community service order.  This bill also allows the court to  
          impose a jail term of up to one year, in addition to the  
          community service order.








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          Community Service Generally
          
          Allowing a court to impose a jail term in addition to community  
          service appears to be a novel penalty for a misdemeanor.   
          Typically, community service is ordered as an alternative to a  
          jail term.  Community service is generally considered to be a  
          rehabilitative and restorative program.  For example, an  
          underage person who purchased alcohol, or a person who provided  
          alcohol to an underage person, shall be ordered to perform  
          community service.  This community service should be served in  
          an alcohol or drug treatment program or the coroner's office.   
          (Bus. & Prof. Code  25658, subd. (e)(1).)  Clearly, such  
          service is designed to teach a defendant about the very serious  
          dangers of alcohol use, including addiction and fatalities.  The  
          court can only impose a jail term on a defendant if he or she  
          provided alcohol to an underage person and the underage person  
          seriously injured or killed another person or the underage  
          person.  The jail penalty provision does not include a community  
          service option for the court.  (Bus. & Prof. Code  25658, subd.  
          (e)(3).)

          The restitution provisions in Penal Code Section 1202.4 direct a  
          court to consider a community service order in an extraodinary  
          case where the defendant cannot afford to pay restitution.  The  
          court, in granting probation to a minor who possessed etching  
          cream for the purpose of committing vandalism shall consider a  
          community service order as a condition of probation.  (Pen. Code  
           594.1, subd. (e).)  A minor who purchases or possesses tobacco  
          shall be ordered to pay a fine of $75 or perform 30 hours of  
          community service. (Pen.  Code  308l, subd. (b).) On the other  
          hand, the sentencing court may order a grafitti defeNdant to  
          serve a jail term and to perform community service, buT only if  
          it is not feasible for the defendant to clean up the graffiti.  
          (Pen. Code  594, subd. (c).)  

          Suggestion to Include a Jail Term in a Series of Graduated  
          Sanctions
          
          Perhaps the bill should describe or prescribe graduated  




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          sanctions, depending on the seriousness of the crime and other  
          relevant factors.  1)  The court could order a defendant to pay  
          the mandatory fine and perform the community service, with no  
          other penalty.  2) The court could place the defendant on  
          probation, and order the defendant to pay the fine and perform  
          community service as a condition of probation.  3)  If the  
          defendant fails to perform satisfactorily on probation, the  
          court may order additional community service, or impose a jail  
          term.

          IN A CONVICTION FOR MAKING OR SELLING A FALSE DMV IDENTIFICATION  
          OR LICENSE, SHOULD THE APPLICABLE PENALTIES INCLUDE A  
          COMBINATION OF MANDATORY COMMUNITY SERVICE, A MANDATORY $1,000  
          FINE AND A JAIL TERM?

          SHOULD THE BILL PROVIDE THAT A JAIL TERM COULD BE IMPOSED IN  
          LIEU OF COMMUNITY SERVICE, PARTICULARLY WHERE THE DEFENDANT  
          FAILED TO PERFORM COMMUNITY SERVICE AS A CONDITION OF PROBATION?

          5.  Identity Theft Issues as Concerns False DMV-Style  
          Identification Documents  

          Sections 3 and 4 of this bill increase the penalties for the  
          misdemeanor of making or selling a false identification document  
          that is in the form of a DMV identification card or driver's  
          license.  Existing law also includes crimes for possessing or  
          transferring the personal identifying information of another  
          with intent to defraud or with actual knowledge that the  
          information would be used to commit identity theft.

          Identity theft crimes can be committed through the use of false  
          DMV-style identification cards or documents.  While the identity  
          theft crimes include an intent or knowledge element not included  
          in the false DMV document crime amended by this bill, a  
          defendant could argue that he or she can only be prosecuted for  
          the false DMV document offense if the card contains or reflects  
          the personal identifying information of another.  Such an  
          argument would be made under the legal principle that when a  
          general statute and a specific statute cover the same conduct,  
          the more specific statute controls.  (1 Witkin & Epstein (3d Ed.  












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          2000) Intro. to Crimes,  59-61.)  It is thus suggested that  
          the bill be amended to include a provision that a person can be  
          prosecuted under the false DMV document statute or any other  
          provision of law.  
      
          SHOULD THE BILL INCLUDE A PROVISION THAT A DEFENDANT WHO  
          VIOLATES THE PROHIBITION ON MAKING OR SELLING A DMV-STYLE  
          IDENTIFICATION OR DRIVER'S LICENSE MAY BE PROSECUTED UNDER ANY  
          OTHER PROVISION OF LAW?


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