Amended in Senate April 15, 2013

Senate BillNo. 762


Introduced by Senator Hill

February 22, 2013


An act to amendbegin delete Sections 21646 and 21647 of, and to add Section 21645.1 to,end deletebegin insert Section 21647 ofend insert the Business and Professions Code, to amend Section 21206.8 of the Financial Code, and to amend Sectionsbegin delete 1411end deletebegin insert 186.2, 186.8, 1411,end insert and 11108.5 of the Penal Code, relating to secondhand goods, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 762, as amended, Hill. Secondhand goodsbegin insert: lost, stolen, or embezzled itemsend insert.

(1) Existing law provides for the regulation of secondhand dealers, as defined, and makes it unlawful for a person to engage in the business of a secondhand dealer without a license issued by the chief of police, the sheriff, or, where appropriate, the police commission. Existing law makes it a crime, punishable by specified fines or imprisonment, or both, if a person knowingly violates the provisions regulating secondhand dealers. Existing law authorizes the district attorney or the Attorney General to bring an action to enjoin a violation or threatened violation of the provisions regulating secondhand dealers.

begin insert

This bill would make operating a secondhand business without being licensed a “criminal profiteering activity” and would include the unlicensed operation of a secondhand dealer without reporting acquisitions as required by existing law within the definition of “organized crime.”

end insert
begin insert

(2) Existing law, the California Control of Profits of Organized Crime Act, defines criminal profiteering as any act committed or attempted, or any threat made for financial gain or advantage, that may be charged as a crime under specified provisions. Under existing law, property and assets acquired or received in exchange for the proceeds immediately derived from the pattern of criminal profiteering activity are subject to forfeit. The money proceeds from that forfeiture are distributed as prescribed.

end insert
begin insert

This bill would prescribe that funds derived from a forfeiture of lost, stolen, or embezzled items seized from a pawnbroker or secondhand dealer be distributed 45% to initiating law enforcement agency, 45% to prosecuting attorney’s office, and 10% to the Restitution Fund, a continuously appropriated fund, thereby making an appropriation.

end insert
begin delete

This bill would require a person conducting business as a secondhand dealer to provide a valid secondhand dealer license to any peace officer upon demand. Under specified circumstances, the bill would also authorize a peace officer to impound all secondhand tangible personal property, as defined, or currency up to $25,000 found in the possession or control of the person if a secondhand dealer license is not provided to the peace officer and the peace officer has probable cause to believe the property or currency was acquired while the person was operating as a secondhand dealer without being licensed, except as specified. The bill would require the imposition of storage charges for secondhand tangible personal property impounded pursuant to these provisions, would authorize the property or currency to be stored up to 90 days, and would set forth requirements for the redemption, or the forfeiture or sale, of the impounded property or currency. The bill would require an impounding agency to satisfy specified requirements regarding impounded property or currency that has not been redeemed and would require the district attorney or city attorney to follow specified procedures relative to forfeiture and claims to the property or currency. The bill would establish a $100 fee for asserting a claim to the impounded property or currency that is subject to forfeiture, would require the fee to be reimbursed to a prevailing claimant, and would, if a claimant does not prevail, require the fee to be distributed between the district attorney or city attorney filing the action and the Trial Court Trust Fund. The proceeds of any sale or forfeiture under the bill would also be disbursed in a specified manner, including, of any remaining proceeds, 10% to the Restitution Fund, a continuously appropriated fund, thereby making an appropriation.

end delete
begin delete

The bill would also authorize a nonprofit association composed of 50 or more licensed secondhand dealers to bring an action to enjoin a person from conducting business as a secondhand dealer without being licensed and would authorize an association that prevails in such an action to be awarded reasonable attorney’s fees and costs of suit, as specified.

end delete
begin delete

(2)

end delete

begin insert(3)end insert Existing law authorizes a peace officer to place a hold on property in possession of a pawnbroker, secondhand dealer, or coin dealer if the peace officer has probable cause to believe that property is stolen, as specified, and regulates the manner in which the property is placed on hold, persons claiming the property are notified, and disputes arising out of claims for the property are adjudicated, as provided.

This bill would revise these provisions to, among other things,begin delete requireend deletebegin insert authorizeend insert a peace officer tobegin insert alsoend insert place a hold onbegin delete stolen property,end deletebegin insert property that the officer has probable cause to believe is lost or embezzled or to seize the property,end insert as specified, limit the provisions to licensed pawnbrokers and secondhand dealers, revise notification procedures regardingbegin delete lost orend deletebegin insert lost,end insert stolenbegin insert, or embezzledend insert property, and require a person claiming ownership ofbegin delete allegedly stolen or embezzledend deletebegin insert theend insert property to file a written statement, signed under penalty of perjury, stating the factual basis upon which they claim ownership or an interest in the property.begin insert This bill would require law enforcement to return seized property at the conclusion of the criminal proceedings. This bill would also authorize the issuance of a search warrant in specified circumstances, including where the property is being concealed by a pawnbroker who is the subject of a criminal investigation or if a pawnbroker or secondhand dealer refuses to honor the hold upon request of a peace officer.end insert

begin delete

(3)

end delete

begin insert(4)end insert Because a knowing violation of the bill’s provisions by a person engaging in the business of a secondhand dealer would be a crime, and because the bill would expand the crime of perjury, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin delete
P4    1

SECTION 1.  

Section 21645.1 is added to the Business and
2Professions Code
, to read:

3

21645.1.  

(a) The Legislature hereby finds and declares that
4an effective means of punishing and deterring the unlicensed
5practice of dealing in secondhand tangible personal property,
6including, but not limited to, gold jewelry, platinum jewelry, and
7sterling silver, and to further effectuate the legislative intent of
8Section 21625, is through the forfeiture of property acquired and
9accumulated by a person who is required to be licensed pursuant
10to this article but is found to be in violation of Section 21640. The
11provisions of this section are intended to be in addition to the
12penalty provisions of Section 21645.

13(b) A person conducting business as a secondhand dealer, as
14defined in Section 21626, shall provide a valid license issued under
15this article to any peace officer upon demand.

16(c) (1) If a person, after being convicted of operating an
17unlicensed secondhand business at any time within the preceding
18five years or after being issued a written warning within the
19preceding 12 months that the business must be licensed under this
20article, is found buying secondhand tangible personal property
21from the public and is unable to provide a valid secondhand dealer
22license issued under this article on the demand of a peace officer
23as required by subdivision (b), the peace officer may impound all
24secondhand tangible personal property and any currency in an
25amount not to exceed twenty-five thousand dollars ($25,000) found
26in the possession or under the control of the person if, upon
27examination, the peace officer has probable cause to believe the
28secondhand tangible personal property or currency was acquired
29while the person was operating as a secondhand dealer without
30being licensed, unless the peace officer is reasonably able, by other
31means, to verify that the person was properly licensed at the time
32the person acquired the secondhand tangible personal property or
33currency.

34(2) A peace officer shall not impound the secondhand tangible
35personal property or any currency pursuant to this subdivision if
36there is credible evidence establishing all of the following:

37(A) The person conducting business as a secondhand dealer
38provides documentation indicating that he or she held a valid
P5    1secondhand dealer license for that location at any time within the
2preceding 90 days, unless the license was terminated by the issuing
3agency and the person was provided notice of termination.

4(B) The person required to be licensed pursuant to this article
5recorded and reported the acquisition of secondhand tangible
6personal property pursuant to Section 21628.

7(3) A peace officer may exercise discretion with respect to
8impoundment under this subdivision if the person can establish
9that he or she is an employee of a person required to be licensed
10under this article, the employer is not present, and the person
11conducting business as a secondhand dealer does not have
12management or control of, or a financial interest in, the business
13for which a secondhand dealer license is required under this article.

14(4) A peace officer shall serve the person from whom
15secondhand tangible personal property or currency is taken
16pursuant to this subdivision with a notice specifying the
17requirements set forth in subdivision (d), the right of the
18impounding agency to sell the secondhand tangible personal
19property and forfeit the currency if the requirements of subdivision
20(d) are not met within the statutory time, and the right of the person
21from whom the secondhand tangible personal property or currency
22is taken to challenge any sale or forfeiture following service of the
23notice of forfeiture required under subdivision (g). Within five
24days after the impoundment, the peace officer shall also serve on
25the person from whom the secondhand tangible personal property
26or currency is taken, and any secured creditor, a notice advising
27those parties that they are entitled to a postimpoundment hearing
28before the impounding agency within 30 days after the service of
29the postimpoundment hearing notice. A person from whom
30secondhand tangible personal property or currency is taken may
31challenge the results of the postimpoundment hearing in the
32appropriate court.

33(d) Any secondhand tangible personal property or currency
34impounded pursuant to subdivision (c) shall be stored for a period
35not exceeding 90 days by the impounding officer, and shall be
36 available to be redeemed when both of the following conditions
37have been satisfied:

38(1) The person from whom the secondhand tangible personal
39property or currency was taken has obtained or otherwise produced
P6    1a valid secondhand dealer license for the business as required under
2this article.

3(2) The reports of acquisition of secondhand tangible personal
4property as required by Section 21628 have been completed for
5all of the secondhand tangible personal property that was
6impounded.

7(e) Storage charges shall be imposed for the secondhand tangible
8personal property impounded under this section in accordance with
9Section 21200.6 of the Financial Code.

10(f) If after 60 days from the date of the impoundment the person
11from whom the secondhand tangible personal property or currency
12was taken has failed to satisfy the requirements of subdivision (d),
13the impounding agency shall do all of the following:

14(1) If the name of the seller, seller’s identification, and
15description of the secondhand tangible personal property is known,
16the agency shall prepare the report of acquisition of secondhand
17tangible personal property for all impounded property as required
18by Section 21628 or verify that the report was duly transmitted to
19the Department of Justice.

20(2) Notify the district attorney or city attorney of the
21impoundment and request a notice of forfeiture.

22(g) The district attorney or city attorney shall serve on the person
23from whom the secondhand tangible personal property or currency
24was taken and on any secured creditor a notice of forfeiture for all
25or part of the secondhand tangible personal property or currency.
26The notice shall be issued by registered mail on or after the 65th
27day following the impoundment. The notice shall state that the
28person served with the notice of forfeiture has 15 calendar days
29from the date of the mailing of the notice to file a claim. A secured
30creditor located outside the State of California shall be allowed an
31additional five days to file a claim. The notice shall identify the
32name and address of the district attorney or city attorney who is
33authorized to prosecute the forfeiture action and to receive
34objections. If no claim has been received after service of the notice
35of forfeiture, the impounding agency may sell the secondhand
36tangible personal property to the highest bidder at a noticed, public
37sale.

38(h) If the district attorney or city attorney issuing the notice of
39forfeiture does not receive a claim within the time limit provided
40in subdivision (g), the district attorney or city attorney shall sign
P7    1and record with the county recorder a notice of forfeiture. A written
2declaration of forfeiture by the district attorney or city attorney
3shall be deemed to provide good and sufficient title to the forfeited
4property or currency. Any property or currency impounded but
5not forfeited shall be returned to the person from whom it was
6taken within 90 days of the impoundment.

7(i) (1) If the district attorney or city attorney receives a timely
8claim, the district attorney or city attorney shall file a petition for
9forfeiture within 10 days of receiving the claim with the appropriate
10court hearing any criminal action brought under Section 21640 or
1121645. The district attorney or city attorney shall establish an
12expedited hearing date in accordance with instructions from the
13court and the court shall hear the matter without delay. A fee of
14one hundred dollars ($100) shall be paid by any claimant but shall
15 be reimbursed by the impounding agency if the claimant prevails.
16To the extent practicable, the civil and criminal cases, if a criminal
17complaint is filed against the person who is accused of operating
18as an unlicensed secondhand dealer, shall be heard at the same
19time in an expedited, consolidated proceeding. A proceeding in
20the civil case is a limited civil case.

21(2) The fee shall be distributed equally between the district
22attorney or city attorney filing the action and the Trial Court Trust
23Fund.

24(3) The burden of proof in the civil case shall be on the person
25from whom the secondhand tangible personal property or currency
26was taken to prove by a preponderance of the evidence that the
27secondhand tangible personal property or currency has been
28acquired when the person from whom it was seized was properly
29licensed under this article and that the acquisition of the
30secondhand tangible personal property or currency was duly
31reported pursuant to Section 21628. All questions that may arise
32shall be decided and all other proceedings shall be conducted as
33in an ordinary civil action.

34(4) A judgment of forfeiture does not require as a condition
35precedent the conviction of a defendant of an offense under this
36article.

37(5) The filing of a claim within the time limit specified in
38subdivision (g) is a jurisdictional prerequisite for the availing of
39the action authorized by that subdivision.

P8    1(j) All right, title, and interest in the secondhand tangible
2personal property or currency shall vest in the impounding agency
3upon commission of the act giving rise to the forfeiture. However,
4the secondhand tangible personal property or currency shall not
5be subject to forfeiture or sale until all court challenges are
6resolved.

7(k) Any secondhand tangible personal property that is not
8redeemed pursuant to subdivision (d) and is subsequently forfeited
9pursuant to a notice of forfeiture or a judgment of forfeiture shall
10be sold to the highest bidder at a noticed, public sale. The notice
11shall be published in a local paper of general jurisdiction nearest
12the impounding agency within 10 days after that agency receives
13the notice or judgment of forfeiture.

14(l) The proceeds of any sale provided for pursuant to subdivision
15(k) or the forfeiture of currency shall be distributed in the following
16order:

17(1) First to the impounding agency to satisfy the storage charge
18provided in subdivision (e), if any.

19(2) Second, to any secured creditor to satisfy the indebtedness
20of the person from whom the secondhand tangible personal
21property or currency was taken.

22(3) Third, funds shall be made available to pay any local agency
23and court costs that are reasonably related to the implementation
24of this section and that remain unsatisfied.

25(4) Of the remaining proceeds, 10 percent shall be deposited
26into the Restitution Fund, 45 percent into the general fund of the
27city or county or city and county that instituted the forfeiture, and
2845 percent into the county or city and county in which the forfeiture
29occurred.

30(m) For purposes of this section, “secondhand tangible personal
31property” shall mean and refer to gold, silver, platinum, palladium,
32and jewelry made of gold, silver, platinum, palladium, or having
33any diamond, ruby, emerald, or other precious stone, or any item
34 containing sterling or fine silver.

35

SEC. 2.  

Section 21646 of the Business and Professions Code
36 is amended to read:

37

21646.  

The district attorney or the Attorney General, in the
38name of the people of the State of California, may bring an action
39to enjoin the violation or the threatened violation of any provision
40of this article or of any regulation made pertaining to the provisions
P9    1of this article. A nonprofit association composed of 50 or more
2licensed pawnbrokers or secondhand dealers may bring an action
3to enjoin a person from conducting business as a secondhand dealer
4without being licensed as provided in this article. Any proceeding
5brought hereunder shall be governed in all respects by the
6provisions of Chapter 3 (commencing with Section 525) of Title
77 of Part 2 of the Code of Civil Procedure. In the case of a nonprofit
8association bringing an action to enjoin a person from conducting
9business as a secondhand dealer without being licensed, if the
10association prevails and confers a public benefit by receiving an
11injunction, it shall be awarded its reasonable attorney’s fees and
12costs of suit.

end delete
13

begin deleteSEC. 3.end delete
14begin insert SECTION 1.end insert  

Section 21647 of the Business and Professions
15Code
is amended to read:

16

21647.  

(a) begin deleteWhenever any end deletebegin insertIf a end insertpeace officer has probable cause
17to believe that property, except coins, monetized bullion, or
18“commercial grade ingots” as defined in subdivision (d) of Section
1921627, in the possession of a licensed pawnbroker or secondhand
20dealer isbegin insert lost,end insert stolen,begin insert or embezzled, end insert the peace officerbegin delete shallend deletebegin insert mayend insert
21 place a hold on the property for a period not to exceed 90 days.
22When a peace officer places a hold on the property, the peace
23officer shall give the licensed pawnbroker or secondhand dealer
24a written notice at the time the hold is placed, describing the item
25or items to be held. During that period thebegin insert peace officer may takeend insert
26begin insert custody ofend insertbegin insert the property as evidence or leave it with the licensed
27pawnbroker or secondhand dealer. If the peace officer placing the
28hold leaves the item with the end insert
licensed pawnbroker or secondhand
29dealerbegin insert, that pawnbroker or secondhand dealer end insert shall not release
30or dispose of the property, except pursuant to a court order or upon
31receipt of a written authorization signed by any peace officer who
32is a member of the law enforcement agency of which the peace
33officer placing the hold on the property is a member. A licensed
34pawnbroker or secondhand dealerbegin delete shallend deletebegin insert isend insert notbegin delete beend delete subject to civil
35liability for compliance with this section.

36(b) (1) Whenever property that is in the possession of a licensed
37pawnbroker or secondhand dealer, and that has been placed on
38hold pursuant to this section, is required by a peace officer in a
39criminal investigation, the licensed pawnbroker or secondhand
40dealer, upon reasonable notice, shall produce the property at
P10   1reasonable times and places or may deliver the property to the
2peace officer upon the request of any peace officer.

3(2) If property placed on hold pursuant to this section is
4physically surrendered or delivered tobegin insert aend insert law enforcementbegin insert agencyend insert
5 during the period of the hold, the hold and the pawnbroker’s lien
6against the property shall continue. Upon termination of criminal
7proceedings for which the property was placed on hold, the
8property shall be returned to thebegin insert licensedend insert pawnbroker from whom
9it was taken for disposition provided under subdivision (d).

10(c) Whenever a law enforcement agency has knowledge that
11property in the possession of a licensed pawnbroker or secondhand
12dealer has been reported asbegin delete lost or stolen,end deletebegin insert lost, stolen, or embezzled,end insert
13 the law enforcement agency shall, within two business days after
14placing the hold on the property pursuant to this section, notify in
15writing the person who reported the property asbegin delete lost orend deletebegin insert lost,end insert stolenbegin insert,
16 or embezzledend insert
of the following:

17(1) The name, address, and telephone number of the licensed
18pawnbroker or secondhand dealer who reported the acquisition of
19the property.

20(2) That the law neither requires nor prohibits payment of a fee
21or any other condition in return for the surrender of the property,
22except that when the person who reported the propertybegin delete lost or
23stolenend delete
begin insert lost, stolen, or embezzledend insert does not choose to participate in
24the prosecution of an identified alleged thief, the person shall pay
25the licensed pawnbroker or secondhand dealer the “out-of-pocket”
26expenses paid in the acquisition of the property in return for the
27surrender of the property.

28(3) That if the person who reported the property as begin delete lost or stolenend delete
29begin insert lost, stolen, or embezzled end insert takes no action to recover the property
30from the licensed pawnbroker or secondhand dealer within 60 days
31of the mailing of the notice, the licensed pawnbroker or secondhand
32dealer may treat the property as other property received in the
33ordinary course of business. During the 60-day notice period, the
34licensed pawnbroker or secondhand dealer may not release the
35property to any other person.

36(4) That a copy of the notice, with the address of the person
37who reported the property as begin delete lost or stolenend delete begin insert lost, stolen, or embezzledend insert
38 deleted, will be mailed to the licensed pawnbroker or secondhand
39dealer who is in possession of the property.

P11   1(d) When property that is in the possession of a licensed
2pawnbroker or secondhand dealer is subject to a hold as provided
3in subdivision (a), and the property is no longer required for the
4purpose of a criminal investigation, the law enforcement agency
5that placed the hold on the property shall release the hold on the
6propertybegin delete. When the law enforcement agency has knowledge that
7the property has been reported lost or stolen, the law enforcement
8agency shall then make notification to the person who reported
9the property as lost or stolen pursuant to subdivision (c)end delete
begin insert and return
10the property to the licensed pawnbroker or secondhand dealer
11from which it was taken if the agency took physical possession of
12the propertyend insert
.

13(e) If a pledgor seeks to redeem property that is subject to a
14hold, thebegin insert licensedend insert pawnbroker shall advise the pledgor of the name
15of the peace officer who placed the hold on the property and the
16name of the law enforcement agency of which the officer is a
17member. If the property is not required to be held pursuant to a
18criminal prosecution the hold shall be released.

19(f) Whenever information regarding allegedlybegin delete lost or stolenend deletebegin insert lost,
20stolen, or embezzled end insert
property is entered into the Department of
21Justice automated property system or automated firearms system,
22and the property is thereafter identified and found to be in the
23possession of a licensed pawnbroker or secondhand dealer, the
24property shall be placed on a hold pursuant to this section and
25Section 11108.5 of the Penal Code.

26(g) If the hold, including any additional hold, is allowed to lapse,
27or 60 days elapse following the delivery of the notice required to
28be given by subdivision (c)begin delete of this sectionend delete to the person who
29reported the property to bebegin delete lost or stolenend deletebegin insert lost, stolen, or embezzledend insert
30 without a claim being made by that person, whichever is later, the
31 licensed pawnbroker or secondhand dealer may mail under a
32begin delete Certificateend deletebegin insert certificateend insert ofbegin delete Mailingend deletebegin insert mailingend insert issued by the United
33States Post Office, addressed to the law enforcement agency that
34placed the property on hold, a written request to delete the property
35listing from the Department of Justice automated property system
36or automated firearms system, as is applicable. Within 30 days
37after the request has been mailed, the law enforcement agency
38shall either cause the property listing to be deleted as requested or
39place a hold on the property. If no law enforcement agency takes
40any further action with respect to the property within 45 days after
P12   1the mailing of the request, the licensed pawnbroker or secondhand
2dealer may presume that the property listing has been deleted as
3requested and may thereafter deal with the property accordingly,
4and shall not be subject to liability arising from the failure of the
5removal of the property listing from the Department of Justice
6automated property system or automated firearms system.

7(h) A licensed pawnbroker or secondhand dealer shall not refuse
8a request to place property in their possession on hold pursuant to
9this section when a peace officer has probable cause to believe the
10property isbegin delete stolenend deletebegin insert end insertbegin insert lost, stolen, or embezzledend insert. If a licensed
11pawnbroker or secondhand dealer refuses a request to place
12property on hold pursuant to this section, after being provided
13written notice of the provisions of this section, the property may
14be seized with or without a warrant. The peace officer shall issue
15abegin delete receiptend deletebegin insert receipt,end insert as described in Section 21206.7 of the Financial
16Code, left with the licensed pawnbroker or secondhand dealer.
17The property shall be disposed of pursuant to procedures set forth
18in Section 21206.8 of the Financial Code, which shall apply to
19both licensed pawnbrokers and secondhand dealers under this
20section.

21(i) A search warrant shall not be issued for the search of the
22business of a licensed pawnbroker or secondhand dealer, unless
23the application by the peace officer disclosesbegin insert and the court so
24concludes that either (1) the evidence sought to be secured by the
25search warrant is sought for its evidentiary value other than being
26property that is lost, stolen, or embezzled; (2)end insert
the peace officer’s
27prior efforts taken to utilize the hold procedures set forth in this
28sectionbegin delete andend delete establishes to thebegin delete issuing magistrate’send deletebegin insert court’send insert
29 satisfaction that the licensed pawnbroker or secondhand dealer has
30refused to voluntarily surrender thebegin delete stolenend deletebegin insert lost, stolen,end insert or embezzled
31begin delete property,end deletebegin insert property;end insert or thatbegin insert (3) end insert there is probable cause to believe
32that thebegin delete stolenend deletebegin insert lost, stolen,end insert or embezzled property is willfully being
33concealed by the licensed pawnbroker or secondhand dealer and
34that any notice required by this section would frustrate the criminal
35investigation of the licensed pawnbroker or secondhand dealer.

36(j) If a civil or criminal court is called upon to adjudicate the
37competing claims of a licensed pawnbroker or secondhand dealer
38and another party claiming ownership or an interest in the property
39that is or was subject to a hold pursuant to this section, the court
P13   1shall award possession of the property only after due consideration
2is given to the effect of Section 2403 of the Commercial Code.

3

begin deleteSEC. 4.end delete
4begin insert SEC. 2.end insert  

Section 21206.8 of the Financial Code is amended to
5read:

6

21206.8.  

(a) Notwithstanding the provisions of Chapter 12
7(commencing with Section 1407) of Title 10 of Part 2 of the Penal
8Code, whenever property alleged to have been lost, stolen, or
9embezzled is taken from a pawnbroker, the peace officer,
10magistrate, court, clerk, or other person having custody of the
11property shall not deliver the property to any person claiming
12ownership unless the provisions of this section are complied with.

13(b) (1) If any person makes a claim of ownership, the person
14 shall file a written statement, signed under penalty of perjury,
15stating the factual basis upon which they claim ownership or an
16interest in the property with the person having custody of the
17property, and the person having custody of the property shall notify
18the pawnbroker of the claim by providing a true and correct copy
19of the claim to the pawnbroker.

20(2) If the pawnbroker makes no claim with respect to the
21property within 10 days of such notification, the property may be
22disposed of as otherwise provided by law.

23(3) In adjudicating the competing claims of a pawnbroker and
24a person claiming ownership or an interest in the property seized
25from a pawnbroker, thebegin delete magistrate or the person having custody
26of the propertyend delete
begin insert adjudicating courtend insert shall give due consideration to
27the effect Section 2403 of the Commercial Code may have on the
28claims.

29(4) At least 30 calendar days before any hearing adjudicating
30any competing claims of a pawnbroker and a person claiming
31ownership or an interest in the property, the person having custody
32of the property shall deliver to the pawnbroker a true and correct
33copy of the police report substantiating the basis of the seizure of
34the property from the pawnbroker.

35(c) If property alleged to have been stolen or embezzled is taken
36from a pawnbroker, prior to any disposal of the property pursuant
37to Section 1411 of the Penal Code, the notice to be given to the
38owner and owner of a security interest pursuant to Section 1411
39shall be given to the pawnbroker. Such property shall not be
P14   1disposed of pursuant to Section 1411 until three months after such
2notice has been given.

3(d) A pawnbroker shall not be liable to any person for any
4property seized from the pawnbroker on account of the
5pawnbroker’s inability to return the property to that person because
6of the seizure.

7begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 186.2 of the end insertbegin insertPenal Codeend insertbegin insert is amended to read:end insert

8

186.2.  

For purposes of this chapter, the following definitions
9apply:

10(a) “Criminal profiteering activity” means any act committed
11or attempted or any threat made for financial gain or advantage,
12which act or threat may be charged as a crime under any of the
13following sections:

14(1) Arson, as defined in Section 451.

15(2) Bribery, as defined in Sections 67, 67.5, and 68.

16(3) Child pornography or exploitation, as defined in subdivision
17(b) of Section 311.2, or Section 311.3 or 311.4, which may be
18prosecuted as a felony.

19(4) Felonious assault, as defined in Section 245.

20(5) Embezzlement, as defined in Sections 424 and 503.

21(6) Extortion, as defined in Section 518.

22(7) Forgery, as defined in Section 470.

23(8) Gambling, as defined in Sections 337a to 337f, inclusive,
24and Section 337i, except the activities of a person who participates
25solely as an individual bettor.

26(9) Kidnapping, as defined in Section 207.

27(10) Mayhem, as defined in Section 203.

28(11) Murder, as defined in Section 187.

29(12) Pimping and pandering, as defined in Section 266.

30(13) Receiving stolen property, as defined in Section 496.

31(14) Robbery, as defined in Section 211.

32(15) Solicitation of crimes, as defined in Section 653f.

33(16) Grand theft, as defined in Section 487.

34(17) Trafficking in controlled substances, as defined in Sections
3511351, 11352, and 11353 of the Health and Safety Code.

36(18) Violation of the laws governing corporate securities, as
37defined in Section 25541 of the Corporations Code.

38(19) Any of the offenses contained in Chapter 7.5 (commencing
39with Section 311) of Title 9, relating to obscene matter, or in
P15   1Chapter 7.6 (commencing with Section 313) of Title 9, relating to
2harmful matter that may be prosecuted as a felony.

3(20) Presentation of a false or fraudulent claim, as defined in
4Section 550.

5(21) False or fraudulent activities, schemes, or artifices, as
6described in Section 14107 of the Welfare and Institutions Code.

7(22) Money laundering, as defined in Section 186.10.

8(23) Offenses relating to the counterfeit of a registered mark,
9as specified in Section 350.

10(24) Offenses relating to the unauthorized access to computers,
11computer systems, and computer data, as specified in Section 502.

12(25) Conspiracy to commit any of the crimes listed above, as
13defined in Section 182.

14(26) Subdivision (a) of Section 186.22, or a felony subject to
15enhancement as specified in subdivision (b) of Section 186.22.

16(27) Any offenses related to fraud or theft against the state’s
17beverage container recycling program, including, but not limited
18to, those offenses specified in this subdivision and those criminal
19offenses specified in the California Beverage Container Recycling
20and Litter Reduction Act, commencing at Section 14500 of the
21Public Resources Code.

22(28) Human trafficking, as defined in Section 236.1.

23(29) Any crime in which the perpetrator induces, encourages,
24or persuades a person under 18 years of age to engage in a
25commercial sex act. For purposes of this paragraph, a commercial
26sex act means any sexual conduct on account of which anything
27of value is given or received by any person.

28(30) Any crime in which the perpetrator, through force, fear,
29coercion, deceit, violence, duress, menace, or threat of unlawful
30injury to the victim or to another person, causes a person under 18
31years of age to engage in a commercial sex act. For purposes of
32this paragraph, a commercial sex act means any sexual conduct
33on account of which anything of value is given or received by any
34person.

35(31) Theft of personal identifying information, as defined in
36Section 530.5.

37(32) Offenses involving the theft of a motor vehicle, as specified
38in Section 10851 of the Vehicle Code.

39(33) Abduction or procurement by fraudulent inducement for
40 prostitution, as defined in Section 266a.

begin insert

P16   1(34) Buying, selling, trading, accepting for sale on consignment,
2accepting for auctioning, or auctioning secondhand tangible
3personal property as defined by Section 21627 of the Business and
4Professions Code, including, but not limited to, gold, silver,
5platinum, palladium, and jewelry made of gold, silver, platinum,
6palladium, or having any diamond, ruby, emerald, or other
7precious stone, or any item containing sterling or fine silver
8without being licensed pursuant to Section 21640 of the Business
9and Professions Code.

end insert

10(b) (1) “Pattern of criminal profiteering activity” means
11engaging in at least two incidents of criminal profiteering, as
12defined by this chapter, that meet the following requirements:

13(A) Have the same or a similar purpose, result, principals,
14victims, or methods of commission, or are otherwise interrelated
15by distinguishing characteristics.

16(B) Are not isolated events.

17(C) Were committed as a criminal activity of organized crime.

18(2) Acts that would constitute a “pattern of criminal profiteering
19activity” may not be used by a prosecuting agency to seek the
20remedies provided by this chapter unless the underlying offense
21occurred after the effective date of this chapter and the prior act
22occurred within 10 years, excluding any period of imprisonment,
23of the commission of the underlying offense. A prior act may not
24be used by a prosecuting agency to seek remedies provided by this
25chapter if a prosecution for that act resulted in an acquittal.

26(c) “Prosecuting agency” means the Attorney General or the
27district attorney of any county.

28(d) “Organized crime” means crime that is of a conspiratorial
29nature and that is either of an organized nature and seeks to supply
30illegal goods and services such as narcotics, prostitution,
31loan-sharking, gambling, and pornography, or that, through
32planning and coordination of individual efforts, seeks to conduct
33the illegal activities of arson for profit, hijacking, insurance fraud,
34smuggling, operating vehicle theft rings, fraud against the beverage
35container recycling program, or systematically encumbering the
36assets of a business for the purpose of defrauding creditors.
37“Organized crime” also means crime committed by a criminal
38street gang, as defined in subdivision (f) of Section 186.22.
39“Organized crime” also means false or fraudulent activities,
40schemes, or artifices, as described in Section 14107 of the Welfare
P17   1and Institutions Code, and the theft of personal identifying
2information, as defined in Section 530.5.begin insert “Organized crime” also
3means the violation of Section 21640 of the Business and
4Professions Code while not reporting acquisitions of secondhand
5property as required by Section 21628 of the Business and
6Professions Code.end insert

7(e) “Underlying offense” means an offense enumerated in
8subdivision (a) for which the defendant is being prosecuted.

9begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 186.8 of the end insertbegin insertPenal Codeend insertbegin insert is amended to read:end insert

10

186.8.  

Notwithstanding that no response or claim has been
11filed pursuant to Section 186.5, in all cases where property is
12forfeited pursuant to this chapter and, if necessary, sold by the
13Department of General Services or local governmental entity, the
14money forfeited or the proceeds of sale shall be distributed by the
15state or local governmental entity as follows:

16(a) To the bona fide or innocent purchaser, conditional sales
17vendor, or holder of a valid lien, mortgage, or security interest, if
18any, up to the amount of his or her interest in the property or
19proceeds, when the court declaring the forfeiture orders a
20distribution to that person. The court shall endeavor to discover
21all those lienholders and protect their interests and may, at its
22discretion, order the proceeds placed in escrow for up to an
23additional 60 days to ensure that all valid claims are received and
24processed.

25(b) To the Department of General Services or local governmental
26entity for all expenditures made or incurred by it in connection
27with the sale of the property, including expenditures for any
28necessary repairs, storage, or transportation of any property seized
29under this chapter.

30(c) To the General Fund of the state or a general fund of a local
31governmental entity, whichever prosecutes.

32(d) In any case involving a violation of subdivision (b) of
33Section 311.2, or Section 311.3 or 311.4, in lieu of the distribution
34of the proceeds provided for by subdivisions (b) and (c), the
35proceeds shall be deposited in the county children’s trust fund,
36established pursuant to Section 18966 of the Welfare and
37Institutions Code, of the county that filed the petition of forfeiture.
38If the county does not have a children’s trust fund, the funds shall
39be deposited in the State Children’s Trust Fund, established
40pursuant to Section 18969 of the Welfare and Institutions Code.

P18   1(e) In any case involving crimes against the state beverage
2container recycling program, in lieu of the distribution of proceeds
3provided in subdivision (c), the proceeds shall be deposited in the
4penalty account established pursuant to subdivision (d) of Section
514580 of the Public Resources Code, except that a portion of the
6proceeds equivalent to the cost of prosecution in the case shall be
7distributed to the local prosecuting entity that filed the petition of
8forfeiture.

9(f) (1) In any case described in paragraph (29) or (30) of
10subdivision (a) of Section 186.2, or paragraph (33) of subdivision
11(a) of Section 186.2 where the victim is a minor, in lieu of the
12distribution provided for in subdivision (c), the proceeds shall be
13deposited in the Victim-Witness Assistance Fund to be available
14for appropriation to fund child sexual exploitation and child sexual
15abuse victim counseling centers and prevention programs under
16Section 13837. Fifty percent of the funds deposited in the
17Victim-Witness Assistance Fund pursuant to this subdivision shall
18be granted to community-based organizations that serve minor
19victims of human trafficking.

20(2) Notwithstanding paragraph (1), any proceeds specified in
21paragraph (1) that would otherwise be distributed to the General
22Fund of the state under subdivision (c) pursuant to a paragraph in
23subdivision (a) of Section 186.2 other than paragraph (29) or (30)
24of subdivision (a) of Section 186.2, or paragraph (33) of
25subdivision (a) of Section 186.2 where the victim is a minor, shall,
26except as otherwise required by law, continue to be distributed to
27the General Fund of the state as specified in subdivision (c).

begin insert

28(g) In any case described in paragraph (34) of subdivision (a)
29of Section 186.2, in lieu of the distribution provided for in
30subdivision (c), the proceeds shall be distributed in the following
31manner: (1) 45 percent shall be distributed into the general fund
32of the city, county, or city and county that instituted the forfeiture,
33(2) 45 percent shall be distributed to the general fund of the city,
34county, or city and county that prosecuted the forfeiture, and (3)
3510 percent shall be distributed to the Restitution Fund.

end insert
36

SEC. 5.  

Section 1411 of the Penal Code is amended to read:

37

1411.  

(a) If the ownership of the property stolen or embezzled
38and the address of the owner, and the address of the owner of a
39security interest therein, can be reasonably ascertained, the peace
40officer who took custody of the property shall notify the owner,
P19   1and a person having a security interest therein, by letter of the
2location of the property and the method by which the owner may
3obtain it. This notice shall be given upon the conviction of a person
4for an offense involving the theft, embezzlement, or possession of
5the property, or if a conviction was not obtained, upon the making
6of a decision by the district attorney not to file the case or upon
7the termination of the proceedings in the case. Except as provided
8in Section 217 of the Welfare and Institutions Code, if the property
9stolen or embezzled is not claimed by the owner before the
10expiration of three months after the giving of this notice, or, in any
11case in which such a notice is not given, before the expiration of
12six months from the conviction of a person for an offense involving
13the theft, embezzlement, or possession of the property, or if a
14conviction was not obtained, then from the time the property came
15into the possession of the peace officer or the case involving the
16person from whom it was obtained is disposed of, whichever is
17later, the magistrate or other officer having it in custody may, on
18the payment of the necessary expenses incurred in its preservation,
19deliver it to the county treasurer or other proper county officer, by
20whom it shall be sold and the proceeds paid into the county
21treasury. However,begin insert notwithstanding any otherend insertbegin insert law,end insert if the person
22from whom custody of the property was taken is a secondhand
23dealer or licensed pawnbroker and reasonable but unsuccessful
24efforts have been made to notify the owner of the property and the
25property is no longer needed for the criminal proceeding, the
26property shall be returned to the secondhand dealer or pawnbroker
27who had custody of the property and be treated as regularly
28acquired property. If the property is transferred to the county
29purchasing agent it may be sold in the manner provided by Article
307 (commencing with Section 25500) of Chapter 5 of Part 2 of
31Division 2 of Title 3 of the Government Code for the sale of surplus
32personal property. If the county officer determines that any of the
33property transferred to him or her for sale is needed for a public
34use, the property may be retained by the county and need not be
35sold. The magistrate or other officer having the property in custody
36may, however, provide for the sale of the property in the manner
37provided for the sale of unclaimed property which has been held
38for at least three months pursuant to Section 2080.4 of the Civil
39Code.

P20   1(b) This section shall not govern the disposition of property
2placed on hold pursuant to Section 21647 of the Business and
3Professions Code, notwithstanding the current custodial status of
4the property, unless the licensed pawnbroker or secondhand dealer,
5after receipt of the written advisement required by subdivision (h)
6of Section 21647 of the Business and Professions Code, willfully
7refuses to consent to a statutory hold as provided by Section 21647
8of the Business and Professions Code or a search warrant for the
9business of the licensed pawnbroker or secondhand dealer has
10resulted in the seizure of the property subject to this section.

11

SEC. 6.  

Section 11108.5 of the Penal Code is amended to read:

12

11108.5.  

(a) If a law enforcement agency identifies serialized
13property or any property reported pursuant to Section 21628 of
14the Business and Professions Code that has been reported lost or
15stolen by the owner or a person entitled to possession of the
16property and the property has been entered into the appropriate
17Department of Justice automated property system pursuant to
18Section 11108, the agency shall notify the owner or person
19claiming to be entitled to possession of the property of the location
20of the property within 15 days of making the identification. If the
21location of the property was reported by a licensed pawnbroker or
22secondhand dealer pursuant to Section 21630 of the Business and
23Professions Code, notwithstanding the method by which the
24property was identified, notice shall be given to the party who
25reported the property lost or stolen pursuant to Section 21647 of
26the Business and Professions Code.

27(b) If the property is in the custody of the law enforcement
28agency and it is determined that the property is no longer required
29for use as evidence in a criminal case, the property shall be made
30available to the person entitled to possession pursuant to Section
311417.5 or if the property was found in the possession of a licensed
32pawnbroker or secondhand dealer, pursuant to Section 21647 of
33the Business and Professions Code.

34(c) Subdivision (a) shall not apply to the return to an owner of
35a lost or stolen vehicle, as defined in Section 670 of the Vehicle
36Codebegin insert if the report of theft or loss of the vehicle into the automated
37property system preceded the report of the acquisition of property
38as set forth in Section 21628 of the Business and Professions Code
39by a licensed pawnbrokerend insert
.

P21   1

SEC. 7.  

No reimbursement is required by this act pursuant to
2Section 6 of Article XIII B of the California Constitution because
3the only costs that may be incurred by a local agency or school
4district will be incurred because this act creates a new crime or
5infraction, eliminates a crime or infraction, or changes the penalty
6for a crime or infraction, within the meaning of Section 17556 of
7the Government Code, or changes the definition of a crime within
8the meaning of Section 6 of Article XIII B of the California
9Constitution.



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