BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 762|
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THIRD READING
Bill No: SB 762
Author: Hill (D)
Amended: 4/15/13
Vote: 21
SENATE PUBLIC SAFETY COMMITTEE : 7-0, 4/23/13
AYES: Hancock, Anderson, Block, De León, Knight, Liu, Steinberg
SENATE JUDICIARY COMMITTEE : 6-1, 4/30/13
AYES: Evans, Walters, Corbett, Jackson, Leno, Monning
NOES: Anderson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Secondhand goods: lost, stolen, or embezzled items
SOURCE : California Pawnbrokers Association
DIGEST : This bill provides that operating as an unlicensed
secondhand dealer and failing to report acquisitions of
secondhand goods may be considered criminal profiteering by
organized crime and the profits of such an enterprise subject to
criminal forfeiture. This bill protects and clarifies the
rights and interests of pawnbrokers in property seized from a
pawnbroker where a criminal investigation or case involving the
property has been resolved or terminated.
ANALYSIS :
Existing law:
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1. Includes criminal profiteering asset forfeiture that applies
where the defendant is convicted of a specified offense and
the defendant has engaged in a pattern of criminal
profiteering activity, as specified.
2. Provides that pawnbrokers and coin dealers shall report
daily on forms approved or provided by the Department of
Justice (DOJ), or electronically, as specified, all personal
property purchased, taken in trade, taken in pawn, etc., to
local law enforcement.
3. Provides that when a peace officer has probable cause to
believe that property, other than coins and precious metal
ingots, in the possession of a pawnbroker, secondhand dealer
or coin dealer is stolen, the officer may place a hold on the
property for up to 90 days.
4. Provides that where stolen or lost property (as listed in
the DOJ system) is found in the possession of a pawnbroker,
secondhand dealer or coin dealer, and a peace officer places
a hold on the property, the following shall apply:
If 60 days elapses following delivery of the required
notice to the reporting person, or the hold otherwise
elapses, the pawnbroker, secondhand dealer or coin dealer
may send, by certified mail, a request to delete the
property from the DOJ stolen or lost property or firearm
system.
Within 30 days of the mailing of the request, the law
enforcement agency shall have the listing deleted or place
a hold on the property.
If law enforcement takes no action within 45 days, the
pawnbroker, secondhand dealer or coin dealer, may presume
the listing has been deleted and "deal with the property
accordingly."
1. Provides that where allegedly stolen property has been taken
from a pawnbroker, the officer, magistrate, court clerk or
other holder of the property shall not deliver the property
to a person claiming ownership unless the requirements have
been met, as specified.
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2. Provides that where the ownership of stolen or embezzled
property can be ascertained, and where the address of the
owner and security holder can be ascertained, the officer in
custody of the property shall notify by mail the owner and
security holder, as specified.
This bill:
1. Defines operating a business as a secondhand goods dealer
without a license as criminal profiteering, subject to the
forfeiture laws covering such activities.
2. Provides that operating as secondhand goods dealer without a
license and not reporting to the police acquisitions of
secondhand goods shall be defined as organized crime, within
the meaning of the criminal profiteering asset forfeiture
laws.
3. Provides that the proceeds of forfeiture, after storage
fees, court costs and money owed secured creditors are paid,
shall be distributed, as specified.
4. Provides that the rules set out in Penal Code Section 1411
concerning retrieval from a law enforcement agency of stolen
or embezzled property by the owner of the property shall not
apply to property taken from a pawnbroker or secondhand
dealer unless the pawnbroker or secondhand dealer willfully
refused to consent to a statutory hold on the property or the
property was seized from the pawnbroker or secondhand dealer
by warrant.
5. Provides that where property held by a pawnbroker or
secondhand dealer is needed for a criminal investigation, and
a law-enforcement hold has been placed on the property, the
property lien of the pawnbroker or secondhand dealer shall
continue when the property is surrendered to law enforcement.
Upon termination of criminal proceedings, the property shall
be returned to the pawnbroker for disposition, as specified.
6. Specifically provides that a peace officer, when placing a
hold on property found at a pawnshop that has been reported
stolen, may take the property or leave it at the pawnshop.
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7. Provides that when property entered into the DOJ automated
property or firearm system is found in the possession of a
pawnbroker or secondhand dealer, the property shall be placed
on law enforcement hold.
8. Provides that a pawnbroker or secondhand dealer shall not
refuse a request to place a hold on property that law
enforcement has probable cause to believe is stolen. If the
hold request is refused, an officer may seize the property
without a warrant.
9. Provides that a warrant shall not be issued for the search
of a pawn or secondhand business unless the application for
the warrant sets out the officer's unsuccessful attempts to
use the procedures for placing a hold on the property and the
magistrate determines the following:
A. The pawnbroker or secondhand dealer has refused to
voluntarily surrender the property, or there is probable
cause that the business owner willfully concealed the
property; and
B. Any notice requirements as to the property would
frustrate the criminal investigation of the pawnbroker or
secondhand dealer.
1. Provides that in adjudicating competing claims of interest
in property seized from a pawnbroker, the magistrate or
person with custody of the property shall consider Commercial
Code Section 2403, which concerns the rights acquired by a
purchaser of property under various circumstances.
2. Provides that when property that has been reported lost,
stolen or embezzled is taken from a pawnshop, the following
applies:
A. The person claiming ownership of the property must
file a written statement, under penalty of perjury,
stating the factual basis for his/her claim.
B. The person with custody of the property shall notify
the pawnbroker of the claim and provide the pawnbroker
with a copy of the claim.
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1. Provides that at least 30 days prior to any hearing
adjudicating competing claims of a pawnbroker and a person
claiming interest in property, the person with custody of the
property shall deliver to the pawnbroker a copy of the police
report substantiating the basis for the seizure of the
property from the pawnbroker.
2. Refers to property that is "lost, stolen or embezzled" in
references to property that is acquired by pawnbrokers and
secondhand dealers and subject to reporting requirements and
procedures for return of such property. Existing law refers
to lost and stolen property.
Comments
The Legislature has enacted various laws to curtail the
dissemination of stolen property and facilitate the recovery of
stolen property, including laws regulating pawnbroker and
secondhand dealer businesses, which may be utilized by
individuals attempting to sell or pawn stolen or embezzled
property.
With the recent rise in the price of gold, individuals, who are
unlicensed to deal in the resale of secondhand goods, are
availing themselves of this opportunity to purchase gold and
jewelry items for resale. The author argues that this
unlicensed activity must be addressed. In order to limit the
potential for criminal transfer of property, this bill enhances
existing laws governing the practices of unlicensed secondhand
goods sales, and provide additional due process protections to
licensed pawnbrokers and secondhand dealers.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/13/13)
California Pawnbrokers' Association (source)
California Coin and Bullion Merchants Association
California Police Chief's Association, Inc.
OPPOSITION : (Verified 5/13/13)
California District Attorneys Association
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ARGUMENTS IN SUPPORT : According to the author's office, under
current law there are no consequences to operators who are
unlicensed and deal in secondhand reportable property
transactions. Consumers cannot recover property that is not
"held" as described in current law, when an unscrupulous
operator is not licensed and therefore ignores that requirement.
Theoretically, the bill can generate revenue through seizure
that may be directed to the General Funds of cities and counties
that may be dedicated to law enforcement and prosecutors to curb
this illegal activity.
Further, to incentivize businesses to become licensed and to
report and hold their acquisitions pursuant to existing law, SB
762 streamlines the process of adjudicating the competing claims
of licensed secondhand dealers and alleged crime victims by
revising the existing statutory hold provision of current law.
ARGUMENTS IN OPPOSITION : The California District Attorneys
Association states:
[W]e remain concerned with the language in the bill that
governs the issuance of search warrants. Specifically, the
amendments to Business and Professions Code Section 21647
eliminate the authority of a peace officer to make an
immediate, plain view seizure of stolen property as recognized
in Christians v. Chester (1990) 218 Cal.App.3d 273. Before an
officer could make a seizure, the bill would require that he
or she has to give the pawnbroker written notification.
Additionally, we are generally concerned about attempted
statutory search warrant restrictions that are sought to
protect business interests. Law enforcement has a duty to
investigate and prosecute crime. The application for, and the
issuance of, search warrants are topics that are the subject
of much statute and volumes of case law. Jurisprudence
surrounding the lawful issuance of search warrants is a
balance between the right to be free from unlawful searches
and the necessity of law enforcement to enforce the law and
protect the public. The fiscal interests of one particular
industry should not trump this carefully struck balance and
respectfully, we feel this measure unduly restricts the
ability of law enforcement to do its job.
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JG:k 5/14/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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