BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:   June 18, 2013

              ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER  
                                     PROTECTION
                              Richard S. Gordon, Chair
                      SB 762 (Hill) - As Amended:  June 4, 2013

           SENATE VOTE  :   31-2
           
          SUBJECT  :   Secondhand goods: lost, stolen, or embezzled items.

           SUMMARY  :   Provides that operating as an unlicensed secondhand  
          dealer and failing to report specified transactions of  
          secondhand goods may be considered criminal profiteering  
          activity or organized crime, clarifies the interests of licensed  
          pawnbrokers and secondhand dealers relating to the seizure and  
          disposition of property during a criminal investigation or case,  
          and subjects the profits of unlicensed trade in precious metals  
          to criminal forfeiture.  Specifically,  this bill  :   

          1)Clarifies that if a peace officer has probable cause to  
            believe that specified property in the possession of a  
            licensed pawnbroker or secondhand dealer is lost, stolen, or  
            embezzled, the peace officer may place a hold on the property  
            not to exceed 90 days.

          2)Provides that a 90-day hold is created upon receipt by a  
            licensed pawnbroker or secondhand dealer of a written notice  
            from a peace officer that contains the following:

             a)   An accurate description of the property being placed on  
               the 90-day hold;

             b)   An acknowledgment that the property is being placed on  
               hold as specified, and denoting whether physical possession  
               will remain with the licensed pawnbroker or secondhand  
               dealer or will be taken by the law enforcement agency  
               instituting the 90-day hold;

             c)   The law enforcement agency's police report or department  
               record number, if issued, for which the property is needed  
               as evidence; and,

             d)   The date the notice was delivered to the licensed  
               pawnbroker or secondhand dealer that initiates the  








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               specified notification period.

          3)Provides that the hold will not exceed a period of 90 calendar  
            days, but may be renewed as specified.

          4)Provides that the hold may be renewed as often as required for  
            a criminal investigation or criminal proceeding by any peace  
            officer who is a member of the same law enforcement agency as  
            the peace office placing the hold on the property.

          5)Permits a peace officer to either take physical possession of  
            the property as evidence, consistent with a peace officer's  
            right to a plain view seizure for a criminal investigation or  
            criminal proceeding, or to leave the property in the  
            possession of the licensed pawnbroker or secondhand dealer as  
            a custodian on behalf of the law enforcement agency.

          6)Requires the licensed pawnbroker or secondhand dealer to  
            maintain physical possession of the property placed on hold  
            and prohibits the property's release or disposal, except  
            pursuant to the written authorization signed by a peace  
            officer who is a member of the same law enforcement agency as  
            the peace officer placing the hold on the property.

          7)Specifies that the hold terminates when the property is no  
            longer needed as evidence in a criminal investigation or  
            criminal proceeding at which time the property shall be  
            disposed of as specified.

          8)Specifies that the hold shall not be applicable to secure  
            lost, stolen, or embezzled property found in the possession of  
            an unlicensed pawnbroker or secondhand dealer that has not  
            duly and correctly reported the acquisition as specified, and  
            allows in such circumstance, a peace officer having probably  
            cause to believe the property found in the possession of an  
            unlicensed pawnbroker or secondhand dealer is lost, stolen, or  
            embezzled, may seize the item or items consistent with the  
            legal authority granted to the peace officer.

          9)Specifies that if property placed on hold is physically  
            surrendered or delivered to a law enforcement agency during  
            the period of the hold, the hold and the pawnbroker's lien  
            against the property shall continue.

          10)Clarifies that whenever a law enforcement agency has  








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            knowledge that property in possession of a licensed pawnbroker  
            or secondhand dealer has been reported lost, stolen, or  
            embezzled, the law enforcement agency must within two business  
            days after placing a hold on the property notify the person in  
            writing who reported the property as lost, stolen or  
            embezzled.

          11)Adds embezzled property to the list of property that may  
            require a hold.

          12)Specifies that when property in possession of a licensed  
            pawnbroker or secondhand dealer which is subject to a hold is  
            no longer required for the purpose of an investigation or  
            criminal proceeding, the law enforcement agency that placed  
            the hold shall return the property to the licensed pawnbroker  
            or secondhand dealer from which it was taken if the law  
            enforcement agency took physical possession of the property.

          13)Specifies that a licensed pawnbroker or secondhand dealer  
            shall not refuse a request to place property in their  
            possession on hold as specified when a peace officer has  
            probable cause to believe the property is lost, stolen, or  
            embezzled.  If a licensed pawnbroker or secondhand dealer  
            refuses a request to place property on hold as specified, the  
            property may be seized with or without a warrant and the peace  
            officer shall issue a receipt as specified, left with the  
            licensed pawnbroker or secondhand dealer and specifies that  
            that property should be disposed of accordingly.

          14)Specifies that if a search warrant is issued for the search  
            of a business of a licensed pawnbroker or secondhand dealer to  
            secure lost, stolen or embezzled property that has been placed  
            on hold, the hold shall continue for the duration that the  
            property remains subject to the court's jurisdiction and  
            specifies that when the property seized for a criminal  
            investigation or criminal proceeding has concluded the  
            property shall be disposed of as specified.

          15)Specifies that if a civil or criminal court is called upon to  
            adjudicate the competing claims of a licensed pawnbroker or  
            secondhand dealer and another party claiming ownership or an  
            interest in the property that is or was subject to a hold as  
            specified, the court shall award the possession of the  
            property only after due consideration is given as specified.









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          16)Specifies that a licensed pawnbroker or secondhand dealer is  
            not subject to civil liability for compliance as specified.

          17)Specifies that if anyone makes a claim of ownership, the  
            person shall file a written statement, signed under penalty of  
            perjury, stating the factual basis upon which they claim  
            ownership or an interest in the property with person having  
            custody of the property shall notify the pawnbroker of the  
            claim by providing a true and correct copy of the claim to the  
            pawnbroker.

          18)Specifies that in adjudicating the competing claims of a  
            pawnbroker and a person claiming ownership or an interest in  
            the property seized from a pawnbroker the adjudicating court  
            shall give due consideration to the specified effect on the  
            claim.

          19)Specifies that at least 30 calendar days before any hearing  
            adjudicating any competing claims of a pawnbroker and a person  
            claiming ownership or an interest in the property, the person  
            having custody of the property shall deliver to the pawnbroker  
            a true and correct copy of the police report, redacted as may  
            be required by law and consistent with due process of law,  
            substantiating the basis of the seizure.

          20)Specifies that organized crime also means the unlicensed  
            engagement in the business of a secondhand dealer or  
            pawnbroker as specified, while not reporting daily  
            acquisitions of secondhand property.

          21)States that any specified violation of buying, selling,  
            trading, accepting for sale on consignment, accepting for  
            auctioning, or auctioning secondhand tangible personal  
            property as specified, including but not limited to gold,  
            silver, platinum, palladium, and jewelry made of gold, silver,  
            platinum, palladium or having any diamond, ruby, emerald, or  
            other precious stone, or any item containing sterling or fine  
            silver may be defined as criminal profiteering activity and  
            specifies that for any items which result in the forfeiture of  
            property, the funds shall be distributed in the following  
            manner: 50% shall be distributed to into the general fund of  
            the city, county, or city and county that instituted the  
            forfeiture, and 50% shall be distributed to the general fund  
            of the city, county, or city and county that prosecuted the  
            forfeiture.








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          22)Exempts a secondhand dealer or pawnbroker from retrieval of  
            property which was a part of a criminal investigation, if  
            after receipt of the written advisement as specified, the  
            licensed pawnbroker or secondhand dealer willfully refuses to  
            consent to a statutory hold or a search warrant for the  
            business which has resulted in the seizure of the subjected  
            property.

          23)Provides that the return of property by a law enforcement  
            agency required to be made to a person claiming to be entitled  
            to possession of a lost or stolen vehicle is not required if  
            the report of the theft or loss of the vehicle into the  
            automated property system preceded the report of the  
            acquisition of the property by a licensed pawnbroker. 

          24)States that no reimbursement is required by this bill  
            pursuant to Section 6 of Article XIIIB of the California  
            Constitution because the only costs that may be incurred by a  
            local agency or a school district will be incurred because  
            this bill creates a new crime or infraction, eliminates a  
            crime or infraction, or changes the penalty for a crime or  
            infraction within the meaning of Section 17556 of the  
            Government Code, or changes the definition of a crime within  
            the meaning of Section 6 of Article XIIIB of the California  
            Constitution. 

          25)Makes other technical, conforming and clarifying amendments. 

             EXISTING LAW  : 

          1)Defines a secondhand dealer to mean and include "any person,  
            corporation, firm, or corporation whose business includes  
            buying, selling, trading, taking in pawn, accepting for sale  
            on consignment, accepting for auctioning or auctioning a  
            secondhand tangible personal property." (Business and  
            Professions Code (BPC) Section 21626)

          2)Specifies that a secondhand dealer does not include a coin  
            dealer or participants at gun shows or events, as specified.  
            (BPC 21216)

          3)Specifies that secondhand dealers are not persons who perform  
            the services of an auctioneer for a fee or salary or any  
            person whose business is limited to the reconditioning and  








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            selling of major household appliances, provided specified  
            conditions are met. (BPC 21626.5)

          4)Specifies that tangible personal property includes, but is not  
            limited to, all secondhand tangible personal property which  
            bears a serial number or personalized initials or inscription  
            or which at the time it is acquired by the secondhand dealer,  
            bears evidence of having had a serial number or personalized  
            initials or inscription. (BPC 21627(a))

          5)Specifies that tangible personal property may also include:

             a)   All tangible personal property new or used, including  
               motor vehicles, received in pledge as security for a loan  
               by a pawnbroker;

             b)   All tangible personal property that bears a serial  
               number or personalized initials or inscription which is  
               purchased by a secondhand dealer or pawnbroker or which, at  
               the time of such purchases, bears evidence of having had a  
               serial number or personalized initials or inscription; and

             c)   All personal property commonly sold by secondhand  
               dealers which statistically is found through crime reports  
               to the Attorney General (AG) to constitute a significant  
               class of stolen goods.  A list of such personal property  
               shall be supplied by the AG to all local law enforcement  
               agencies as specified. (BPC 21627(b)) 

          6)Requires every secondhand dealer or coin dealer as specified,  
            to report daily, or on the first working day after receipt or  
            purchase of secondhand tangible personal property, on forms or  
            through an electronic reporting system approved by the  
            Department of Justice (DOJ), all secondhand tangible personal  
            property, except for firearms, which he or she has taken in  
            trade or pawn, accepted for sale on consignment, or accepted  
            for auctioning to the chief of police or the sheriff as  
            specified. (BPC 21628)

          7)Requires that whenever any peace officer has probable cause to  
            believe that property, except coin, monetized bullion, or  
            commercial grade ingots as specified, in the possession of  
            pawnbroker, secondhand dealer, or coin dealer is stolen, the  
            peace officer may place a hold on the property for a period of  
            time not to exceed 90 days and requires the peace officer to  








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            provide a specified written notice at the time of the hold.   
            (BPC 21647)

          8)States that whenever a law enforcement agency has knowledge  
            that property in the possession of a pawnbroker, secondhand  
            dealer, or coin dealer has been reported as lost or stolen the  
            law enforcement agency shall notify the person in writing, who  
            reported the property lost or stolen, of the following:

             a)   The name, address, and telephone number of the  
               pawnbroker, secondhand dealer, or coin dealer who reported  
               the acquisition of the property;

             b)   That the law neither requires nor prohibits payment of a  
               fee or any other condition in return for the surrender of  
               the property, except that when the person who reported the  
               property lost or stolen does not choose to participate in  
               the prosecution of an alleged thief, the person shall pay  
               the pawnbroker, secondhand dealer, or coin dealer the  
               out-of-pocket expenses paid in the acquisition of the  
               property in return for the surrender of the property;

             c)   That if a person who reported the property as lost or  
               stolen takes no action to recover the property from the  
               pawnbroker, secondhand dealer, or coin dealer within 60  
               days of the mailing of the notice, the pawnbroker,  
               secondhand dealer, or coin dealer may treat the property as  
               other property received in the ordinary course of business  
               and during the 60-day notice period may not release the  
               property to any other person; and

             d)   That a copy of the notice, with the address of the  
               person who reported the property as lost or stolen deleted  
               [sic], will be mailed to pawnbroker, secondhand dealer, or  
               coin dealer who is in possession of the property. (BPC  
               21647)

          9)Specifies that when property in the possession of a pawn  
            broker, secondhand dealer, or coin dealer is subject to a hold  
            as specified, and the property is no longer required for the  
            purpose of a criminal investigation, the law enforcement  
            agency that placed the hold on the property shall release the  
            hold on the property. (BPC 21647)

          10)Specifies that whenever property that is alleged to have been  








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            stolen or embezzled is taken from a pawnbroker, the peace  
            officer, magistrate, court, clerk, or other person having  
            custody of the property shall not deliver the property to any  
            person claiming ownership unless specified provisions are  
            complied with.  (Financial Code Section (FC) 21206.8) 

          11)Specifies that a pawnbroker shall not be liable to any person  
            for any property seized from the pawnbroker on account of the  
            pawnbroker's inability to return the property to that person  
            because of the seizure as specified. (FC 21206.8)

          12)Defines criminal profiteering activity to mean "any act  
            committed or attempted or any threat made for financial gain  
            or advantage, which act or threat may be charged as  
            specified." (Penal Code (PC) Section 186.2)

          13)Defines organized crime to mean "a crime that is of a  
            conspiratorial nature and that is either of an organized  
            nature and seeks to supply illegal goods and services such as  
            narcotics, prostitution, loan-sharking, gambling, and  
            pornography, or that, through planning and coordination of  
            individual efforts, seeks to conduct the illegal activities of  
            arson for profit, hijacking, insurance fraud, smuggling,  
            operation vehicle theft rings, fraud against the beverage  
            container recycling program, or systemically encumbering the  
            assets of a business for the purpose of defrauding creditors  
            and also means a crime committed by a street gang, false or  
            fraudulent activities, schemes or artifices as specified." (PC  
            186.2)

          14)Requires forfeited cash and proceeds of the sale of forfeited  
            property to be distributed as follows: 

             a)   To the bona fide or innocent purchaser, conditional  
               sales vendor, or holder of a valid lien, mortgage, or  
               security interest, up to the amount of his or her interest  
               in the property or proceeds, as specified;

             b)   To the Department of General Services or local  
               governmental entity for all expenditures incurred in  
               connection with the sale of the forfeited property;

             c)   To the State General Fund or the general fund of the  
               local governmental entity, whichever prosecutes; 









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             d)   In a case of fraud involving the state recycling  
               program, to a special fund designated in the Public  
               Resources Code;

             e)   In the case of child pornography crimes, to the county  
               children's trust fund or State Children's Trust Fund; and,

             f)   In a case involving the use of a minor for prostitution  
               or related commercial sex acts, to the Victim-Witness  
               Assistance Fund for child sexual exploitation and abuse  
               counseling and prevention programs; 50 percent of the funds  
               shall be granted to community-based organizations that  
               serve minor victims of human trafficking.  (PC 186.8)

           FISCAL EFFECT  :   Unknown  

           COMMENTS  :   

           1)Purpose of the bill  .  This bill is intended to reduce the  
            amount of unlicensed and unregulated activity in the purchase  
            and sale of secondhand goods, particularly those involving  
            precious metals, by making the operations of an unlicensed  
            secondhand dealer a "criminal profiteering activity", and  
            adding failure of an unlicensed secondhand dealer to provide  
            the required reports to local law enforcement to the  
            definition of "organized crime."  The profits of such  
            activities would become subject to criminal forfeiture.  

          SB 762 also provides a new level of due process protection for  
            pawnbrokers and secondhand dealers to ensure that they receive  
            or retain certain property which is no longer a part of a  
            criminal investigation.  Finally, it specifies a new formula  
            for certain property obtained by forfeiture to be disbursed to  
            certain public funds or agencies.  This bill is sponsored by  
            the California Pawnbroker's Association.
           
          2)Author's statement  .  According to the author, "This bill  
            attempts to curb the illegal trade in gold, silver, gems, and  
            other items that are subject to the pawn and secondhand dealer  
            license requirements.  Licensed secondhand dealers are  
            required to report to local law enforcement daily all  
            transactions of this type.  DOJ must also be notified daily.   
            Perhaps more importantly these items must be held for 30 days  
            for the purpose of inspection by law enforcement.  Law  
            enforcement knows exactly where to go to inspect because the  








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            items must be available at the permanent address of the  
            licensee.  None of the gold buying models mentioned above can  
            or do comply.  Additionally the bill describes to manner in  
            which police may put an unlimited number of 90-day "holds" on  
            merchandize suspected of being "lost, stolen, or embezzled"  
            and it should be noted that the police may physically take  
            possession of such items, but the status of the item is still  
            a hold, this preserves the property interest of the lender who  
            has perfected a lien on the property."  
             
          3)Regulation of secondhand dealers and pawnbrokers  .  A  
            secondhand dealer includes a person, business or corporation  
            whose main purpose is to buy, sell, trade, take in pawn,  
            accept for sale on consignment, or accept for auction,  
            secondhand tangible personal property.  Current law  
            specifically exempts certain individuals from the definition  
            of a secondhand dealer, including coin dealers, certain  
            auctioneers and certain appliance repair persons.  

            City and county licensing agencies have been delegated the  
            responsibility to implement the State Secondhand Dealer and  
            State Pawnbroker licensing process through local programs.  As  
            part of this implementation, a local licensing agency (usually  
            a sheriff or chief of police) is required to accept an  
            application from any person desiring to be licensed as a  
            secondhand dealer or pawnbroker within their jurisdiction.   
            Prior to the granting of a license, the local agencies are  
            required to submit the secondhand dealer or pawnbroker  
            "application package" to DOJ for processing.  DOJ completes  
                                                                                    the background check and issues the appropriate license number  
            to the local authority requesting the license.  An initial  
            application for local licensure consists of fingerprints, a  
            licensing fee and evidence of a surety bond.  Secondhand  
            dealers and pawnbrokers are required to renew their licenses  
            biannually and submit a new application packet each renewal.    


            Once secondhand dealers and pawnbrokers have received the  
            appropriate license from the local agency, in addition to any  
            other business licenses or permits needed to operate, they are  
            eligible to sell a wide variety of tangible personal property.  
             Under current law, if someone is operating as a secondhand  
            dealer without a license they are subject to punishment for  
            unlawful conduct.  If a person knows or should have known they  
            were committing a violation, they can be penalized by a fine  








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            of up to $1,500 or imprisonment in the county jail for two  
            months or both for the first offense, a fine of up to $5,000  
            and imprisonment in the county jail or both for the second  
            offence, and a fine of up to $25,000 and imprisonment in  
            county jail up to six months or both for the third offense.  

            This bill strengthens the penalties for operating without a  
            secondhand dealer's or pawnbroker's license by making  
            unlicensed activity part of the definitions of criminal  
            profiteering and organized crime.  The net result would be to  
            decrease the prevalence of unlicensed activity because of the  
            increased penalties, and also to allow law enforcement to  
            seize the assets of those operations and distribute them  
            between the local agencies responsible for instituting and  
            prosecuting the forfeiture.  

           4)Problems with unlicensed activity  .  There have been some  
            examples provided by the author's office noting a recent  
            increase in businesses that operate without a secondhand  
            dealer's or pawnbroker's license where sellers may quickly  
            obtain cash for property, often gold or other precious metals.  
             

          According to an August 10, 2010 article from The Daily News of  
            Los Angeles, "Law enforcement and local governments are  
            scrambling to shut down a shadow industry that has sprung from  
            the booming cash-for-gold business nationwide: Thieves are  
            snatching jewelry, then converting it into a quick payday at  
            the shops."  Unlicensed entities that promise "cash-for-gold"  
            are not reporting the items they receive to the appropriate  
            law enforcement entity, nor are they holding them for the  
            appropriate time, which may potentially destroy or eliminate  
            any chance for law enforcement to recover stolen or illegal  
            items.  

          In a September 22, 2012 news story in the San Bernardino County  
            Sun, it was reported that leaders in the City of Rialto have  
            placed a moratorium on new cash-for-gold shops due to an  
            increase of thefts.  According to the article, officials say  
            that robbers sell the stolen goods at such cash-for-gold  
            stores which are more lax than pawn shops in verifying the  
            merchandise brought in.  "Currently, pawn shops are required  
            to hold the items for 30 days before selling them, which gives  
            investigators time to find out if they are stolen."  









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          This bill would increase law enforcement's ability to remove the  
            profit from these unscrupulous businesses by allowing law  
            enforcement to deem such businesses to be "organized crime",  
            which would permit such agencies to seize and distribute the  
            assets of the business to the general funds of local  
            governments.  
             
           5)Reporting requirements for secondhand good  .  When secondhand  
            dealers or pawnbrokers take in items, whether buying outright  
            or loaning money and holding for collateral, they are required  
            to report daily or on the first working day after they have  
            taken possession of an item on a "JUS 123" standardized form  
            which must be completed for each item purchased, taken in  
            trade, taken in pawn or accepted for sale on consignment.  The  
            forms require very specific information including name and  
            identification of the seller, a description of the property,  
            (such as serial numbers or other identifying marks),  
            certification of ownership, certification that the seller's  
            knowledge of the item is correct, and a fingerprint.  Once  
            completed, a copy is provided to local law enforcement, and a  
            copy is retained by the dealer.  This is to help ensure that  
            items received by a secondhand dealer or pawnbroker are not  
            stolen.  
             
             Further, to protect the licensees and consumers who may have  
            been victims of crime of theft, any item received by a  
            secondhand dealer or pawnbroker is required to be held for 30  
            days. This allows sufficient time for the appropriate law  
            enforcement entities to review the items received and  
            determine if they have been reported stolen or are a part of  
            some other criminal probe.  

            This bill attempts to address the problem of individuals who  
            have not established a legitimate business relationship with  
            local law enforcement and are operating as a secondhand dealer  
            or pawnbroker without submitting the required paperwork or  
            holding items as required by current law by essentially making  
            the operation of these businesses without licenses a form of  
            organized crime.  This may help to protect consumers who have  
            had items stolen by prosecuting those unlicensed individuals  
            who do not follow the appropriate steps in current law and do  
            not hold or report the property for the appropriate law  
            enforcement background checks. 
             
             Currently, secondhand dealers and pawnbrokers must report on  








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            the standardized "JUS 123" form by hand.  AB 391 (Pan) Chapter  
            172, Statutes of 2012 required secondhand dealers and coin  
            dealers to help fund a new electronic reporting system which  
            was developed by DOJ.  Secondhand dealers and pawnbrokers will  
            utilize an electronic database in which they will enter the  
            information required in an electronic format, in lieu of  
            submitting the "JUS-123" and that information will be  
            available for all law enforcement agencies in a searchable  
            format.  Once the system is up and running, the information  
            may be easier for law enforcement to search and retrieve lost  
            or stolen property.  Currently, the uniform electronic  
            reporting system is still in the contracting/production phase,  
            and its implementation date is not certain.      
             
          6)Due process procedures for the "90 day hold"  .  Current law  
            allows a peace officer who has probable cause to believe  
            property in the possession of a secondhand dealer or pawn  
            broker is lost or stolen with the authority to place a hold on  
            the item for 90 days and requires the peace officer to provide  
            written notice about the item placed on hold.  This bill  
            updates the 90-day hold process by requiring law enforcement  
            to follow additional procedures when retrieving an item that  
            is thought to be lost, stolen or embezzled.  Current law  
            provides due process procedures for a pawnbroker to challenge  
            a competing claim to ownership of property seized by law  
            enforcement.  In an effort to encourage individual and  
            businesses to become actively licensed as a secondhand or  
            pawnbroker business, this bill updates and clarifies law  
            enforcement's existing authority to remove property and would  
            provide additional due process requirements for the final  
            disposition of property that is the subject of competing  
            claims by a purported property owner and pawnbroker.  

           7)Arguments in support  .  The California Pawnbrokers Association  
            writes in support, "The problem of illegal and unlicensed gold  
            buyers is affecting every community in California.  This  
            activity takes advantage of the public, and is an impediment  
            to the rightful return of stolen property, and makes effective  
            law enforcement and prosecution of many tangible personal  
            property crimes nearly impossible.  This bill will provide the  
            means for more vigorous prosecution of these crimes that are  
            afflicted upon the California citizenry."  

          8)Arguments in opposition  .  The California District Attorneys  
            Association (CDAA) writes in opposition, "CDAA is concerned  








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            with the language in the bill that governs the issuance of  
            search warrants?before an officer could make a seizure, this  
            bill would require that he or she has given the pawnbroker  
            written notification as part of placing the item on hold.   
            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."
           
          9)Double-referred  .  This bill is double referred to the Assembly  
            Public Safety Committee.  
           
          10)Comments for the Committee  .  The Committee should note that  
            the substantial majority of the content of this bill deals  
            with matters subject to the jurisdiction of the Assembly  
            Public Safety Committee.  As such, this Committee may wish to  
            focus its consideration on matters related to the licenses  
            themselves. 

          For example, the Committee may wish to consider whether or not  
            it is appropriate generally to increase the penalties for  
            unlicensed practice, given that serious penalties are already  
            available.  Moreover, the Committee may wish to consider  
            whether or not it is appropriate to directly equate unlicensed  
            practice with organized crime, absent some evidence of an  
            intention to engage in organized crime.  The Committee may  
            also wish to inquire of the author and sponsor to produce data  
            demonstrating the extent of the problem beyond isolated news  
            reports. Finally, the Committee may wish to discuss the  
            fragmentary nature of oversight for secondhand goods dealer  
            and pawnbroker licensees, and whether greater regulation of  
            these licensees is warranted. 

          Separately, the Committee may wish to discuss whether, and to  
            what extent, it is possible that individual hosts of private  
            "cash for gold" parties could unwittingly fall victim to the  
            expanded definitions such that a suburban Tupperware party  
            that dabbles in gold becomes - legally speaking - an organized  
            crime ring.    
           
          11)Previous legislation  .  AB 391 (Pan) Chapter 172, Statutes of  
            2012, requires secondhand dealers and coin dealers to report  








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            certain information using the electronic reporting system  
            developed by DOJ on and after the date that the system is  
            implemented.  

            AB 1796 (Galgiani) of 2012, would have included in the  
            definition of criminal profiteering activity the unlicensed  
            sale of tangible personal property or other secondhand goods,  
            including gold and other precious metals, without a license.   
            This bill failed passage in the Assembly Public Safety  
            Committee.

            AB 704 (Ma) of 2011 would have required that a person  
            conducting business as a secondhand dealer to provide  
            specified information to any peace officer upon demand allow  
            for the storage of the item for up to 90 days, and required an  
            impounding agency to satisfy specified requirements regarding  
            impounded property and further would have authorized 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.  This bill was held in the Assembly Judiciary  
            Committee. 

            SB 1520 (Schiff), Chapter 994, Statutes of 2000, makes the  
            reporting system for pawned and secondhand property more  
            effective for law enforcement purposes through development of  
            specified reporting categories and reporting in electronic  
            form.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Pawnbrokers Association (sponsor)
          California Police Chiefs Association, Inc. (04/15/13 version)
          One individual
           
            Opposition 
           
          California District Attorneys Association
          One individual

           Analysis Prepared by  :    Elissa Silva / B.,P. & C.P. / (916)  
          319-3301 









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