BILL ANALYSIS �
SB 762
Page 1
SENATE THIRD READING
SB 762 (Hill)
As Amended August 21, 2013
Majority vote
SENATE VOTE :31-2
BUSINESS & PROFESSIONS 12-0 PUBLIC
SAFETY 6-0
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|Ayes:|Gordon, Bocanegra, |Ayes:|Ammiano, Melendez, |
| |Campos, Dickinson, | |Jones-Sawyer, Quirk, |
| |Eggman, Hagman, Holden, | |Skinner, Waldron |
| |Maienschein, Mullin, | | |
| |Skinner, Ting, Wilk | | |
| | | | |
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APPROPRIATIONS 16-0
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|Ayes:|Gatto, Harkey, Bigelow, |
| |Bocanegra, Bradford, Ian |
| |Calderon, Campos, Eggman, |
| |Gomez, Hall, Holden, |
| |Linder, Pan, Quirk, |
| |Wagner, Weber |
|-----+--------------------------|
| | |
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SUMMARY : Clarifies the interests of licensed pawnbrokers and
secondhand dealers relating to the seizure and disposition of
property during a criminal investigation or case. 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:
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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
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.
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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
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
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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.
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)Provides that the return of property by a law enforcement
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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.
21)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.
22)Makes other technical, conforming and clarifying amendments.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, any costs associated with this legislation should be
minor and absorbable within existing resources.
COMMENTS :
1)Purpose of the bill . This bill 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. This bill is
sponsored by the California Pawnbroker's Association.
2)Author's statement . According to the author, "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 items must be available at the permanent
address of the licensee. [This] 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."
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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 the Department of Justice (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
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.
4)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
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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.
Analysis Prepared by : Elissa Silva / B.,P. & C.P. / (916)
319-3301
FN: 0002087