BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 236|
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CONSENT
Bill No: AB 236
Author: Lackey (R)
Amended: 4/15/15 in Assembly
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 6/15/15
AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 78-0, 5/14/15 (Consent) - See last page for
vote
SUBJECT: Weighmasters: exemptions: pawnbrokers and secondhand
dealers
SOURCE: California Pawnbrokers Association
DIGEST: This bill adds pawnbrokers and secondhand dealers to
the list of persons who are not weighmasters and makes other
technical changes.
ANALYSIS:
Existing law:
1)Defines a "weighmaster" to mean any person who, for hire or
otherwise, weighs, measures, or counts any commodity and
issues a statement or memorandum of the weight, measure or
count which is used as the basis for either the purchase or
sale of that commodity or charge for service.
(Business and Professions Code (BPC) BPC § 12700)
AB 236
Page 2
2)Specifies that the following persons are not weighmasters:
(BPC § 12701)
a) Retailers weighing, measuring or counting commodities
for sale by them in retail stores directly to consumers;
b) Producers of agriculture commodities or livestock, as
specified, when no charge is made for the weighing, or when
no signed or initiated statement or memorandum is issued of
the weight upon which a purchase or sale of the commodity
is based;
c) Common carriers issuing bills of lading, as specified;
d) Milk samplers and weighers, as specified;
e) Persons who measure the amount of oil, gas, or other
fuels for purposes of royalty computation and payment, or
other operations of fuel and oil companies and their retail
outlets;
f) Newspaper publishers weighing or counting newspapers for
sale to dealers or distributors;
g) Textile maintenance establishments, as specified;
h) County sanitation districts; as specified;
i) Facilities that handle medical waste, as specified;
j) Persons who purchase scrap metal or salvage materials
pursuant to a nonprofit recycling program, as specified;
aa) Licensed pest control operators;
bb) Retailers or recycling centers established solely for
the redemption of empty beverage containers; as defined in
the Public Resources Code, as specified; and,
cc) Any log scaler who performs log scaling functions, as
specified.
AB 236
Page 3
3)Requires an applicant for a weighmaster's license, who is a
recycler or junk dealer, as specified, or performing services
on behalf of a recycler or junk dealer, to pay additional
licensing fees to the California Department of Food and
Agriculture (CDFA), as specified. (BPC § 12704)
4)Defines a "secondhand dealer" to mean "any person,
co-partnership, firm, or corporation whose business includes
buying, selling, trading, taking in pawn, accepting for sale
on consignment, accepting for auctioning, or auctioning
secondhand tangible personal property," and specifies that a
"secondhand dealer" does not include a coin dealer or
participant at gun shows or events, as specified. (BPC §
21626 (a))
5)Specifies that "secondhand dealers" are not persons who
perform the services of an auctioneer for a fee or salary, or
persons whose business is limited to the reconditioning and
selling of major household appliances, as long as specified
conditions are met. (BPC § 21626.5)
6)Provides 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)).
7)Defines a pawnbroker as "every person engaged in the business
of receiving goods, including motor vehicles, in pledge as
security for a loan." (Financial Code § 21000).
This bill:
1)Specifies that a pawnbroker or secondhand dealer, who is
weighing property that is acquired and reports the acquisition
of the property as specified, is not a weighmaster.
2)Clarifies that the weighmaster's requirements for junk dealers
and recyclers do not apply to pawnbrokers.
AB 236
Page 4
3)States the intent of the Legislature is to clarify that
licensed pawnbrokers and secondhand dealers are not
weighmasters and declares that the clarification is necessary
based on the CDFA's administrative interpretation of SB 485
(Calderon, Chapter 518, Statutes of 2013), placing pawnbrokers
and secondhand dealers within the meaning of weighmasters.
Background
Pawnbrokers and secondhand dealers. 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. Existing law specifically exempts certain individuals
from the definition of a secondhand dealer, including coin
dealers, certain auctioneers and certain appliance repair
persons. According to the National Pawnbrokers Association, the
core of a pawn store's business is making collateral loans by
securing something of value. The pawn store may have other
business elements such as retail sales. However, pawnbrokers
focus on lending money. Customers bring in an item of value,
and the pawnbroker offers a loan based on a percentage of the
item's estimated value. The pawnbroker then keeps the item
until the customer repays the loan with interest and any
additional fees that may apply. Pawn stores are regulated on a
federal, state, and local level. On average, customers receive
only a portion of the item's retail value. The average loan
amount nationally is $150. The sponsor of this bill contends
that pawnbrokers typically value the item based on several
factors and not weight alone.
Pawn broker and secondhand dealer transactions. Traditional
pawn and secondhand dealer transactions typically take place
through face-to-face encounters where applicable state and local
laws can apply, such as California's 30-day hold requirement.
In 2012, AB 391 (Pan, Chapter 172, Statutes of 2012) was enacted
and established a new requirement that secondhand dealers and
pawnbrokers electronically report to the Department of Justice
all secondhand tangible property which has been purchased, taken
in trade, taken in pawn, accepted for sale on consignment or
accepted for auctioning. The new electronic database is in the
process of development.
AB 236
Page 5
Weighmasters. Enforcement of California's weights and measures
laws and regulations is the responsibility of the Division of
Measurement Standards (DMS) under the CDFA. Weights and
measures officials have the authority to issue citations for
misdemeanor and infraction violations involving weights and
measures laws. The CDFA is authorized to inspect all
weighmasters, including those of junk dealers and recyclers, to
ensure compliance with recordkeeping and reporting requirements
with relation to the issuance of weighmaster certificates.
According to the CDFA, most pawnbrokers are not required to
obtain a weighmaster's certificate unless they are conducting
business services which require a weighmaster's license. The
sponsor notes that the majority of pawnbroking businesses do not
overlap with the requirements that would trigger a weighmaster's
license.
In 2013, SB 485 increased the amount of information that must be
provided by a junk dealer or recycler on an application for a
new weighmaster's license or renewal in order to provide both
the CDFA and the county sealers with better information to
determine if a junk dealer or recycler business is operating a
legitimate business.
The current license fee a weighmaster is required to pay to the
CDFA for each license year, depending on location, is: $75 for
a weighmaster operating at a fixed location; $30 for each
additional fixed location; and $200 if the weighmaster is
operating at other than a fixed location. SB 485 enhanced that
fee by requiring a junk dealer or recycler to pay an additional
$500 fee for each fixed location or other location where it
operates to cover costs associated with the investigative work
performed by the DMS to review the additional material submitted
on the application for a weighmaster's license or renewal.
The author and sponsor explain that the pawnbrokers and
secondhand dealers are being required to pay the additional $500
fee which was established for junk dealers. BPC Section 21603
explicitly states that pawnbrokers are not junk dealers. This
bill explicitly exempts pawnbrokers from the additional $500 fee
- which was specifically required for junk dealers and
recyclers.
AB 236
Page 6
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified7/1/15)
California Pawnbroker's Association (source)
West Coast Chapter of the Institute of Scrap Recycling
Industries, Inc.
OPPOSITION: (Verified7/1/15)
None received
ARGUMENTS IN SUPPORT: The California Pawnbroker's Association
is the sponsor of this bill and writes that "pawnbrokers are not
commodity dealers, recyclers, or junk dealers; we loan money on
a multitude of factors other than metal weights and we already
report to DOJ all reportable transactions and pay a large
biannual fee to do so."
West Coast Chapter of the Institute of Scrap Recycling
Industries, Inc. argues that "SB 485 [Calderon, 2013] was never
intended to encompass secondhand dealers or pawn brokers as it
is being interpreted by the Department of Food and Agriculture.
AB 236 clarifies this misinterpretation of the law."
ASSEMBLY FLOOR: 78-0, 5/14/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
AB 236
Page 7
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Linder, Medina
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
7/1/15 16:33:35
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