BILL ANALYSIS Ó
AB 318
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Date of Hearing: April 7, 2015
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 318
(Chau) - As Amended March 11, 2015
As Proposed to be Amended
SUBJECT: Lost money and goods: restoration to owner
KEY ISSUE: SHOULD the legislature establish a pilot program
that would, until 2021, authorize public transit agencies to
shorten the time they are required to store lost or unclaimed
bicycles for safekeeping and, for the first time, allow donation
of unclaimed bicycles to charitIES in lieu of holding a public
auction or sale?
SYNOPSIS
Under existing law, public transit agencies (PTAs) are required
to store and safeguard lost or misplaced personal property left
behind on buses, railcars and in their facilities for at least
90 days to give the owner sufficient opportunity to reclaim the
property. For most property that remains unclaimed after 90
days, current law requires the PTA to advertise notice of the
property in a newspaper of general circulation and prepare the
unclaimed property for sale at public auction. According to the
Los Angeles County Metropolitan Transportation Authority (LA
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Metro), the sponsor of this bill, these requirements are costly
and unsustainable because of the amount of lost property transit
agencies must store and eventually auction, particularly
bicycles because of their size and low rate of being claimed.
As proposed to be amended, this bill seeks to establish a
five-year pilot program to authorize PTAs to shorten the time
they are required to store lost or unclaimed bicycles, from 90
days to 45 days, and to donate to charity bicycles that go
unclaimed after 45 days without fulfilling publication or public
auction requirements. In response to concerns that bypassing
these requirements would fail to adequately ensure due process
or safeguard against potential mischief in disposing of private
property, the author proposes to amend the bill to: (1) require
publication of notice before any planned donation of unclaimed
bicycles; (2) require a transparent, public process for
determining charities to receive donations of unclaimed
bicycles; and (3) limit the donations to two occasions per year,
and limit the number of bicycles that may be donated to charity
to no more than 25% of the total number of unclaimed bicycles.
This bill does not seek to change current procedures or time
periods that apply to any other kind of property except for
bicycles, nor any procedures that apply to property held by any
department or agency other than public transit agencies. As
proposed to be amended, the pilot program would be scheduled to
sunset on January 1, 2021, and would require specified data to
be reported to the Judiciary Committees in both houses on or
before January 1, 2020, thus allowing the Legislature to
evaluate the pilot project one year before the scheduled sunset
date. This bill is supported by several public transit
agencies, who share LA Metro's cost concerns associated with
storing and handling lost and unclaimed property and who also
believe that donating the property to charity will result in
savings while benefitting the community at large. There is no
known opposition to the bill.
SUMMARY: Establishes a pilot program, until January 1, 2021,
under which a public transit agency (PTA) may donate to charity
a certain proportion of lost or unclaimed bicycles that go
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unclaimed after 45 days. Specifically, this bill:
1)Requires lost property valued at $100 or more that is found on
a vehicle of public conveyance or on public transit agency
property to be turned into the public transit agency rather
than the local police or sheriff's department. Further
requires the public transit agency to notify the owner, if
ascertainable, that it possesses the property and where it may
be claimed, and authorizes a reasonable charge to the owner to
defray the costs of storage and care of the property.
2)Establishes certain rules and procedures for PTAs to handle
lost property, other than bicycles, that mirror longstanding
existing rules for police and sheriff departments.
3)Establishes the parameters of a pilot program exclusively for
the disposal of lost and unclaimed bicycles that were found by
or turned into a PTA. Until January 1, 2021, the pilot
program would:
a) Require the PTA to restore a lost or unclaimed bicycle
to an owner who appears within 45 days, can prove
ownership, and pays reasonable charges.
b) Authorizes the PTA to donate bicycles unclaimed after 45
days to a qualified charitable organization, provided that
a notice of the planned donation is published in a
newspaper at least five days before the time fixed for the
donation.
c) Requires the notice to identify the period of time
during which the bicycles were found, the name of the
charity receiving the planned donation, and where the
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bicycles may be claimed prior to the donation.
d) Limits donation of unclaimed bicycles to two occasions
per year, and the number of bicycles donated to no more
than 25% of the total number of bicycles found or saved by
the PTA during the prior six months.
e) Requires the board of the PTA, after a public hearing,
to determine the charitable organizations that are
qualified to receive donations of unclaimed bicycles.
f) Establishes a five year sunset date for the pilot
program (until January 1, 2021) and requires participating
PTA's to report specified information to the Senate and
Assembly Judiciary Committees by the end of the fourth year
of the program's operation (i.e. on or before January 1,
2020).
EXISTING LAW:
1)Requires any person or any public or private entity that finds
and takes possession of any money, goods, or other personal
property, to inform the owner, if known, within a reasonable
time, and make restitution without compensation, except a
reasonable charge for saving and taking care of the property.
(Civil Code Section 2080. All further references are to this
code unless otherwise stated.)
2)Provides that if the owner is unknown or has not claimed the
property, the person saving or finding the property shall, if
the property is of the value of one hundred dollars ($100) or
more, within a reasonable time turn the property over to the
police department of the city where it was found (or to the
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sheriff's department of the county if found outside of city
limits), and shall make an affidavit stating when and where he
or she found or saved the property and describing it.
(Section 2080.1(a).)
3)Requires the police or sheriff's department to notify the
owner, if his or her identity is reasonably ascertainable,
that it possesses the property and where the property may be
claimed. Authorizes the police or sheriff's department to
require payment by the owner of a reasonable charge to defray
costs of storage and care of the property. (Section
2080.1(b).)
4)Provides that if the owner claims to property within 90 days
after it is received by the police or sheriff's department,
proves ownership of the property, and pays all reasonable
storage charges, the police or sheriff's department shall
return the property. (Section 2080.2.)
5)Provides that if the reported value of the property is $250 or
more and the owner does not appear within 90 days claim it,
the police or sheriff must publish a notice of the property at
least once in a newspaper of general circulation. Further
provides that if no owner appears to prove ownership after
seven days of publication, title to the property vests in the
finder or saver of the property, unless it was found by a
public agency employee in the course of employment, in which
case it must be sold at a public auction. (Section
2080.3(a).)
6)Provides that if the reported value of the property is less
than $250, and the owner does not appear within 90 days and
prove ownership, then title to the property vests in the
finder or saver of the property, unless it was found by a
public agency employee in the course of employment, in which
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case the property must be sold at a public auction. (Section
2080.3(b).)
7)Authorizes the police or sheriff's department to sell lost
property at a public auction upon proper notice, if the
property is commonly the subject of sale, when the owner, with
reasonable diligence, cannot be found, or, being found, the
owner refuses upon demand to pay the lawful charges for
storage when such charges amount to two-thirds of the
property's value, or alternatively when the thing is in danger
of perishing or of losing the greater part of its value.
(Section 2080.5.)
8)Authorizes public agencies to elect to come under these
provisions or to adopt their own reasonable regulations, as
long as the regulations require the following: (a) the agency
to hold lost property for at least three months; (b) any
unclaimed property will be sold at public auction to the
highest bidder; and (c) notice of the sale is published at
least five days in advance of the auction in a newspaper of
general circulation. Further provides that any property
remaining unsold after being offered at such public auction
may be destroyed or otherwise disposed of by the public
agency. (Section 2080.6.)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: Under existing law, public transit agencies (PTAs)
are required to store and safeguard lost or misplaced personal
property left behind on buses, railcars and in their facilities
for at least 90 days to give the owner sufficient opportunity to
reclaim the property. For most property that remains unclaimed
after 90 days, current law requires the PTA to prepare the
unclaimed property for sale at public auction and advertise
notice of the property in a newspaper of general circulation.
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According to the sponsor of this bill, the Los Angeles County
Metropolitan Transportation Authority (LA Metro):
In recent years, public transit agencies like LA Metro
have reached critical mass with the amount of
unclaimed property, particularly bicycles. The amount
of space required to store the bikes for 90 days has
become costly and unsustainable, not to mention the
use of staff time to inventory all the items and then
perform the public auction. Bikes are much larger
items and therefore take up a great deal of storage
space. This bill would remove burdening financial and
spatial constraints on transit agencies' staff and
facilities resources.
Proposed amendments establish a pilot program for unclaimed
bicycles held by public transit agencies. As proposed to be
amended, this bill establishes a five-year pilot program to
authorize public transit agencies to employ different, untested
procedures for handling unclaimed bicycles lost or left behind
on PTA vehicles and stations. Because PTAs have identified
bicycles as the primary item driving their increased storage and
auction-related costs, the proposed amendments are specifically
targeted towards addressing the burdens that apparently result
from an epidemic of unclaimed bicycles left on public transit
property. It is important to note that this bill does not seek
to change current procedures or time periods that apply to
property other than bicycles, nor does it affect any procedures
that apply to property held by departments or agencies other
than public transit agencies. Several proposed amendments to
the bill seek to make clear that the 90-day claim period and
other procedures under current law shall continue to apply to
all property held by police or sheriff's departments, as well as
all property other than bicycles that is turned over to a PTA.
Period to claim bicycles shortened from 90 days to 45 days.
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Under the proposed pilot program, PTAs are required to store
unclaimed bicycles for a minimum of 45 days to allow owners the
chance to appear and recover their property. Although the bill
currently in print provides for an even shorter 30-day period,
the author has agreed to a 45-day period instead - still half
the length of the 90-day period currently required by existing
law in response to concerns about due process. Proponents
contend that the 45 day period still provides a sufficient
opportunity for recovery, citing LA Metro-reported data
indicating that the average customer retrieval rate for bicycles
is about 20% (meaning up to 80% of bicycles are not claimed
within 90 days) and that the average time of recovery ranges
from just three to seven business days. In light of the
increased storage costs associated with bicycles because of
their size and data showing that few lost bicycles are claimed
in the last 45 days of the current 90-day recovery period, there
appears to be solid justification for allowing the shorter claim
period of 45 days for lost bicycles over the course of the pilot
program. The impact of the shorter recovery period will be
evaluated at the end of the five year trial period.
Background of publication and public auction requirements for
lost property. Under existing law, departments or agencies
holding property valued at $250 or more that is unclaimed after
90 days must provide notice by publication in a newspaper for
seven days to give the owner of the property a final opportunity
to come forward and recover the property. (Property valued at
less than $250 is not subject to the newspaper publication
requirement.) If no one comes forward and proves ownership of
the property after seven days of publication (or, for property
under $250, after 90 days of being unclaimed), then title to the
property vests in the person who found or saved the property,
unless the property was found in the course of employment by an
employee of a public agency. For property found by a public
agency employee (including PTA employees, clearly), title never
vests in the individual employee but instead the property is
required to be sold at public auction.
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The public auction requirement is fairly ubiquitous across the
various lost property statutes that govern police and sheriff
departments, universities, and state and local government
agencies. Simply put, the public auction requirement provides
an important safeguard against potential mischief. It prevents
an unscrupulous public employee from either gaining title to the
property he or she individually "found," or from surreptitiously
steering hundreds or thousands of dollars of unclaimed property
to an outside individual or organization who might have close
ties to the employee or agency.
In addition, the newspaper publication and public auction
requirements serve a due process-related function by providing a
last opportunity for recovery to a person who may have been
unable to "prove ownership," as is required under existing law,
in order to claim the property. For example, many people do not
register their bicycles with appropriate local authorities, and
therefore an owner may have difficulty proving a particular lost
bicycle belongs to him. At the public auction, however, this
person could potentially buy his bicycle back, or get a good
deal on a replacement model.
Pilot authority to donate a percentage of unclaimed bicycles to
charity instead of fulfilling existing publication and public
auction requirements. According to LA Metro, in May 2014, it
had to construct a temporary 7,500 square foot facility simply
to store bicycles. The agency reports that, on average, it
takes 500 to 600 bicycles into its possession every 90 days. It
states: "Despite this large amount of lost property, more than
80% of bikes remain unclaimed and thereby sold at auction. The
amount of space and staff time required to store, do inventory,
and auction off the bikes alone has become costly and
unsustainable." LA Metro reports that it receives only about
$30,000 gross from auctioning unclaimed bicycles per year, while
spending thousands more on storage, thus losing money because
the labor costs alone for running the lost and found facility
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and conducting the auctions far exceed that amount of revenue
taken in. Accordingly, the bill as currently in print seeks to
allow PTAs to completely bypass the newspaper publication and
public auction requirements, and instead donate all unclaimed
property to a charitable organization.
In response to the aforementioned concerns that bypassing these
important requirements would fail to adequately ensure due
process or safeguard against potential mischief in disposing of
lost property, the author proposes to amend the bill to do the
following: (1) require publication of notice before any planned
donation of unclaimed bicycles; (2) require a transparent,
public process for determining which charities will receive
donations of unclaimed bicycles; and (3) limit the donations to
two occasions per year, and limit the number of bicycles that
may be donated to charity without being subject to public
auction.
First, to preserve an opportunity for the owner to claim a lost
bicycle before it is donated to charity, the author proposes an
amendment that requires the PTA to publish notice of the planned
donation in a general circulation newspaper at least five days
before the donation is to occur. Specifically, the notice must
identify the time period when the bicycles which are planned to
be donated were found by the public transit agency, the name of
the charity receiving the donation, and where unclaimed bicycles
may be claimed prior to the date of donation. This information
is intended to alert an owner that a bicycle he or she lost
during a certain time period is about to be donated to a
specific charity identified by name in the notice, and provide a
final opportunity for the owner to appear and reclaim his or her
lost bicycle before it is donated. The proposed amendment
requiring publication of notice prior to a planned donation thus
helps address potential due process concerns that arise with
elimination of the public auction requirement.
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Second, to ensure that the charities chosen by the PTA to
receive donated bicycles are selected through a fair and
transparent process, the author proposes an amendment to ensure
that the board of the public transit agency will only select the
charitable organizations to receive donated bicycles after a
public hearing on the matter. These safeguards will help
prevent potential mischief in the disposal of unclaimed property
worth thousands of dollars.
Finally, the proposed amendments adopt an incremental rather
than wholesale change in policy, as is often appropriate when
conducting a pilot program. To this end, the number of bicycles
allowed to bypass the public auction process and be donated to
charity (after public notice and a final opportunity to claim
them) is capped at 25% of the total number of bicycles found or
saved by the PTA in the prior six months. The proposed
amendments also limit the number of auctions to a maximum of two
per year.
Sunset date and reporting requirements. As proposed to be
amended, the bill establishes a five year pilot program for
implementing these new policies, meaning that the pilot
authority to donate unclaimed goods to charity shall expire on
January 1, 2021. In addition, at the end of the fourth year (on
or before January 1, 2020), the bill requires certain
information to be reported to the two Judiciary Committees to
allow evaluation of the pilot project during the year leading up
to the trigger of the 2021 sunset clause.
ARGUMENTS IN SUPPORT: The California Transit Association urges
support of this bill, stating:
Transit agencies are responsible for a large amount of
lost property. In many cases, the property goes
unclaimed, adding an administrative cost by requiring
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the transit agency to store the property for 90 days
and then dispense with the property through public
auction. In 2014, approximately 4,200 items were left
behind on the Caltrain and SamTrans systems in the Bay
Area. Of these items, 65 percent were returned to the
owner. The remaining 1,500 items must be disposed of by
the transit system either through public auction or by
other means. In LA Metro's case, an average of 2,400
bikes per year are lost with roughly 80 percent going
unclaimed. Allowing a transit agency to donate any
unclaimed items to a charitable organization would
result in a significant cost savings while benefitting
the community.
REGISTERED SUPPORT / OPPOSITION:
Support
Los Angeles County Metropolitan Transportation Authority
(sponsor)
California Transit Association
Riverside Transit Agency
Opposition
None on file
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Analysis Prepared by:Anthony Lew / JUD. / (916) 319-2334