BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 632 Hearing Date: June 15,
2015
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|Author: |Eggman |
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|Version: |June 8, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Mark Mendoza |
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Subject: Secondhand dealers and coin dealers: reporting:
handheld electronic devices.
SUMMARY: Permits a secondhand dealer or pawnbroker to submit the
International Mobile Station Equipment Identity (IMEI) or the
mobile equipment identifier (MEID) or other unique number
assigned to a handheld electronic device in lieu of the serial
number for reporting purposes and defines a "handheld electronic
device".
Existing law:
1)Defines a "secondhand dealer" as 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. (Business and Professions Code (BPC) §
21626 (a))
2)States 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))
3)Requires every secondhand dealer or coin dealer, as specified,
to report daily, or on the first working day after receipt or
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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 purchased,
taken in trade, taken in pawn, accepted for sale on
consignment, or accepted for auctioning, to the chief of
police or to the sheriff, as specified. (BPC § 21628)
4)Requires the report to be legible, prepared in English,
completed where applicable, and include, but not be limited
to, the following information:
a) The name and current address of the intended seller or
pledger of the property;
b) The identification of the intended seller or pledger, as
specified;
c) A complete and reasonably accurate description of
serialized property, including, but not limited to: serial
number and other identifying marks or symbols,
owner-applied numbers, manufacturer's named brand, and
model name or number;
d) A complete and reasonably accurate description of
non-serialized property, including, but not limited to:
size, color, material, manufacturer's pattern name (when
known), owner-applied numbers and personalized
inscriptions, and other identifying marks or symbols;
e) A certification by the intended seller or pledger that
he or she is the owner of the property or has the authority
of the owner to sell or pledge the property;
f) A certification by the intended seller or pledger that
to his or her knowledge and belief the information is true
and complete;
g) A legible fingerprint taken from the intended seller or
pledger, as specified; and,
h) When a secondhand dealer complies with all of the
provisions of this section, he or she shall be deemed to
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have received from the seller or pledger adequate evidence
of authority to sell or pledge the property, as specified.
(BPC § 21628)
This bill:
1)Permits a secondhand dealer to use the International Mobile
Station Equipment Identity (IMEI), the mobile equipment
identifier (MEID), or other unique identifying number
assigned to that electronic device by the manufacturer, in
place of the serial number for reporting purposes.
2)Defines a "handheld electronic device" to mean any portable
device that is capable of creating, receiving, accessing, or
storing electronic data or communications and includes, but
is not limited, to a cellular phone, smartphone or tablet.
3)Clarifies that a person may remotely obtain information and
verify the identification of the seller or pledger using
technology, including, but not limited to, cameras or
software, or both.
4)Provides that if an IMEI, MEID, or other unique identifying
number assigned to a device is unavailable by the time
required for reporting, the report will be updated with an
identifying number assigned to that device as soon as
reasonably possible, but no later than 10 working days after
receipt of purchase of the handheld electronic device.
5)Makes other minor technical and clarifying amendments.
FISCAL
EFFECT: Unknown. This bill is keyed "fiscal" by the
Legislative Counsel.
COMMENTS:
1. Purpose. This Author is the sponsor of the bill. According
to the Author, this bill "updates California's secondhand
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dealer laws to increase recycling of handheld electronic
devices. According to the U.S. Environmental Protection
Agency, in 2012 the United States generated 3.4 million tons
of electronic waste. Of that amount only 29 percent was
recycled. Handheld electronic devices (smart phones, cell
phones, tablets, MP3 players, etc.) make up an increasing
proportion of electronic waste. Typically unused handheld
electronic devices are not recycled and often end up in a
landfill. The low rate of recycling is largely due to the
difficulty involved with recycling e-waste.
For example, under existing statute, entities that purchase
used electronic devices for refurbishment or recycling are
required to obtain a secondhand dealers' license and, as
such, must follow all secondhand dealer laws. However,
California's secondhand dealer laws were largely crafted in
the early 1980s and do not reflect current technology or
practice. More specifically, secondhand dealers must report
serial numbers for all serialized property they receive to
law enforcement. This is a problem because not all
electronic devices are marked with a "serial number." Some
manufacturers use IMEI or MEID numbers in place of serial
numbers. This bill expands the definition of 'serial number'
for handheld electronic devices to allow secondhand dealers
to report to law enforcement the IMEI, MEID, or other unique
identifying number assigned to that device by the device
manufacturer."
2. 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.
Current law specifically exempts certain individuals from the
definition of a secondhand dealer, including coin dealers,
certain auctioneers, and certain appliance repair persons.
Traditional secondhand dealer transactions typically take
place through face-to-face encounters where applicable state
and local laws apply. Under current law, secondhand dealers
are required to report all secondhand tangible personal
property that comes into their possession daily or on the
first working day after receipt of the item on forms or
through the electronic database (once completely functional).
3. Reporting Requirements. Secondhand dealers are required to
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report items that they have acquired including all items
which bear a serial number such as electronics. The Author
notes that not all electronic devices today bear a serial
number as many of these devices such as mobile phones have
moved away from a serial number to a more unique IMEI or MEID
number. This bill simply allows a secondhand dealer or
pawnbroker to report the IMEI or MEID number in lieu of a
serial number when they are reporting certain electronic
items to law enforcement as required. In order to clarify
what those items are, that may contain an IMEI or MEID
number, this bill defines a "handheld electronic device" to
mean any portable device that is capable of creating,
receiving, accessing or storing electronic data or
communications; items such as cell phones, smartphones and
tablets. This bill does not change any of the current
reporting requirements for secondhand dealers, but instead
expands the categories of information which may be reported
to law enforcement as required.
Unwanted cell phones are regulated as universal waste
electronic devices. Under California's Cell Phone Recycling
Act of 2004, retailers who sell cell telephones are required
to take them back from consumers. While many individuals may
be willing to recycle their used handheld electronic devices,
such as cell phones, for free, many may prefer to sell them
to a secondhand dealer. A New York Times article, A Second
Chance for Idle Electronics, noted that while most old
electronics "are destined for the recycling heap (You do
recycle, right?). As for the others - the phones, tablets,
game consoles, high-end digital cameras and other electronic
goodies bought this decade - that's cash sitting neglected in
those drawers. Beats by Dr. Dre Studio headphones that sell
for $270 new could be worth $200. A Wi-Fi-only 16-gigabyte
iPad 2 that costs $400 new could fetch $300 or more." In an
effort to alleviate any potential reasons for secondhand
dealers to not accept these items, this bill will revise the
definition of "handheld electronic device" and permit
secondhand dealers to use the IMEI or MEID numbers when
reporting these items in place of their serial numbers. The
Author notes that requiring the use of a serial number for
reporting purposes may dissuade potential secondhand dealers
from accepting these products because the serial number is
often hard to access as it may be part of the internal
components of a device.
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4. IMEI and MEID. IMEI and MEID numbers may be referred to as
device-specific identifiers and can be used to help wireless
carriers and cell phone manufactures identify specific
devices. IMEI numbers are typically found on handheld
electronic devices with cellular capacity while MEID numbers
are typically found on other items such as tablets without
cellular capacity. According to IMEI.org, if a mobile phone
is stolen or lost, and it is reported to the mobile service
provider, that provider will block the device to access their
network and can even block access to other networks and the
use of other regions. Most cell phone carriers will have a
record of the IMEI number. The police maintain a record of
all stolen phones and use the IMEI numbers to identify the
devices. Further, IMEI.org explains that every smartphone
and other mobile station equipment have an MEID identifier
that is "burned" into the gadget which cannot be modified.
The Federal Communications Commission recommends people write
down their IMEI or MEID numbers in case their handheld
electronic device is stolen. The goal of the secondhand
reporting requirements is to help provide law enforcement
agencies with a means to curtail the selling of stolen
property and to facilitate its recovery by means of a uniform
statewide, state- reporting program. This bill provides
secondhand dealers an alternative means to report "serial
numbers" by allowing the report of IMEI, MEID, and other
unique identifying numbers for certain handheld electronic
devices such as cell phone or smartphones.
5. EcoATM. EcoATM Inc. is the only automated kiosk that
collects unwanted or used cell phones, tablets and MP3
players for instant cash. These kiosks are registered with
the DOJ as secondhand dealers. Each EcoATM includes
extensive security features and processes and also works
collaboratively with law enforcement in every jurisdiction
they work in. The kiosk includes 3 high-resolution cameras,
software that detects a "kill switch", a thumbprint scanner,
software that captures the serial number, and an ID
validator. Above all, a remote, live attendant is located in
the company's headquarters that verifies and approves ever
transaction in real-time by comparing the image of the
scanned license to the real-time webcam photos to verify that
the ID belongs to the customer. No transaction can be
completed without the approval of a live verifier. With the
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development of this kiosk, the statute needs to be updated to
address this state of the art technology.
6. Related Legislation. AB 236 (Lackey) of the current
legislative session, adds pawnbrokers and secondhand dealers
to the list of persons who are not weighmasters and makes
other technical changes. ( Status : This bill is currently
referred to the Senate Committee on Business, Professions and
Economic Development .)
AB 1182 (Santiago) of the current legislative session,
narrows the current definition of tangible personal property,
as specified, and requires the Department of Justice (DOJ) to
annually update the list of items which represent a
significant class of stolen goods and post it on its website.
( Status : This bill is currently referred to the Senate
Committee on Public Safety.)
AB 391 (Pan, Chapter 172, Statutes of 2012), established the
process and fee schedule to implement a single, statewide,
uniform electronic reporting system for pawnbrokers and
secondhand dealers, as specified, administered by the DOJ.
7. Arguments in Support. The Californians Against Waste writes
that "while Californians lead the nation in recycling of most
materials-including many electronic wastes, the recycling of
the ubiquitous cell phone has languished, at the same time
that the number of discarded phones has skyrocketed. Despite
a 2006 state law requiring cell phone retailers to take back
old phones for recycling, many consumers are not ready to
recycle their old phone at the time of purchase or when they
upgrade?.[This bill] will update California's secondhand
dealer laws to foster ongoing efforts to increase recycling
rates for handheld electronic devices."
SUPPORT AND OPPOSITION:
Support:
California Asian Pacific Chamber of Commerce
California Chamber of Commerce
California Police Chiefs Association
Californians Against Waste
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EcoATM
Latin Business Association
Planning and Conservation League
TechNet
Opposition:
None of file as of June 9, 2015.
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