BILL ANALYSIS Ó
AB 1182
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Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Susan Bonilla, Chair
AB 1182
Santiago - As Amended April 21, 2015
SUBJECT: Secondhand goods: tangible personal property.
SUMMARY: 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.
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)
Section 21626 (a))
2)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 Section 21626.5)
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3)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 Section 21627(a))
4)States that tangible personal property also includes, but is
not limited to, the following: (BPC Section 21627(b))
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 a pawnbroker or which,
at the time of such purchase, 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 DOJ to constitute a significant class of stolen
goods. A list of such personal property shall be supplied
by the DOJ to all local law enforcement agencies. The list
shall be reviewed periodically by the DOJ to insure that it
addresses current problems with stolen goods.
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5)Specifies that "tangible personal property" does not include
any new goods or merchandise purchased from a bona fide
manufacturer, distributor, or wholesaler of such new goods or
merchandise by a secondhand dealer, and requires a secondhand
dealer to retain for one year from the date of purchase, and
make available for inspection by any law enforcement officer,
any receipt, invoice, bill of sale or other evidence of
purchase of such new goods or merchandise. (BPC Section
21627(c))
6)Specifies that "tangible personal property" does not include
coins, monetized bullion, or commercial grade ingots of gold,
silver, or other precious metals, as specified. (BPC Section
21627(d))
7)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 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 Section 21628)
8)Requires the report to be legible, prepared in English,
completed where applicable, and include, but not be limited
to, the following information: (BPC Section 21628)
a) The name and current address of the intended seller or
pledger of the property;
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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,
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h) When a secondhand dealer complies with all of the
provisions of this section, he or she shall be deemed to
have received from the seller or pledger adequate evidence
of authority to sell or pledge the property, as specified.
9)Requires the DOJ, in consultation with appropriate local law
enforcement agencies, to develop clear and comprehensive
descriptive categories denoting tangible personal property, as
specified. (BPC Section 2168(j))
10)Requires the DOJ to develop a single, statewide, uniform,
electronic reporting system to be used to transmit required
secondhand dealer reports, as specified. (BPC Section
21628(j)(1)).
THIS BILL:
1) Narrows the definition of "tangible personal property" to
mean only those elements listed in current law.
2) Requires the DOJ, to update its list annually of personal
property commonly sold by secondhand dealers which is
statistically found through crime reports to constitute a
significant class of stolen goods and post the list on the
DOJ's website.
FISCAL EFFECT: Unknown. This bill is keyed fiscal by the
Legislative Counsel.
COMMENTS:
1)Purpose. This bill is sponsored by the California Association
of Resellers, ReUsers and Buyer s. According to the author,
"?with the passage of AB 391[(Pan) Chapter, 172, Statutes of
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2012], secondhand dealers (who do not sell serialized goods or
goods which are statistically found through crime reports to
the [DOJ] to constitute a significant class of stolen goods to
be licensed as a secondhand dealer) will now need to take the
name and current address of the intended seller of the
property, take the identification of the intended seller or
pledger and a legible fingerprint from the intended seller, to
report daily, and to retain for 30 days all tangible personal
property reported.
As outlined, California law imposes all of the above-mentioned
regulatory requirements on every secondhand dealer, regardless
of how large the number of identical items or how low the
value of each item bought and sold. As written, separate
individual reports will need to be made for every used book,
every old doorknob, every piece of colored glass, every old
name badge or game piece (amongst thousands of other items)
sold within the state of California. There is also no
consideration made for items that have been gathered over the
past several decades for which re-sellers would be unable to
locate the initial owners (for purposes of gaining their
information, fingerprints, and identification)?.With this in
mind, [this bill] seeks to clarify existing law, provide law
enforcement useful data they need in order to curtail the
dissemination of stolen property and to facilitate the
recovery of such property, and remove an unnecessary burden on
secondhand dealers."
1)Background. This bill seeks to revise the definition of
"tangible personal property" by narrowing the list of items
which are considered to be "tangible personal property." By
narrowing the list of items considered "tangible personal
property," this bill will limit the category of secondhand
items that need to be reported to local law enforcement on a
daily basis. Currently, "tangible personal property" is
defined as the items referenced in BPC Section 21627(b), but
current law does not restrict the definition to only those
items listed. This bill will revise the definition by
specifying that "tangible personal property" only includes the
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items that are listed under BPC 21627(b), such as items that
bear a serial number and all personal property commonly sold
by secondhand dealers which are found through crime reports to
the DOJ that constitute a significant class of stolen goods.
This bill does not alter the reporting requirements for
secondhand dealers if they acquire an item that would meet the
revised definition of tangible person property.
According to the DOJ, the regulation of secondhand dealers
occurred as a result of legislation in 1980 in an effort to
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-administered secondhand
dealer licensing and reporting program.
Pursuant to BPC Section 21641, local entities such as police
chiefs, the sheriff, or where appropriate the police
commission have the responsibility to incorporate the
Secondhand Dealer and Pawnbroker licensing process into their
local programs. It is the responsibility of the local
licensing agency to administer, maintain, and enforce state
law regarding the secondhand dealer or pawnbroker licenses.
Persons, entities, or corporations wishing to conduct business
as a secondhand dealer or pawnbroker, must first apply for a
specific license to conduct the business with the local
licensing agency (chief of police or sheriff) who then
receives background check results and a license number issued
by the DOJ's Secondhand Dealer and Pawnbroker Unit.
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.
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Secondhand Dealer Transactions and Reporting Requirements.
Traditional 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. Under current law, secondhand dealers are
required to report daily or on the first working day after the
receipt or purchase of secondhand personal property on forms
or through the electronic database (once completely
functional), all of the secondhand tangible personal property
which has been purchased, taken in trade, taken in pawn, or
accepted for sale or consignment. Because the electronic
database is not currently available, the reports of tangible
personal property items are currently required to be submitted
directly to local law enforcement. As noted by the author,
because the definition of personal tangible property is so
broad, the secondhand dealers feel compelled to report all
secondhand transition items, even those which may be of minor
material value such as door knobs, used books or old game
pieces.
DOJ List. The intent of narrowing the definition of "tangible
personal property" is to limit the number of secondhand
transactions that must be reported by secondhand dealers to
those which are of significance for crime tracking purposes.
As noted, the definition of "tangible personal property"
includes all personal property that bears a serial number or
personalized initials or inscription and those items found on
a list compiled by the DOJ. Currently, BPC Section 21627(3)
requires the DOJ to provide its list of personal property
which statistically is found through crime reports to
constitute a significant class of stolen goods to local law
enforcement. Depending on the size, type, and number of items
reported on the list as determined by the DOJ, it could
significantly expand or reduce those items which are
considered "tangible personal property." Currently, there are
only two items on the DOJ's Secondhand Dealer Report
including: jewelry and sterling silverware. This limited list
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means that the definition of "tangible personal property" will
only include those two items along with anything that has a
serial number.
According to the author, the Federal Bureau of Investigation
provides a list of stolen goods which contains an expansive
list of items including tangible goods such as handbags, pelts
or skins for apparel purposes, and bikes. It is unclear how
often or the last time DOJ updated its list of items found
through crime reports to be statistically significant.
However, this bill will require the DOJ to update its list
annually which depending on the process for obtaining the
necessary data for its list, could expand or reduce those
items that need to be reported annually.
Electronic Reporting Database. In 2012, AB 391 (Pan) was
enacted and established a new requirement that secondhand
dealers and pawnbrokers electronically report to the DOJ all
secondhand tangible property which has been purchased, taken
in trade, taken in pawn, accepted for sale on consignment or
accepted for auctioning. The enacted statute mandates
licensed secondhand dealers and pawnbrokers use the new
system, the California Automated Pawn and Secondhand Dealer
System (CAPPS), to submit the requisite tangible personal
property transaction information to the DOJ. The utilization
of the electronic database will not change the reporting
requirements for secondhand dealers. This bill would
potentially decrease the number of items that a secondhand
dealer would be required to report daily to local law
enforcement who utilize the information to look for stolen
property.
The author contends that traditional secondhand dealers
typically obtain their "tangible personal property" from
estate sales and re-sell that property at brick-and-mortar
locations, antique fairs or on the Internet. These venues are
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typically not magnets for criminal activity or the re-sale of
stolen property.
Attorney General Opinion. The current definition of "tangible
personal property" is seen as being too broad. Because the
definition states items, "including, but not limited to," it
provides for a wide interpretation of what must be included in
any secondhand transaction-it could potentially include
anything. Because of the reporting requirements, it is
necessary for secondhand dealers to understand what is
included under the definition of "tangible personal property."
For instance, in 1996, an Attorney General opinion was requested
to determine whether or not baseball trading cards constitute
"tangible personal property". According to the opinion,
"Baseball trading cards purchased by a card shop do not
constitute tangible personal property for purposes of
regulation under the Secondhand Goods Law" (79
Ops.Cal.Atty.Gen. 103). Given the broad definition of
"tangible personal property" there may be other items which
fall into the potential category of "tangible personal
property," but without a formal DOJ opinion, secondhand
dealers must operate as if all property is required to be
reported.
3) Current Related Legislation. AB 632 (Eggman) of the current
legislative session, would authorize specified unique
identifying numbers to be used as the serial number reported
for handheld electronic devices, as specified. STATUS: This
bill is pending in the Assembly Committee on Business and
Professions.
4) Prior Related Legislation. 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.
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ARGUMENTS IN SUPPORT:
The California Association of Resellers, Reusers, and Buyers
writes in support, "We want to make sure law enforcement has the
data they need to go after stolen goods. But current law
requires the reporting of many goods that are not necessary for
that purpose and impose unreasonable burden on legitimate
secondhand dealers like me. The solution to this problem is for
the Legislature to clarify exisitng law to provide that
"tangible personal property" means all secondhand tangible
personal property which bears a serial number or personalized
initials or inscriptions which is statistically found through
crime reports to the Attorney General to constitute a
significant class of stolen goods."
ARGUMENTS IN OPPOSITION:
None of file.
POLICY ISSUE FOR CONSIDERATION:
While the intent of narrowing the definition of "tangible
personal property is to mitigate a reporting burden on
secondhand dealers who tend to deal with a wide variety of used
goods such as doorknobs and colored glass, which may not be
related to commonly stolen good, due to the limited number of
items currently disclosed on the DOJ's list of commonly stolen
items, it may be prudent to authorize a county law enforcement
agency to provide a supplemental list to secondhand dealers
within their jurisdiction if they choose. In addition, the
author may wish to consider establishing a deadline for the DOJ
to update its list in order to provide consistency across
jurisdictions.
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AMENDMENT(S):
On page 2, line 16, after "3", insert: (A)
On page 2, line 23, after "good." Insert: (B) Only until the
Attorney General provides the first annual update of that list
of personal property, a county law enforcement agency may use
its own list.
REGISTERED SUPPORT:
California Association of Resellers, Reusers, & Buyers (sponsor)
Californians Against Waste
Numerous individuals
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Elissa Silva / B. & P. / (916) 319-3301
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