BILL ANALYSIS Ó
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair
2015 - 2016 Regular
Bill No: AB 1182 Hearing Date: July 14, 2015
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|Author: |Santiago |
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|Version: |May 5, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|JM |
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Subject: Secondhand Goods: Tangible Personal Property
HISTORY
Source: California Association of Resellers, Reusers and
Buyers
Prior Legislation:SB 762 (Hill) - Ch. 318, Stats. 2013
AB 391 (Pan), Ch. 172, Stats. 2012
SCR 63 (Yee) - Reso. Ch. 16., Stats. 2010
SB 1893 (Burton) - failed in Assembly Business
and Professions, 2004
SB 1520 (Schiff) - Ch. 994, Stats. 2000
Support: Sacramento Antique Faire; Californians Against Waste
Opposition:California Pawnbrokers Association (unless amended);
California State Sheriffs' Association; Secondhand
Collectors Association (unless amended)
Assembly Floor Vote: 79 - 0
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PURPOSE
The purpose of this bill is to: 1) clearly define items that
constitute a significant class of stolen goods that secondhand
dealers must report to law enforcement; and 2) require the
Attorney General to annually update the list of such stolen
property and post the list on the Attorney General's website.
Existing law:
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. (Bus. and Prof. Code § 21626, subd. (a).)
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. (Bus. and Prof. Code § 21626.5.)
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. (Bus. and Prof. Code § 21627, subd.
(a).)
States that tangible personal property also includes, but is not
limited to, the following:
All tangible personal property, new or used, including
motor vehicles, received in pledge as security for a loan
by a pawnbroker;
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,
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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. (Bus. and
Prof. Code § 21627, subd. (b).)
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. (Bus. and Prof. Code §
21627, subd. (c))
Specifies that "tangible personal property" does not include
coins, monetized bullion, or commercial grade ingots of gold,
silver, or other precious metals, as specified. (Bus. and Prof.
Code § 21627, subd. (d).)
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. (Bus. and Prof. Code § 21628)
Requires the report to be legible, prepared in English,
completed where applicable, and include, but not be limited to,
the following information: (Bus. and Prof. Code § 21628)
The name and current address of the intended seller or
pledger of the property;
The identification of the intended seller or pledger, as
specified;
A complete and reasonably accurate description of
serialized property, including, but not limited to: serial
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number and other identifying marks or symbols,
owner-applied numbers, manufacturer's named brand, and
model name or number;
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;
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.
A certification by the intended seller or pledger that
to his or her knowledge and belief the information is true
and complete;
A legible fingerprint taken from the intended seller or
pledger, as specified; and,
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.
Requires the DOJ, in consultation with appropriate local law
enforcement agencies, to develop clear and comprehensive
descriptive categories denoting tangible personal property, as
specified. (Bus. and Prof. Code § 21628, subd. (j).)
Requires the DOJ to develop a single, statewide, uniform,
electronic reporting system to be used to transmit required
secondhand dealer reports, as specified. (Bus. and Prof. Code §
21628, subd. (j)(1).)
Requires secondhand and coin dealers to hold for a period of 30
days any tangible personal property acquired before disposing of
the property. Pawnbrokers must wait for a period of four months
before disposing of tangible personal property that is acquired.
For purposes of this Section, tangible personal property means
property that must be reported to law enforcement upon
acquisition by the reporting entity or party. (Bus. and Prof.
Code § 21636.)
This bill:
Narrows the definition of "tangible personal property" to mean
only the forms of property specifically listed or enumerated in
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current law: serialized property, property with personalized
initials or inscriptions, property that bears evidence of
previously having a serial number, initials or inscription, and
all personal property commonly sold by secondhand dealers that
is determined by the Attorney General to constitute a
statistically significant class of stolen goods.
Eliminates the statutory provision stating that the definition
of tangible personal property is not limited to the specifically
listed or enumerated property.
Requires the DOJ to annually update its list of personal
property commonly sold by secondhand dealers that constitutes a
statistically significant class of stolen goods and post the
list on the DOJ's website.
Provides that a county law enforcement agency may use its own
list of TPP for purposes of the requirement that secondhand
dealers report acquisitions of TPP to law enforcement.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the past eight years, this Committee has scrutinized
legislation referred to its jurisdiction for any potential
impact on prison overcrowding. Mindful of the United States
Supreme Court ruling and federal court orders relating to the
state's ability to provide a constitutional level of health care
to its inmate population and the related issue of prison
overcrowding, this Committee has applied its "ROCA" policy as a
content-neutral, provisional measure necessary to ensure that
the Legislature does not erode progress in reducing prison
overcrowding.
On February 10, 2014, the federal court ordered California to
reduce its in-state adult institution population to 137.5% of
design capacity by February 28, 2016, as follows:
143% of design bed capacity by June 30, 2014;
141.5% of design bed capacity by February 28, 2015; and,
137.5% of design bed capacity by February 28, 2016.
In February of this year the administration reported that as "of
February 11, 2015, 112,993 inmates were housed in the State's 34
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adult institutions, which amounts to 136.6% of design bed
capacity, and 8,828 inmates were housed in out-of-state
facilities. This current population is now below the
court-ordered reduction to 137.5% of design bed capacity."(
Defendants' February 2015 Status Report In Response To February
10, 2014 Order, 2:90-cv-00520 KJM DAD PC, 3-Judge Court, Coleman
v. Brown, Plata v. Brown (fn. omitted).
While significant gains have been made in reducing the prison
population, the state now must stabilize these advances and
demonstrate to the federal court that California has in place
the "durable solution" to prison overcrowding "consistently
demanded" by the court. (Opinion Re: Order Granting in Part and
Denying in Part Defendants' Request For Extension of December
31, 2013 Deadline, NO. 2:90-cv-0520 LKK DAD (PC), 3-Judge Court,
Coleman v. Brown, Plata v. Brown (2-10-14). The Committee's
consideration of bills that may impact the prison population
therefore will be informed by the following questions:
Whether a proposal erodes a measure which has contributed
to reducing the prison population;
Whether a proposal addresses a major area of public safety
or criminal activity for which there is no other
reasonable, appropriate remedy;
Whether a proposal addresses a crime which is directly
dangerous to the physical safety of others for which there
is no other reasonably appropriate sanction;
Whether a proposal corrects a constitutional problem or
legislative drafting error; and
Whether a proposal proposes penalties which are
proportionate, and cannot be achieved through any other
reasonably appropriate remedy.
COMMENTS
1.Need for This Bill
According to the author:
With the passage of AB 391 [(Pan) Chapter, 172,
Statutes of 2012], secondhand dealers (who do not sell
serialized goods or goods which are statistically
found through crime reports [to the DOJ] to constitute
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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.
2.Electronic Reporting Database
In 2012, AB 391 (Pan) 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. Licensed secondhand dealers and
pawnbrokers use must the new system - the California Automated
Pawn and Secondhand Dealer System (CAPPS) - to submit the
requisite tangible personal property transaction information to
the DOJ.
A March 19, 2015 letter from DOJ to pawnbrokers and secondhand
dealers stated:
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The California Department of Justice (DOJ) was
mandated pursuant to Assembly Bill 391 (Stats 2012,
Ch. 172, Pan) to develop and implement a statewide,
uniform electronic reporting system that would allow
for the electronic reporting of property transaction
reports (Pawnbroker/Secondhand Dealer Reports - JUS
123). The initial California Pawn and Secondhand
Dealer System (CAPSS), which presented core
functionality to meet the Legislative mandate was
implemented by the DOJ in December 2014. Since that
time, the DOJ and its contractor have been working
diligently on phase-in improvements. The DOJ is happy
to announce these improvements are nearing readiness.
This exciting iteration will provide pawn and
secondhand dealers with vastly improved user
capabilities. A few of these capabilities include an
auto registration component, multiple property
transaction bulk upload, and an advanced licensing
application for law enforcement which will streamline
the licensing process. The DOJ anticipates several
waves of improvement releases between April and June.
The utilization of the electronic database is not intended
to change the kinds of property that must be reported by
secondhand dealers. Nevertheless, the CAPSS Website
includes an Excel table with a code number for reporting
each of over 800, from accordions to zithers. The list
includes bee hives, beer kegs, defibrillators, ladders,
pavers, parking meters, pottery wheels, roller blades,
shocks, tillers, timing light, toilets and wheel chairs.
Clearly this does not constitute the list of items that
must be reported by secondhand dealers. However, it does
appear that under the CAPSS system any kind of property
that becomes commonly stolen could be readily reported.
3.Determining What Property is Frequently Stolen and Subject to
Reporting by Secondhand Dealers
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Arguably, the optimal list of reportable goods would include
readily reportable and identifiable property that can be matched
against police reports of stolen goods. An overly broad
reporting requirement could be onerous for secondhand dealers,
yet produce data that is mostly of no value to law enforcement -
a larger haystack with a few useful needles. An overly broad
and onerous requirement could reduce compliance, paradoxically
reducing reports of recoverable stolen property.
The only kinds of property the secondhand goods reporting
statute specifically describes are serialized and initialed
property. The statute also requires secondhand dealers to
report property "commonly sold by secondhand dealers which
statistically is found through crime reports to the Attorney
General to constitute a significant class of stolen goods." The
statute directs the Attorney General to update the list
periodically. The current list has not been updated for some
time and includes only jewelry and sterling silver.
DOJ is required by statute to collect data from law enforcement
agencies about "the amount and types of offenses known to the
public authorities." DOJ has great latitude as to how data must
be reported. DOJ could direct law enforcement agencies to
include in reports the kinds of property stolen in theft,
burglary and robbery offenses. (Pen. Code §§ 13000, 13002 and
13020.) It can be argued that the current statute requires DOJ
to statistically determine significant classes of stolen goods
commonly sold by secondhand dealers from reports submitted
annually by all state law enforcement agencies. However, it
could also be argued that changing the California crime
reporting system to serve the purpose of secondhand goods
reports could be expensive and overly time-consuming for law
enforcement agencies and DOJ.
The author's office and the sponsor have reported that DOJ
representatives have stated that DOJ could use crime data
published by the Federal Bureau of Investigation (FBI), as those
reports include the kinds of property taken in larcenies. The
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FBI maintains the Uniform Crime Reporting (UCR.) system.<1> The
FBI publishes four UCR reports annually. Two of the reports are
"Crime in the United States" and the "National Incident-Based
Reporting System" (NIBRS). The reports include a compilation
and analysis of data submitted in mandatory reports by law
enforcement agencies across the country. However, FBI reports
may not include the property stolen in burglaries. Exclusion of
property taken in burglaries could produce inaccurate data on
the kinds of property that are most often stolen.
To address concerns that the UCR would not reflect the types of
property most often stolen in California, the statute could
authorize DOJ, in addition to crime reports submitted by
California law enforcement agencies, to use other relevant and
reliable sources of data, including UCR reports.
As noted above, the governing statute requires DOJ to
statistically determine property constituting a "significant
class of stolen goods" commonly sold by secondhand dealers. The
statute does not define "significant." Nor does the statute
provide how DOJ would determine property that is "commonly sold
by secondhand dealers." The sponsor and author have proposed
that "significant" be defined as property constituting 10% of
the kinds of property reported in the UCR. A 10% standard
would be arbitrary to some extent. Further, until relevant data
is analyzed, it cannot be determined if a 10% would produce
useful data that could be readily reported.
The electronic reporting system that is currently being
implemented will provide consistency in the form and analysis of
reporting. Arguably, the requirements for the contents of the
reports should be similarly consistent if the full benefits of
the electronic system in finding stolen property and prosecuting
thieves are to be realized.
DOES THE EXISTING SECONDHAND GOODS REPORTING STATUTE REQUIRE DOJ
TO ANALYZE CRIME DATA LAW ENFORCEMENT AGENCIES ARE REQUIRED TO
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<1> Casualty insurance organizations track stolen property
claims with some specificity and detail. And have found that the
most commonly stolen items included in loss claims are jewelry,
electronics and apparel, with women's purses leading the last
category.
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REPORT TO DOJ IN ORDER TO DETERMINE SIGNIFICANT CLASSES OF
STOLEN GOODS COMMONLY SOLD BY SECONDHAND DEALERS?
IN COMPILING A LIST OF COMMONLY STOLEN GOODS, SHOULD DOJ BE
GIVEN DISCRETION TO USE RELIABLE AND RELEVANT DATA SOURCES?
4.Sponsor's Proposal that the Governing Statute Explicitly
Authorize Secondhand Dealers to Report Goods by Transaction,
not by each Item of Property
The sponsor has noted that secondhand dealers often obtain goods
in sets of property. This is especially true for purchases of
property from an estate sale. The dealer may buy a set of
furniture, china or other combined goods. In such cases, the
dealer should be allowed to obtain a single identification and
fingerprint of the seller, not a separate identification and
print for each item. It does appear that law enforcement, in
practice, allows reporting of goods as a set. For example, the
Attorney General's CAPSS Website specifically states that the
system will have " multiple property transaction bulk upload"
capacity and that "[t]here is no limit to the number of items
that can be included as part of a single property transaction
report. ?The Customer signature and thumbprint will be
required." <2>However, the law does not explicitly allow
multiple transaction reporting.
SHOULD THE GOVERNING STATUTE SPECIFICALLY AUTHORIZE SECONDHAND
DEALERS TO REPORT PURCHASES OF GOODS IN MATCHED SETS OR OTHER
STANDARD COMBINATIONS?
5.State Law Currently Preempts Local Reporting Ordinances
The Court of Appeal, Third Appellate District, recently
considered whether a secondhand dealer or pawnbroker must comply
with a local ordinance requiring reporting of property that need
not be reported under state law. The court held that a
Sacramento County ordinance imposing additional reporting
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<2> https://oag.ca.gov/secondhand/capss
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requirements was preempted by state law:
In Sacramento County Code section 4.30.030,
subdivisions A through G, the ordinance prescribes the
collection of the information specified under various
state laws, including section 21628. However, as noted
above, Sacramento County Code section 4.30.030,
subdivision H adds additional reporting requirements.
As we have explained, to the extent the ordinance is
duplicative of state law, it is not preempted. But
under the authority of Malish, supra, 84 Cal.App.4th
at pages 735, 736, it cannot add to the reporting
requirements of state law. Having demonstrated that
it is likely to prevail on this issue (without
rejoinder from defendants) and is at risk of
irreparable injury from enforcement of the ordinance,
CLSDA is entitled to have the preliminary injunction
include a restraint on enforcing Sacramento County
Code section 4.30.030, subdivision H as well.
(Collateral Loan and Secondhand Dealers Association v.
County Of Sacramento (2014) 223 Cal.App. 4th 1032,
1042-1043.)
6.Amendment to Strike Reference in the Bill to the Authorization
for each County Sheriff's Department to use its own List of
Property Subject to Reporting
This bill would essentially eliminate state preemption of local
ordinances requiring reporting of acquisitions of secondhand
property until the Attorney General provides a list of
frequently stolen items that must be reported. It would appear
that state preemption would apply at that point.
Authorizing each sheriff to determine what TPP must be reported
by secondhand goods dealers could be confusing and burdensome to
a secondhand dealer who does business in more than one county.
The Bay Area, for example is generally described as being
composed of nine counties. Further, having a different list of
TPP in each county could produce a database with a myriad of
categories, and perhaps an overly voluminous database that could
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be difficult to effectively search. Further, a county-by-county
system conflicts with the Legislature's stated purpose of having
a "uniform, statewide, state-administered program." (Bus. &
Prof. Code § 21625.)
Stakeholders and interested parties have told Committee staff
that the author agreed in the Assembly Business and Professions
Committee to strike the county-by-county reporting provision.
SHOULD THIS AMENDMENT BE MADE?
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