BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1182| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1182 Author: Santiago (D), et al. Amended: 8/18/15 in Senate Vote: 21 SENATE PUBLIC SAFETY COMMITTEE: 6-1, 7/14/15 AYES: Hancock, Anderson, Leno, Liu, Monning, Stone NOES: Glazer SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 79-0, 6/1/15 - See last page for vote SUBJECT: Secondhand goods: tangible personal property SOURCE: California Association of Resellers, Reusers and Buyers DIGEST: This bill defines items that constitute a significant class of stolen goods that secondhand dealers must report to law enforcement upon acquisition and requires the Attorney General to annually update and post on her website the list of property that secondhand dealers must report. ANALYSIS: 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 AB 1182 Page 2 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).) 2) Specifies that "secondhand dealers" do not include 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.) 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. (Bus. and Prof. Code § 21627, subd. (a).) 4) States that tangible personal property also includes, but is not limited to, the following: 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. (Bus. and Prof. Code § 21627, subd. (b).) 5) Specifies that "tangible personal property" does not include any new goods or merchandise purchased from a bona fide AB 1182 Page 3 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)) 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. (Bus. and Prof. Code § 21627, subd. (d).) 7) Requires every secondhand dealer or coin dealer, as defined, 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) 8) 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) 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 AB 1182 Page 4 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 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. (Bus. and Prof. Code § 21628, subd. (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. (Bus. and Prof. Code § 21628, subd. (j)(1).) 11)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: 1)Eliminates the statutory provision stating that the definition of tangible personal property is not limited to the specifically listed or enumerated property. 2)Defines "tangible personal property" to mean only the forms of property specifically listed or enumerated in 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 that the Attorney General statistically AB 1182 Page 5 determines through the "Crime in California Report" to constitute a statistically significant class of stolen goods. 3)Defines "a statistically significant class of stolen goods" as those items found to constitute more than 10% of property reported as stolen in the annual "Crime in California" report. 4)Requires the Attorney General 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 Attorney General's website. 5)Specifies that a secondhand goods dealer need only verify and record the identity of the person selling property once per transaction, not as to each item sold in a transaction, although each item obtained by the dealer must be reported. Background 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 do so. A March 19, 2015 letter from DOJ to pawnbrokers and secondhand dealers stated: [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 ?The initial California Pawn and Secondhand Dealer System (CAPSS)? was implemented by the DOJ in December 2014. ?DOJ and its contractor have been working diligently on phase-in improvements [and] ?announces [that] these improvements are nearing readiness. ?A few of CAPPS capabilities include an auto registration component, multiple property transaction bulk upload, and an advanced licensing application for law enforcement [to] ?streamline the licensing process. AB 1182 Page 6 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 items, 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. 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. An overly broad 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 can 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 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." The statute also does not provide how DOJ is to determine which property is "commonly sold by secondhand dealers." The bill was amended in Senate AB 1182 Page 7 Public Safety to provide that "significant" be defined as property constituting 10% of the kinds of property reported stolen as determined by and through the "Crime in California" report published annually by DOJ and to delete the reference to goods commonly sold by secondhand dealers. The CAPPS electronic reporting system 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. The sponsor has noted that secondhand dealers often obtain goods in sets or matched collections. 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. This bill specifically authorizes secondhand dealers to verify the identity of the seller once per transaction. 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 requirements was preempted by state law. (Collateral Loan and Secondhand Dealers Association v. County Of Sacramento (2014) 223 Cal.App.4th 1032, 1042-1043.) FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified 8/26/15) California Association of Resellers, Reusers and Buyers (source) Antiques by the Bay Californians Against Waste City of Alameda Home Consignment Center Sacramento Antique Faire AB 1182 Page 8 OPPOSITION: (Verified 8/26/15) California Police Chiefs Association California State Sheriffs' Association Secondhand Collectors Association (unless amended) ASSEMBLY FLOOR: 79-0, 6/1/15 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, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Beth Gaines Prepared by:Jerome McGuire / PUB. S. / 8/26/15 14:40:38 **** END ****