Amended in Assembly March 28, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1751


Introduced by Assembly Member Low

(Coauthors: Assembly Members Bigelow,begin insert Calderon,end insert Cooper,begin insert Dababneh,end insert Gatto,begin insert Jones,end insert Jones-Sawyer, Lackey, Mathis, Mullin,begin insert Olsen,end insert Rodriguez,begin delete and Waldronend deletebegin insert Waldron, and Wilkend insert)

(Coauthors: Senators Anderson, Berryhill, Block, Hill, Mendoza, Morrell, Nguyen, and Vidak)

February 2, 2016


An act to amend Section 21628 of, to repeal Section 21628.1 of, and to repeal and add Section 21630 of, the Business and Professions Code, relating to secondhand goods, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 1751, as amended, Low. Secondhand goods.

Existing law provides for the regulation of secondhand dealers and coin dealers, as defined. Existing law makes it unlawful for a person to engage in the business of a secondhand dealer without a license issued by the chief of police, the sheriff, or, where appropriate, the police commission. Existing law requires a local law enforcement agency to issue a license to engage in the business of a secondhand dealer or pawnbroker to an applicant who meets designated criteria. Existing law authorizes the local licensing authority and the Department of Justice to charge an initial licensure fee and a renewal fee, as specified. Existing law requires a secondhand dealer to report, as specified, to the chief of police or sheriff all secondhand “tangible personal property,” as defined, purchased, taken in trade, taken in pawn, accepted for sale on consignment, or accepted for auctioning. Existing law requires the report to include, among other things, the identification of the intended seller or pledger of the property, verified by the person taking the information by specified methods. Existing law requires the reporting of this information to the Department of Justice through a single, statewide, and uniform electronic reporting system. Existing law requires the Department of Justice to develop descriptive categories and secondhand dealers and coin dealers to use these categories in their reports.

This bill would eliminate the requirements that the Department of Justice develop, and secondhand dealers and coin dealers use, descriptive categories in their reports of acquired tangible personal property. Instead, the bill would require the Department of Justice to accept the plain text property descriptions commonly recognized and utilized by the pawn and secondhand dealer industries. The bill would require the Department of Justice to encode the plain text property descriptions, as specified, and would prohibit the Department of Justice from using funds collected from the initial licensing fee for these purposes. This bill would prohibit the Department of Justice, chiefs of police, and sheriffs from requiring secondhand dealers to report anybegin insert additionalend insert information other than that whichbegin delete Section 21628 of the Business and Professions Code specifies.end deletebegin insert is required by these provisions. The bill would require that the single, statewide, and uniform electronic reporting system be implemented and operated in compliance with the Administrative Procedure Act and prohibit the Department of Justice from taking any action with respect to the implementation, operation, or maintenance of the electronic reporting system by adoption of an emergency regulation.end insert

Existing law provides an exception to the reporting requirement for the acquisition of the same property from the same customer within 12 months of a reported transfer, except when submission of the report is specifically requested in writing by the local authorities.

This bill would expand the reporting requirement exception to all acquisitions of the same property from the same customer within 12 months of a reported transfer.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

(a) It is the intent of the Legislature to clarify
2that pawnbrokers and other secondhand dealers are to report their
3acquisition of tangible personal property received in pledge, trade,
4consignment, or auction or by purchase using plain text, in
5descriptive language historically used in the pawn and secondhand
6industries when reporting to the single, statewide, and uniform
7electronic reporting system operated by the Department of Justice,
8or if not yet implemented in their respective jurisdictions, on paper
9forms sent to the local police chief or sheriff of the jurisdiction in
10which the secondhand dealer is physically located.

11(b) It is further the intent of the Legislature that by specifying
12this manner of reporting, it will relieve all secondhand dealers and
13pawnbrokers of the inherent costs and burdens imposed under
14existing law that requires these businesses to report their daily
15acquisitions of secondhand tangible personal property on paper
16forms limited to a single transaction, or where the electronic
17reporting system is implemented, the cost associated with
18converting industry standard descriptions to specific law
19enforcement categories, the ongoing costs of training to that
20standard, and the costs of implementing software to maintain that
21standard.

22(c) Further, it is the intent of the Legislature that the Department
23of Justice shall continue to accept the plain text descriptive
24language historically used in the pawn and secondhand industries
25and shall have the continuing obligation to convert those
26descriptions as may be required by law enforcement databases in
27order to protect the integrity of law enforcement databases. Itbegin insert isend insert
28 the intent of the Legislature that only properly trained law
29enforcement personnel of the Department of Justice or local law
30enforcement classify and encode for law enforcement databases
31property reported by pawnbrokers and secondhand dealers and
32that the cost of the classification or the training of law enforcement
33personnel not be funded by pawnbrokers or secondhand dealers.

34

SEC. 2.  

Section 21628 of the Business and Professions Code,
35as amended by Section 1 of Chapter 169 of the Statutes of 2015,
36is amended to read:

37

21628.  

(a) Every secondhand dealer or coin dealer described
38in Section 21626 shall report daily, or on the first working day
P4    1after receipt or purchase of secondhand tangible personal property,
2on forms or through an electronic reporting system approved by
3the Department of Justice, all secondhand tangible personal
4property, except for firearms, which he or she has purchased, taken
5in trade, taken in pawn, accepted for sale on consignment, or
6accepted for auctioning, to the electronic reporting system operated
7by the Department of Justice, or until such time as this system is
8operational in the jurisdiction where the secondhand dealer is
9located, on paper forms sent to the chief of police or to the sheriff,
10in accordance with the provisions of Sections 21630 and 21633
11and subdivision (d). The report shall be legible, prepared in
12English, completed where applicable, and include only the
13following information:

14(1) The name and current address of the intended seller or
15pledger of the property.

16(2) The identification of the intended seller or pledger. The
17identification of the seller or pledger of the property shall be
18verified by the person taking the information, who may use
19technology, including, but not limited to, cameras or software, or
20both, to obtain information and verify identity remotely. The
21verification shall be valid if the person taking the information
22reasonably relies on any one of the following documents, provided
23that the document is currently valid or has been issued within five
24years and contains a photograph or description, or both, of the
25person named on it, and, where applicable, is signed by the person,
26and bears a serial or other identifying number:

27(A) A passport of the United States.

28(B) A driver’s license issued by any state or Canada.

29(C) An identification card issued by any state.

30(D) An identification card issued by the United States.

31(E) A passport from any other country in addition to another
32item of identification bearing an address.

33(F) A Matricula Consular in addition to another item of
34identification bearing an address.

35(3) (A) A complete and reasonably accurate description of
36serialized property, including, but not limited to, the following:
37serial number and other identifying marks or symbols,
38owner-applied numbers, manufacturer’sbegin delete namedend deletebegin insert nameend insert brand, and
39model name or number. Watches need not be disassembled when
40special skill or special tools are required to obtain the required
P5    1information, unless specifically requested to do so by a peace
2officer. A special tool does not include a penknife, caseknife, or
3similar instrument and disassembling a watch with a penknife,
4caseknife, or similar instrument does not constitute a special skill.
5In all instances where the required information may be obtained
6by removal of a watchband, then the watchband shall be removed.
7The cost associated with opening the watch shall be borne by the
8pawnbroker, secondhand dealer, or customer.

9(B) In the case of the receipt or purchase of a handheld electronic
10device by a secondhand dealer, the serial number reported pursuant
11to subparagraph (A) may be the International Mobile Station
12Equipment Identity (IMEI), the mobile equipment identifier
13(MEID), or other unique identifying number assigned to that device
14by the device manufacturer. If none of these identifying numbers
15are available by the time period required for reporting pursuant to
16this subdivision, the report shall be updated with the IMEI, MEID,
17or other unique identifying number assigned to that device by the
18device manufacturer as soon as reasonably possible but no later
19than 10 working days after receipt or purchase of the handheld
20electronic device.

21(C) For the purpose of this paragraph, “handheld electronic
22device” means any portable device that is capable of creating,
23receiving, accessing, or storing electronic data or communications
24and includes, but is not limited to, a cellular phone, smartphone,
25or tablet.

26(4) A complete and reasonably accurate description of
27nonserialized property, including, but not limited to, the following:
28size, color, material, manufacturer’s pattern name (when known),
29owner-applied numbers and personalized inscriptions, and other
30identifying marks or symbols. Watches need not be disassembled
31when special skill or special tools are required to obtain the
32required information, unless specifically requested to do so by a
33peace officer. A special tool does not include a penknife, caseknife,
34or similar instrument and disassembling a watch with a penknife,
35caseknife, or similar instrument does not constitute a special skill.
36In all instances where the required information may be obtained
37by removal of a watchband, then the watchband shall be removed.
38The cost associated with opening the watch shall be borne by the
39pawnbroker, secondhand dealer, or customer.

P6    1(5) A certification by the intended seller or pledger that he or
2she is the owner of the property or has the authority of the owner
3to sell or pledge the property.

4(6) A certification by the intended seller or pledger that to his
5or her knowledge and belief the information is true and complete.

6(7) A legible fingerprint taken from the intended seller or
7pledger, as prescribed by the Department of Justice. This
8requirement does not apply to a coin dealer, unless required
9pursuant to local regulation.

10(b) (1) When a secondhand dealer complies with all of the
11provisions of this section, he or she shall be deemed to have
12received from the seller or pledger adequate evidence of authority
13to sell or pledge the property for all purposes included in this
14article, and Division 8 (commencing with Section 21000) of the
15Financial Code.

16(2) In enacting this subdivision, it is the intent of the Legislature
17that its provisions shall not adversely affect the implementation
18of, or prosecution under, any provision of the Penal Code.

19(c) Any person who conducts business as a secondhand dealer
20at any gun show or event, as defined in Section 478.100 of Title
2127 of the Code of Federal Regulations, or its successor, outside
22the jurisdiction that issued the secondhand dealer license in
23accordance with subdivision (d) of Section 21641, may be required
24to submit a duplicate of the transaction report prepared pursuant
25to this section to the local law enforcement agency where the gun
26show or event is conducted.

27(d) (1) The Department of Justice shall recognize and accept
28the plain text property descriptions generally accepted in the pawn
29and secondhand industries provided by secondhand dealers, as has
30been the longstanding practice of chiefs of police and sheriffs when
31they receive paper reports from secondhand dealers. The
32Department of Justice shall have the continuing duty to encode
33the plain text property descriptions received by pawnbrokers and
34secondhand dealers for law enforcement databases in order for
35those descriptions to be useful for law enforcement purposes. Funds
36collected pursuant to Section 21642.5 shall not be used by the
37Department of Justice for the encoding or to train personnel to
38encode these descriptions.

39(2) With the consultation by the Department of Justice with
40local law enforcement agencies and representatives from the
P7    1secondhand dealer businesses, pursuant to Resolution Chapter 16
2of the Statutes of 2010, and upon the availability of sufficient funds
3in the Secondhand Dealer and Pawnbroker Fund created pursuant
4to Section 21642.5, the department shall promptly develop a single,
5statewide, uniform electronic reporting system to be used to
6transmit these secondhand dealer reports.

7(3) (A) Except as otherwise provided in this section, any report
8required of a secondhand dealer shall be transmitted by electronic
9means.

10(B) Until the date that the Department of Justice implements
11the single, statewide, uniform electronic reporting system described
12in paragraph (2), each secondhand dealer may continue to report
13the information required by this section under the reporting
14categories described in paragraph (1) in paper format on forms
15approvedbegin delete ofend delete or provided by the Department of Justice. Chiefs of
16police and sheriffs continuing to receive paper forms shall also
17continue to recognize and accept the plain text property
18descriptions generally recognized in the pawn and secondhand
19industries.

20(C) On and after the date that the Department of Justice
21implements the single, statewide, uniform electronic reporting
22system described in paragraph (2), each secondhand dealer shall
23electronically report using that system the information required
24by this section under the reporting standard described in paragraph
25(1), except that for the first 30 days following the implementation
26date, each secondhand dealer shall also report the information in
27paper format as described in subparagraph (B).

28(D) Unless specifically identified in this section, the Department
29of Justice, chiefs of police, and sheriffs shall not require a
30secondhand dealer to include any additional information concerning
31the seller, the pledger, or the property received by the secondhand
32dealer in the report required by this section.

begin insert

33
(E) The single, statewide, and uniform electronic reporting
34system required by this chapter shall be implemented and operated
35in compliance with the Administrative Procedure Act (Chapter
363.5 (commencing with Section 11340) of Part 1 of Division 3 of
37Title 2 of the Government Code). In implementing and operating
38the single, statewide, and uniform electronic reporting system
39required by this chapter, the Department of Justice, chiefs of police,
40and sheriffs shall comply with Sections 21637 and 21638.
P8    1Notwithstanding any other law, the Department of Justice shall
2not take any action with respect to the implementation, operation,
3or maintenance of the electronic reporting system required by this
4chapter by adoption of an emergency regulation.

end insert

5(4) A coin dealer shall report the information required by this
6section under the reporting standard described in paragraph (1) on
7a form developed by the Attorney General that the coin dealer
8shall transmit each day by facsimile transmission or by mail to the
9chief of police or sheriff. A transaction shall consist of not more
10than one item.

11(5) For purposes of this subdivision, “item” shall mean any
12single physical article. However, with respect to a commonly
13accepted grouping of articles that are purchased as a set, including,
14but not limited to, a pair of earrings or place settings of china,
15silverware, or other tableware, “item” shall mean that commonly
16accepted grouping.

17(6) Nothing in this subdivision shall be construed as excepting
18a secondhand dealer from the fingerprinting requirement of
19paragraph (7) of subdivision (a).

20(e) Nothing in this section shall be construed to exempt a person
21licensed as a firearms dealer pursuant to Sections 26700 to 26915,
22inclusive, of the Penal Code from the reporting requirements for
23the delivery of firearms pursuant to Sections 26700 to 26915,
24inclusive, of the Penal Code.

25

SEC. 3.  

Section 21628.1 of the Business and Professions Code
26 is repealed.

27

SEC. 4.  

Section 21630 of the Business and Professions Code
28 is repealed.

29

SEC. 5.  

Section 21630 is added to the Business and Professions
30Code
, to read:

31

21630.  

(a) A secondhand dealer shall electronically transmit
32to the Department of Justice’s single, statewide, uniform electronic
33reporting system on the date of transaction or, if not then possible
34due to an electrical, telecommunications, or other malfunction, as
35soon as reasonable thereafter, the report of acquisition of tangible
36personal property as required by Section 21628.

37(b) Notwithstanding Section 21628, submission of a tangible
38property acquisition report is not required if the report of an
39acquisition of the same property from the same customer has been
40submitted within the preceding 12 months.

P9    1(c) If the electronic reporting system operated by the Department
2of Justice has not been implemented in the jurisdiction where the
3secondhand dealer is located, the report shall be submitted to the
4chief of police of the city or his or her designee within the territorial
5limits of the incorporated city in which the secondhand dealer is
6located. If the transaction takes place outside the territorial limits
7of an incorporated city in which the secondhand dealer is located,
8the report shall be submitted to the sheriff of the county or his or
9her designee.

10

SEC. 6.  

This act is an urgency statute necessary for the
11immediate preservation of the public peace, health, or safety within
12the meaning of Article IV of the Constitution and shall go into
13immediate effect. The facts constituting the necessity are:

14In order to make the single, statewide, uniform electronic system
15a cost savings for secondhand dealers and pawnbrokers, the plain
16text property descriptions historically utilized by these industries
17must be accepted by the Department of Justice, just as these plain
18text descriptions have historically been accepted by chiefs of police
19and sheriffs.

20Further, to protect the integrity of law enforcement databases,
21it is necessary to specify that only trained law enforcement
22personnel shall input classification codes of property reported by
23these businesses, not the businesses themselves.



O

    98