Amended in Assembly April 25, 2016

Amended in Assembly April 18, 2016

Amended in Assembly March 28, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1751

Introduced by Assembly Member Low

(Coauthors: Assembly Members Bigelow, Calderon, Cooper, Dababneh, Gatto, Jones, Jones-Sawyer, Lackey, Mathis, Mullin, Olsen, Rodriguez, Waldron, and Wilk)

(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, begin insert making an appropriation therefor, end insert 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 begin delete prohibit the Department of Justice from using funds collected from the initial licensing fee for these purposes. end delete begin insert end insert begin insert require that necessary costs incurred by the department in mapping the plain text property descriptions received by pawnbrokers and secondhand dealers to any law enforcement database be funded by the Secondhand Dealer and Pawnbroker Fund, thereby making an appropriation. end insert This bill would prohibit the Department of Justice, chiefs of police, and sheriffs from requiring secondhand dealers to report any additional information other than that which 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. The bill would also require the Department of Justice to convene a meeting with the Department of Technology to discuss issues pertaining to any proposed changes or upgrades, and authorize the Department of Technology to provide technological assistance for ongoing improvements, updates, or changes, to the single, statewide, and uniform electronic reporting system.

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: ²⁄₃. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

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

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

(c) Further, it is the intent of the Legislature that the Department
of Justice shall continue to accept the plain text descriptive
language historically used in the pawn and secondhand industries
and shall have the continuing obligation to convert those
descriptions as may be required by law enforcement databases in
order to protect the integrity of law enforcement databases. It is
the intent of the Legislature that only properly trained law
enforcement personnel of the Department of Justice or local law
enforcement classify and encode for law enforcement databases
property reported by pawnbrokers and secondhand dealers and
that begin delete the cost of the classification or the training of law enforcement
personnel not be funded by pawnbrokers or secondhand dealers. end delete begin insert end insert

begin insert all necessary costs required for the Department of Justice to map
the industry plain text property descriptions to any law enforcement
database be paid from the Secondhand Dealer and Pawnbroker
Fund established by subdivision (d) of Section 21642.5 of the
Business and Professions Code. end insert

SEC. 2.  

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

21628.  

(a) Every secondhand dealer or coin dealer described
in Section 21626 shall 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, 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 electronic reporting system operated
by the Department of Justice, or until such time as this system is
operational in the jurisdiction where the secondhand dealer is
located, on paper forms sent to the chief of police or to the sheriff,
in accordance with the provisions of Sections 21630 and 21633
and subdivision (d). The report shall be legible, prepared in
English, completed where applicable, and include only the
following information:

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

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

(A) A passport of the United States.

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

(C) An identification card issued by any state.

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

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

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

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

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

(C) For the purpose of this paragraph, “handheld electronic
device” means 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.

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

(5) 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.

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

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

(b) (1) 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 for all purposes included in this
article, and Division 8 (commencing with Section 21000) of the
Financial Code.

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

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

(d) (1) The Department of Justice shall recognize and accept
the plain text property descriptions generally accepted in the pawn
and secondhand industries provided by secondhand dealers, as has
been the longstanding practice of chiefs of police and sheriffs when
they receive paper reports from secondhand dealers. The
Department of Justice shall have the continuing duty to encode
the plain text property descriptions received by pawnbrokers and
secondhand dealers for law enforcement databases in order for
those descriptions to be useful for law enforcement purposes. begin delete Funds
collected pursuant to Section 21642.5 shall not be used by the
Department of Justice for the encoding or to train personnel to
encode these descriptions. end delete begin insert end insert begin insert All necessary costs incurred by the
Department of Justice in mapping the plain text property
descriptions received by pawnbrokers and secondhand dealers to
any law enforcement database shall be funded by the Secondhand
Dealer and Pawnbroker Fund established in subdivision (d) of
Section 21642.5. end insert

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

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

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

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

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

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

(F) On or before July 1, 2017, the Department of Justice shall
convene a meeting with the Department of Technology to discuss
issues pertaining to any proposed changes or upgrades to the single,
statewide, and uniform electronic reporting system required by
this chapter. The Department of Technology may provide
technological assistance for ongoing improvements, updates, or
changes to the single, statewide, and uniform electronic reporting
system required by this chapter, as requested.

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

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

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

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

SEC. 3.  

Section 21628.1 of the Business and Professions Code
is repealed.

SEC. 4.  

Section 21630 of the Business and Professions Code
is repealed.

SEC. 5.  

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

21630.  

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

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

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

SEC. 6.  

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

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

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