Amended in Senate August 19, 2016

Amended in Senate August 15, 2016

Amended in Senate June 20, 2016

Amended in Assembly May 31, 2016

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 BillNo. 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 Sections 21628 and 21642.5 of, to add Section 21627.5 to, to repeal Sections 21628.1 and 21633 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 regulates secondhand dealers and coin dealers, and 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 also regulates pawnbrokers. 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 has not been convicted of an offense involving stolen property. 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, 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 define “CAPSS” as the Californiabegin delete Pawnbrokerend deletebegin insert Pawnend insert and SecondhandDealer System, which is the single, statewide, uniform electronic reporting system operated by the Department of Justice. The bill would eliminate the requirement that a secondhand dealer send reports on paper forms. The 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 thebegin insert properly spelled and non-abbreviatedend insert plain text property descriptions commonly recognized and utilized by the pawn and secondhand dealer industries. The bill wouldbegin delete authorize a secondhand dealer to utilize an article field descriptor provided by the Department of Justice, if using the article field descriptor would, in whole or in part, populate the property description.end deletebegin insert require a secondhand dealer to provide a property description in an article field descriptor, as specified.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 a future change to the reporting requirements of CAPSS that substantively alters the reporting standards 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 CAPSS 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 CAPSS.

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
P4    1standard, and the costs of implementing software to maintain that
2standard.

3(c) Further, it is the intent of the Legislature that the Department
4of Justice shall continue to accept the plain text descriptive
5language historically used in the pawn and secondhand industries
6and may provide article field descriptors to secondhand dealers in
7order to facilitate communication between the single, statewide,
8and uniform electronic reporting system and law enforcement
9databases. It is the intent of the Legislature that only properly
10trained law enforcement personnel of the Department of Justice
11or local law enforcement classify and encode for law enforcement
12databases property reported by pawnbrokers and secondhand
13dealers.

14

SEC. 2.  

Section 21627.5 is added to the Business and
15Professions Code
, to read:

16

21627.5.  

“CAPSS” means the Californiabegin delete Pawnbrokerend deletebegin insert Pawnend insert
17 and SecondhandDealer System, which is a single, statewide,
18uniform electronic reporting system that receives secondhand
19dealer reports and is operated by the Department of Justice
20consistent with Resolution Chapter 16 of the Statutes of 2010. The
21maintenance and operation of CAPSS is funded by the Secondhand
22Dealer and Pawnbroker Fund established pursuant to Section
2321642.5.

24

SEC. 3.  

Section 21628 of the Business and Professions Code,
25as amended by Section 1 of Chapter 169 of the Statutes of 2015,
26is amended to read:

27

21628.  

(a) Every secondhand dealer or coin dealer described
28in Section 21626 shall report daily, or no later than the next
29business day excluding weekends and holidays after receipt or
30purchase of secondhand tangible personal property, to CAPSS, all
31secondhand tangible personal property, except for firearms, which
32he or she has purchased, taken in trade, taken in pawn, accepted
33for sale on consignment, or accepted for auctioning, in accordance
34with the provisions of Section 21630 and subdivision (d). The
35report shall be legible, prepared in English, completed where
36applicable, and include only the following information:

37(1) The name and current address of the intended seller or
38pledger of the property.

39(2) The identification of the intended seller or pledger. The
40identification of the seller or pledger of the property shall be
P5    1verified by the person taking the information, who may use
2technology, including, but not limited to, cameras or software, or
3both, to obtain information and verify identity remotely. The
4verification shall be valid if the person taking the information
5reasonably relies on any one of the following documents, provided
6that the document is currently valid or has been issued within five
7years and contains a photograph or description, or both, of the
8person named on it, and, where applicable, is signed by the person,
9and bears a serial or other identifying number:

10(A) A passport of the United States.

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

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

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

14(E) A passport from any other country in addition to another
15item of identification bearing an address.

16(F) A Matricula Consular in addition to another item of
17identification bearing an address.

18(3) (A) A property description. The property description shall
19be a complete and reasonably accurate description of the property,
20including, but not limited to, the following: serial number,
21personalized inscriptions, and other identifying marks or symbols,
22owner-applied numbers, the size, color, material, and, if known
23by the secondhand dealer, the manufacturer’s pattern name. The
24property description shall include the brand and model name or
25number of the item if known to, or reasonably ascertainable by,
26the secondhand dealer. The property descriptionbegin delete mayend deletebegin insert shallend insert include
27a plain text description of the item generally accepted by the
28secondhand industry. Watches need not be disassembled when
29special skill or special tools are required to obtain the required
30information, unless specifically requested to do so by a peace
31officer. A special tool does not include a penknife, caseknife, or
32similar instrument and disassembling a watch with a penknife,
33caseknife, or similar instrument does not constitute a special skill.
34In all instances where the required information may be obtained
35by removal of a watchband, then the watchband shall be removed.
36The cost associated with opening the watch shall be borne by the
37pawnbroker, secondhand dealer, or customer.

38(B) A secondhand dealerbegin delete mayend deletebegin insert shallend insert utilizebegin insert in the article field
39eitherend insert
an article field descriptor, the format of which shall be
40provided by the Department of Justice,begin delete if using the article field
P6    1descriptor would, in whole or in part, accurately populate the
2property description with a plain text description generally accepted
3in theend delete
begin insert or a properly spelled and non-abbreviated plain text
4descriptor commonly recognized and utilized by the pawn andend insert

5 secondhandbegin insert dealerend insert industry. The lack of an article field descriptor begin delete6 by a secondhand dealerend delete begin insert provided by the Department of Justiceend insert
7 shall not be relevant to any determination as to whether the
8secondhand dealer has received evidence of authority to sell or
9pledge the property pursuant to paragraph (1) of subdivisionbegin delete (b).end delete
10
begin insert (b) so long as the end insertbegin insertsecondhand dealer reports an article field
11descriptor consistent with this subdivision.end insert

12(C) In the case of the receipt or purchase of a handheld electronic
13device by a secondhand dealer, the serial number reported pursuant
14to subparagraph (A) may be the International Mobile Station
15Equipment Identity (IMEI), the mobile equipment identifier
16(MEID), or other unique identifying number assigned to that device
17by the device manufacturer. If none of these identifying numbers
18are available by the time period required for reporting pursuant to
19this subdivision, the report shall be updated with the IMEI, MEID,
20or other unique identifying number assigned to that device by the
21device manufacturer as soon as reasonably possible but no later
22than 10 working days after receipt or purchase of the handheld
23electronic device.

24(D) For the purpose of this paragraph, “handheld electronic
25device” means any portable device that is capable of creating,
26receiving, accessing, or storing electronic data or communications
27and includes, but is not limited to, a cellular phone, smartphone,
28or tablet.

29(4) A certification by the intended seller or pledger that he or
30she is the owner of the property or has the authority of the owner
31to sell or pledge the property.

32(5) A certification by the intended seller or pledger that to his
33or her knowledge and belief the information is true and complete.

34(6) A legible fingerprint taken from the intended seller or
35pledger, as prescribed by the Department of Justice. This
36requirement does not apply to a coin dealer, unless required
37pursuant to local regulation.

38(7) A report submitted by a pawnbroker or secondhand dealer
39shall be deemed to have been accepted by the Department of Justice
40if a good faith effort has been made to supply all of the required
P7    1information. An error or omission on the report shall be noted, and
2the reporting pawnbroker or secondhand dealer shall be notified
3of the error or omission by the Department of Justice. A reporting
4pawnbroker or secondhand dealer shall have three business days
5from that notice to amend or correct the report before being subject
6to any enforcement violation.

7(b) (1) When a secondhand dealer complies with all of the
8provisions of this section, he or she shall be deemed to have
9received from the seller or pledger adequate evidence of authority
10to sell or pledge the property for all purposes included in this
11article, and Division 8 (commencing with Section 21000) of the
12Financial Code.

13(2) In enacting this subdivision, it is the intent of the Legislature
14that its provisions shall not adversely affect the implementation
15of, or prosecution under, any provision of the Penal Code.

16(c) Any person who conducts business as a secondhand dealer
17at any gun show or event, as defined in Section 478.100 of Title
1827 of the Code of Federal Regulations, or its successor, outside
19the jurisdiction that issued the secondhand dealer license in
20accordance with subdivision (d) of Section 21641, may be required
21to submit a duplicate of the transaction report prepared pursuant
22to this section to the local law enforcement agency where the gun
23show or event is conducted.

24(d) (1) The Department of Justice shall recognize and accept
25thebegin insert properly spelled end insertbegin insertand non-abbreviatedend insert plain text property
26begin delete descriptionsend deletebegin insert descriptorsend insert generally accepted in the pawn and
27secondhand industries provided by pawnbrokers and secondhand
28dealers, as has been the longstanding practice of chiefs of police
29and sheriffs when they had received paper reports from
30pawnbrokers and secondhand dealers.

31(2) A report required of a secondhand dealer pursuant to this
32section shall be transmitted by electronic means to CAPSS by the
33secondhand dealer.

34(3) Unless specifically identified in this section, the Department
35of Justice, chiefs of police, and sheriffs shall not require a
36secondhand dealer to include any additional information concerning
37the seller, the pledger, or the property received by the secondhand
38dealer in the report required by this section.

39(4) If there is a future change to the reporting requirements of
40CAPSS that substantively alters the reporting standards provided
P8    1by this article, those changes shall be implemented and operated
2in compliance with the Administrative Procedure Act (Chapter
33.5 (commencing with Section 11340) of Part 1 of Division 3 of
4Title 2 of the Government Code). In implementing and operating
5a future change to CAPSS, the Department of Justice, chiefs of
6police, and sheriffs shall comply with Sections 21637 and 21638.
7Notwithstanding any other law, the Department of Justice shall
8not take any action with respect to the implementation, operation,
9or maintenance of CAPSS required by this chapter by adoption of
10an emergency regulation.

11(5) On or before July 1, 2017, the Department of Justice shall
12convene a meeting with the Department of Technology to discuss
13issues pertaining to any proposed changes or upgrades to CAPSS
14required by this chapter. The Department of Technology may
15provide technological assistance for ongoing improvements,
16updates, or changes to CAPSS required by this chapter, as
17requested.

18(6) A coin dealer shall report the information required by this
19section under the reporting standard described in paragraph (1) on
20a form developed by the Attorney General that the coin dealer
21shall transmit each day by facsimile transmission or by mail to the
22chief of police or sheriff. A transaction shall consist of not more
23than one item.

24(7) For purposes of this subdivision, “item” shall mean any
25single physical article. However, with respect to a commonly
26accepted grouping of articles that are purchased as a set, including,
27but not limited to, a pair of earrings or place settings of china,
28silverware, or other tableware, “item” shall mean that commonly
29accepted grouping.

30(8) Nothing in this subdivision shall be construed as excepting
31a secondhand dealer from the fingerprinting requirement of
32paragraph (6) of subdivision (a).

33(e) Nothing in this section shall be construed to exempt a person
34licensed as a firearms dealer pursuant to Sections 26700 to 26915,
35inclusive, of the Penal Code from the reporting requirements for
36the delivery of firearms pursuant to Sections 26700 to 26915,
37inclusive, of the Penal Code.

38

SEC. 4.  

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

P9    1

SEC. 5.  

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

3

SEC. 6.  

Section 21630 is added to the Business and Professions
4Code
, to read:

5

21630.  

(a) A secondhand dealer or coin dealer shall
6electronically transmit to CAPSS no later than the next business
7day after the date of transaction excluding weekends and holidays
8or, if not then possible due to an electrical, telecommunications,
9or other malfunction, as soon as reasonable thereafter, the report
10of acquisition of tangible personal property as required by Section
1121628.

12(b) Notwithstanding Section 21628, submission of a tangible
13property acquisition report is not required if the report of an
14acquisition of the same property from the same customer has been
15submitted within the preceding 12 months.

16

SEC. 7.  

Section 21633 of the Business and Professions Code
17 is repealed.

18

SEC. 8.  

Section 21642.5 of the Business and Professions Code
19 is amended to read:

20

21642.5.  

(a) The Department of Justice shall require each
21applicant for an initial license under Section 21641 of this code or
22Section 21300 of the Financial Code and each applicant for renewal
23of a license under Section 21642 of this code or Section 21301 of
24the Financial Code to pay a fee not to exceed three hundred dollars
25($300), but in no event exceeding the costs described in subdivision
26(b), except that the fee may be increased at a rate not to exceed
27any increase in the California Consumer Price Index as compiled
28and reported by the Department of Industrial Relations.

29(b) The fees assessed pursuant to subdivision (a) shall be no
30more than necessary to cover the reasonable regulatory costs to
31the department of doing all of the following:

32(1) Processing initial license applications under Section 21641
33of this code and Section 21300 of the Financial Code.

34(2) Processing renewal applications under Section 21642 of this
35code and Section 21301 of the Financial Code.

36(3) Implementing, operating, and maintaining CAPSS described
37in Section 21627.5.

38(c) All licensees holding a license issued before the effective
39date of the act adding this section pursuant to Section 21641 or
4021642 of this code or Section 21300 or 21301 of the Financial
P10   1Code shall, within 120 days after enactment of the act adding this
2section in the 2011-12 Regular Session, in addition to any fee
3required under subdivision (a), pay a fee not to exceed two hundred
4eighty-eight dollars ($288) to the Department of Justice.

5(d) The fees paid pursuant to subdivisions (a) and (c) shall be
6deposited in the Secondhand Dealer and Pawnbroker Fund, which
7is hereby established in the State Treasury. The revenue in the
8fund shall, upon appropriation by the Legislature, be used by the
9Department of Justice for the purpose of paying for the costs
10described in paragraphs (1) to (3), inclusive, of subdivision (b),
11except that the revenue received pursuant to subdivision (c) shall,
12upon appropriation by the Legislature, be used by the Department
13of Justice for the purpose of paying for the costs described in
14paragraph (3) of subdivision (b).

15(e) Applicants described in subdivision (a) shall submit to the
16Department of Justice fingerprint images and related information
17required by the Department of Justice for the purposes of obtaining
18information as to the existence and contents of a record of state
19convictions and state arrests and information as to the existence
20and contents of a record of state arrests for which the Department
21of Justice establishes that the person is free on bail or on his or her
22own recognizance pending trial or appeal.

23(1) The Department of Justice shall prepare a state-level
24response pursuant to paragraph (1) of subdivision (l) of Section
2511105 of the Penal Code.

26(2) The Department of Justice shall provide subsequent
27notification service pursuant to Section 11105.2 of the Penal Code
28for applicants described in this subdivision.

29(3) The Department of Justice shall charge a fee sufficient to
30cover the cost of processing the request described in this
31subdivision. The fee revenues shall be deposited in the Fingerprint
32Fee Account and shall, upon appropriation by the Legislature, be
33used by the department for the purposes of paying the costs
34associated with this subdivision.

35

SEC. 9.  

This act is an urgency statute necessary for the
36immediate preservation of the public peace, health, or safety within
37the meaning of Article IV of the Constitution and shall go into
38immediate effect. The facts constituting the necessity are:

39In order to protect the public from the dissemination of stolen
40property, make the single, statewide, uniform electronic system a
P11   1cost savings for secondhand dealers and pawnbrokers, and to
2require the plain text property descriptions historically utilized by
3these industries to be accepted by the Department of Justice, just
4as these plain text descriptions have historically been accepted by
5chiefs of police and sheriffs, at the earliest possible time, it is
6necessary that this act take effect immediately.



O

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