BILL ANALYSIS Ó
AB 1751
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Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1751 (Low) - As Amended April 25, 2016
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
This bill revises the Department of Justice's (DOJ) current
requirements for the implementation and construction of the
single, statewide and uniform electronic reporting database
which was funded as a result of AB 391 (Pan), Chapter, 172,
Statutes of 2012. Specifically, this bill:
AB 1751
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1)Eliminates the requirements for DOJ to develop descriptive
categories for the single, statewide, and uniform electronic
reporting system for purposes of reporting requirements of
tangible personal property for secondhand dealers, and instead
requires the DOJ to accept the plain text property
descriptions commonly recognized and utilized by the pawn and
secondhand dealer industries.
2)Requires the DOJ to encode those plain text property
descriptions and requires that the necessary cost incurred by
DOJ in mapping the plain text property descriptions to any law
enforcement database be funded the Secondhand Dealer and
Pawnbroker Fund.
3)Requires the single, statewide, and uniform electronic
reporting system to be implemented and operated in compliance
with the Administrative Procedure Act and prohibits the DOJ
from taking any action with respect to the implementation,
operation, or maintenance of the electronic reporting system
by adoption of an emergency regulation.
4)Specifies that a secondhand dealer is not required to provide
additional information about a seller or pledger, other than
what is required in existing law.
FISCAL EFFECT:
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1)Significant costs to DOJ of approximately $800,000 for two
years (Secondhand Dealer and Pawnbroker Fund/GF) for IT
programing for backend mapping to the data reporting system.
2)After two years, ongoing costs to DOJ of approximately
$500,000 annually (Secondhand Dealer and Pawnbroker Fund/GF)
to monitor and maintain the system. This includes permanent IT
and program analysts as well as criminal ID specialists to
accommodate increased workload.
COMMENTS:
1)Purpose. According to the author, "the need for this
legislation arises because in implementing the California
Automated Pawn and Secondhand Dealer System (CAPSS) system,
the DOJ is requiring that second hand dealers to input
optional information beyond what is statutorily authorized by
the Legislature. This bill is sponsored by the California
Pawnbrokers Association (CPA).
2)Background. When secondhand dealers or pawnbrokers take in
items, whether buying outright or loaning money and holding
for collateral, they are required to report to local law
enforcement daily or on the first working day after they have
taken possession of an item. Until January 1, 2016, that
property report was completed on the "JUS 123" standardized
paper form which was completed for each item purchased, taken
in trade, taken in pawn or accepted for sale on consignment.
This form required the use of plain text (handwritten)
descriptions to describe the property acquired. Secondhand
dealers would fill out the documents using terminology common
to the pawn and secondhand industry, as there were not
specific descriptive language requirements or categories that
secondhand dealers were required to use. Law enforcement
AB 1751
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would then transfer the property as described on the "JUS 123"
into the appropriate law enforcement data base system. This
was to help ensure that items received by a secondhand dealer
or pawnbroker were not stolen, and provided a mechanism for
law enforcement to review, retrieve or hold items as part of
an investigation.
AB 391 (Pan), Chapter 172, Statutes of 2012, required secondhand
dealers and coin dealers to help fund a new reporting system,
which the DOJ was mandated to develop and implement. The
result was the "California Pawn and Secondhand Dealer System"
(CAPSS). The CAPSS system is funded through licensing fees
from the secondhand dealers. As a result, licensing fees for
secondhand dealers rose from $12 to $300 biannually.
The CAPSS system was intended to eliminate the need for paper
reports in favor of a uniform electronic database. However,
issues have arisen about how items must be described and
classified prior to submission, and about the amount and type
of information pawnbrokers are being asked to disclose under
the new system.
There are approximately 600 pawnbrokers in California. The
daily transactions for pawnbrokers vary from shop to shop with
a low of 10 to a high of 600, with the average around 50.
3)Related Legislation. AB 2236 (Santiago and Bonta) defines
"tangible personal property" to exclude these specified types
of property that have a value of $950 or less. This bill was
held in the Assembly Committee on Business and Professions.
4)Prior Legislation:
a) AB 1182 (Santiago), Chapter 749, Statutes of 2015,
narrowed the definition of tangible personal property and
required DOJ to annually update the list of items that
represent a significant class of stolen goods, beginning
January 1, 2016, and post it on its Web site.
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b) AB 632 (Eggman), Chapter 169, Statutes of 2015,
authorizes specified unique identifying numbers to be used
as the serial number reported for handheld electronic
devices, as specified.
c) ACR 101 (Jones-Sawyer), Resolution Chapter 154, Statues
of 2014, requests DOJ to convene meetings with
representatives from law enforcement, prosecutors, the
secondhand dealer and pawnbroker industry, and interested
members of the public to discuss potential changes in law
regarding internet pawnbrokers.
d) SB 782 (Hill), Chapter 318, Statutes of 2013, clarifies
the interests of licensed pawnbrokers and secondhand
dealers relating to the seizure and disposition of property
during a criminal investigation or case.
e) AB 391 (Pan), Chapter 172, Statutes of 2012, requires
secondhand dealers and coin dealers to report certain
information using the electronic reporting system developed
by DOJ on and after the date that the system is
implemented.
f) AB 1796 (Galgiani), of 2012 would have included in the
definition of criminal profiteering activity the unlicensed
sale of tangible personal property or other secondhand
goods, including gold and other precious metals, without a
license. This bill failed passage in the Assembly Public
Safety Committee.
g) AB 704 (Ma) of 2011 would have required secondhand
dealers to provide specified information to any peace
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officer upon demand and allowed for the storage of the item
for up to 90 days, and would have required an impounding
agency to satisfy specified requirements regarding
impounded. This bill was held in the Assembly Judiciary
Committee.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081