BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1751|
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                                   THIRD READING 


          Bill No:  AB 1751
          Author:   Low (D), et al.
          Amended:  8/19/16 in Senate
          Vote:     27 - Urgency

           SENATE BUS., PROF. & ECON. DEV. COMMITTEE:  9-0, 6/27/16
           AYES:  Hill, Bates, Block, Gaines, Galgiani, Hernandez,  
            Jackson, Mendoza, Wieckowski

           SENATE APPROPRIATIONS COMMITTEE:  6-1, 8/11/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza
           NOES:  Nielsen

           ASSEMBLY FLOOR:  77-0, 6/2/16 - See last page for vote

           SUBJECT:   Secondhand goods


          SOURCE:    California Pawnbrokers Association


          DIGEST:  This bill makes several changes to the operation of the  
          California Automated Pawn and Secondhand Dealer System (CAPSS)  
          operated by the Department of Justice (DOJ).


          Senate Floor Amendments of 8/19/16 make correcting and  
          clarifying changes to a pawnbroker's reporting requirements.


          ANALYSIS:  
          
          Existing law:








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          1) Provides for the Secondhand Goods Law that regulates the sale  
             or other disposition of secondhand goods.  (Business and  
             Professions Code (BPC) § 21500 et seq.)

          2) Defines a "secondhand dealer" to mean and include 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 personal property, but does not include a  
             coin dealer or participants at guns shows or events, as  
             specified.  (BPC § 21626(a))

          3) Defines "tangible personal property" as 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.  
          (BPC § 21627(a))

          4) Defines "tangible personal property", among other things, as  
             all tangible personal property, new or used, received in  
             pledge as a security for a loan by a pawnbroker.  (BPC §  
             21627(b)(1))

          5) Defines "tangible personal property" to also mean all  
             tangible personal property that the Attorney General (AG)  
             statistically determines through the most recent DOJ "Crime  
             in California" report to constitute a significant class of  
             stolen goods and requires the DOJ to supply a list of such  
             personal property to all local law enforcement agencies, post  
             it on the AG's Web site, and update it annually beginning  
             January 1, 2016.  (BPC § 21627(c)).

          6) Defines a "significant class of stolen goods" to mean those  
             items determined through the DOJ's annual "Crime in  
             California" report to constitute more than 10% of property  
             reported stolen in the calendar year preceding the annual  
             posting of the list of significant classes of stolen goods.   
             (BPC § 21627(e))

          7) Requires every secondhand dealer or coin dealer, as  
             specified, to report daily or on the first working day after  







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             receipt or purchase of secondhand tangible personal property,  
             on forms or through an electronic reporting system approved  
             by the DOJ, all secondhand tangible personal property, except  
             for firearms, which he or she has taken in trade or pawn,  
             accepted for sale on consignment, or accepted for auctioning  
             to the chief of police or the sheriff as specified.  (BPC §  
             21628)

          8) Requires the DOJ, in consultation with appropriate law  
             enforcement agencies, to develop clear and comprehensive  
             descriptive categories denoting tangible personal property,  
             as specified, subject to reporting requirements.  (BPC §  
             21628(d)(1))

          9) Defines an "item" to mean any single 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  
             table ware, "item" refers to the commonly accepted grouping.   
             (BPC § 21628(d)(5))

          This bill:

           1) States that it is the intent of the Legislature to clarify  
             that pawnbrokers and other secondhand dealers are to report  
             their acquisition of tangible personal property in  
             descriptive, plain text language commonly used in the pawn  
             and secondhand industries.

           2) Defines "CAPSS" to mean "the California Pawnbroker and  
             Secondhand Dealer System, which is a single, statewide,  
             uniform electronic reporting system that receives secondhand  
             dealer reports and is operated by the DOJ consistent with SCR  
             63 (Yee, Resolution Chapter 16, Statutes of 2010).  The  
             maintenance and operation of CAPSS is funded by the  
             Secondhand Dealer and Pawnbroker Fund."  Replaces references  
             to "single, statewide and uniform electronic reporting  
             system" with "CAPSS".



           3) Revises the reporting requirements to require every  
             secondhand dealer or coin dealer, as specified, to report  
             daily or no later than the next business day, excluding  







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             weekends and holidays, after receipt or purchase of  
             secondhand tangible personal property, to CAPSS, 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.



           4) Revises the property description requirement to be a  
             complete and reasonably accurate description of the property.



           5) Specifies that a report submitted by a pawnbroker or  
             secondhand dealer is deemed to have been accepted by the DOJ  
             if a good faith effort has been made to supply all of the  
             required information.  Specifies that an error or omission on  
             the report be noted, the pawnbroker or secondhand dealer be  
             notified of the error by the DOJ, and the reporting  
             pawnbroker or secondhand dealer has three business days from  
             the notice by the DOJ to amend or correct the report before  
             being subject to any enforcement violation.





           6) Requires a secondhand dealer to report any business  
             conducted at a gun show to the CAPSS system, as specified. 


           7) Prohibits the DOJ, chiefs of police, and sheriffs from  
             collecting any additional information concerning the seller,  
             the pledger, or the property received by the secondhand  
             dealer in the report required by statute. 


           8) States that if there is a future change to the reporting  
             requirement of CAPSS that substantively alters the reporting  
             standards, as specified, those changes must be implemented  
             and operated in compliance with the Administrative Procedures  
             Act and in implementing and operating a future change to  
             CAPSS, the DOJ chiefs of police and sheriffs must comply with  
             current reporting and holding requirements, as specified.







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           9) Requires a secondhand dealer or coin dealer to  
             electronically transmit to CAPSS, no later than the next  
             business day, on the date of the transaction, excluding  
             weekends or holidays or, if not possible due to an  
             electrical, telecommunications, or other malfunction, as soon  
             as reasonable thereafter, the report of acquisition of  
             tangible personal property.


           10)Deletes the provisions related to reporting on paper forms,  
             as specified. 


           11)Deletes current requirements pertaining to the development  
             and implementation of the CAPSS, as specified. 


           12)States that this bill is an urgency statute necessary in  
             order to protect the public from dissemination of stolen  
             property, make the CAPPS system a cost savings for secondhand  
             dealers and pawnbrokers, and to require DOJ to recognize and  
             accept the properly spelled and non-abbreviated plain text  
             property descriptors, just as these plain text descriptions  
             have historically been accepted by chiefs of police and  
             sheriffs, at the earliest possible time, it is necessary that  
             this act take effect immediately.


           13)Makes correcting and clarifying changes to a pawnbroker's  
             reporting requirements.


          Background


          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  
          second hand dealers to input optional information beyond what is  
          statutorily authorized by the Legislature.  [This bill] will  
          continue the requirement of existing law by specifying that the  
          plain text property descriptions commonly recognized and  







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          utilized by the pawn and secondhand dealer industries shall be  
          the sole method of describing property acquired by these  
          businesses.  [This bill] also makes it clear that the CAPSS  
          system does not expand beyond current law the information that  
          is required to be collected or reported by secondhand dealers  
          and pawnbrokers."

          According to information provided by the California Pawnbrokers  
          Association, there are thousands of different items that are  
          pawned or bought daily in California by approximately 600  
          California pawnbrokers.  Further, 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.


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee, this bill will  
          incur unknown potential information technology costs and ongoing  
          potential staff costs to classify items reported to CAPSS based  
          on the plain text descriptions submitted by users. 




          SUPPORT:   (Verified8/22/16)


          California Pawnbrokers Association (source)
          Capital City Loan & Jewelry, II
          Empire Jewelry and Loan
          Granter Jewelry and Loan Company LLC
          Jewelry-N-Loan
          Precious Metal Investments
          Royal Loan 
          San Francisco Gold Buyer
          The Pawnshop Inc.


          OPPOSITION:   (Verified8/22/16)









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          California Peace Officers' Association
          California Police Chiefs Association
          California State Sheriffs' Association


          ARGUMENTS IN SUPPORT:     Supporters underscore that "this bill  
          will help ensure that we are able to provide our electronic  
          JUS123 form data directly to law enforcement via the DOJ's  
          database as mandated and agreed upon with AB 391.  As you are  
          aware, despite our efforts, the system currently in place is  
          inadequate for law enforcement and unusable for pawnbrokers in  
          many respects.  AB 1751 addresses these points directly and will  
          allow for an operable system to be put in place for the benefit  
          of all."


          ARGUMENTS IN OPPOSITION:Opponents assert that "abandoning the  
          requirement that the person who is in possession of the item  
          (the pawnbroker) describe the item in favor of requiring DOJ to  
          interpret a free-form, plain text description without the  
          benefit of seeing or holding the item will lead to a database  
          that contains less-than-accurate information and will severely  
          limit the utility of this important crime-fighting tool."

          ASSEMBLY FLOOR:  77-0, 6/2/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, 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, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Wood, Rendon
          NO VOTE RECORDED:  Frazier, Beth Gaines, Williams

          Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
          8/22/16 22:44:20


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