BILL ANALYSIS �
ACR 101
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Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
ACR 101 (Jones-Sawyer) - As Introduced: February 19, 2014
Policy Committee: Business and
Professions Vote: 14-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This resolution requests the California Department of Justice
(DOJ) to convene stakeholder meetings in 2014 to discuss
concerns regarding California pawnbrokers' ability to compete in
the emerging Internet pawn industry. Specifically, this
resolution:
Requests DOJ to convene meetings in 2014 with representatives
from law enforcement, prosecutors, and the secondhand dealer and
pawnbroker industry to determine the changes to existing law
necessary to:
1)Allow California secondhand dealers and pawnbrokers to fairly
compete with out-of-state Internet pawnbrokers.
2)Keep available to law enforcement merchandise pawned over the
Internet that would otherwise go out-of-state and not be
reported or held.
3)Protect California consumers transacting pawn loans over the
Internet from higher interest rates and fees than those
permitted in California.
The resolution further requests that DOJ report its findings and
recommendations to the Legislature by January 1, 2015.
FISCAL EFFECT
One-time costs to Department of Justice (DOJ) of approximately
$100,000 (GF) to hold stakeholder meetings and to report to the
Legislature on its findings and recommendations.
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COMMENTS
1)Purpose . In the past decade, a new business model has emerged
in other states called "Internet pawn" and operators in less
regulated states are aggressively and openly operating in
California over the Internet, but are not in compliance with
California law pertaining to secondhand dealers and
pawnbrokers.
According to the author, "Competition from out-of-state
pawnbrokers using the Internet has become a significant
problem for California pawnbrokers, as they are unable to
compete against the internet-based model due primarily to the
requirement to obtain a fingerprint from the borrower."
The purpose of this resolution is to implore DOJ to convene
stakeholder meetings in 2014 to address the Internet-based
secondhand dealer and pawnbroker industry, which is not
necessarily bound by the same reporting, holding and interest
rate requirements that California pawnbrokers and secondhand
dealers are obligated to comply with. The author wants to
specifically explore and devise alternatives to the finger
print requirement for Internet based transactions only.
Previous Legislation .
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.
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.
AB 1796 (Galgiani) of 2012 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.
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AB 704 (Ma) of 2011 required that a person conducting business
as a secondhand dealer provide specified information to any
peace officer upon demand and allow for the storage of the
item for up to 90 days, required an impounding agency to
satisfy specified requirements regarding impounded property,
and authorized a nonprofit association composed of 50 or more
licensed secondhand dealers to bring an action to enjoin a
person from conducting business as a secondhand dealer without
being licensed. This bill was held in the Assembly Judiciary
Committee.
Analysis Prepared by : Jennifer Swenson / APPR. / (916)
319-2081