California Assembly Bill AB1751 Amended / Bill

 BILL NUMBER: AB 1751AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 31, 2016 AMENDED IN ASSEMBLY APRIL 25, 2016 AMENDED IN ASSEMBLY APRIL 18, 2016 AMENDED IN ASSEMBLY MARCH 28, 2016 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   Sections  21628  and 21642.5  of,  to add Section 21627.5 to,  to repeal  Section   Sections  21628.1  and 21633  of, and to repeal and add Section 21630 of, the Business and Professions Code, relating to secondhand goods,  making an appropriation therefor,  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  define "CAPSS" as the California Pawnbroker and SecondhandDealer System, which is the single, statewide, and 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 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 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.   The bill would 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.  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   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  the electronic reporting system   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  the single, statewide, and uniform electronic reporting system.   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: 2/3. Appropriation:  yes   no  . 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.   may provide article field descriptors to secondhand dealers in order to facilitate communication between the single, statewide, and uniform electronic reporting system and 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 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.   dealers.   SEC. 2.   Section 21627.5 is added to the   Business and Professions Code   , to read:   21627.5. "CAPSS" means the California Pawnbroker and SecondhandDealer System, which is a single, statewide, uniform electronic reporting system that receives secondhand dealer reports and is operated by the Department of Justice consistent with Resolution Chapter 16 of the Statutes of 2010. The maintenance and operation of CAPSS is funded by the Secondhand Dealer and Pawnbroker Fund established pursuant to Section 21642.5.   SEC. 2.   SEC. 3.  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  no later than the next business day excluding weekends and holidays after receipt or purchase of secondhand tangible personal property,  on forms or through an electronic reporting system approved by the Department of Justice,   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,  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   Section  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  property description. The property description shall be a  complete and reasonably accurate description of  serialized   the property, including, but not limited to, the following: serial  number   number, personalized inscriptions,  and other identifying marks or symbols, owner-applied numbers,  manufacturer's name brand, and model name or number.  the size color, material, and, if known by the secondhand dealer, the manufacturer's pattern name. The property description shall include the brand and model name or number of the item if known to, or reasonably ascertainable by, the secondhand dealer. The property description may include a plain text description of the item generally accepted by the secondhand industry.  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) A secondhand dealer may utilize an article field descriptor, the format of which shall be provided by the Department of Justice, if using the article field descriptor would, in whole or in part, accurately populate the property description with a plain text description generally accepted in the secondhand industry. The lack of an article field descriptor by a secondhand dealer shall not be relevant to any determination as to whether the secondhand dealer has received evidence of authority to sell or pledge the property pursuant to paragraph (1) of subdivision (b).   (B)   (C)  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)   (D)  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)   (4)  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)   (5)  A certification by the intended seller or pledger that to his or her knowledge and belief the information is true and complete.  (7)   (6)  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.  (7) A report submitted by a pawnbroker or secondhand dealer shall be deemed to have been accepted by the Department of Justice if a good faith effort has been made to supply all of the required information. An error or omission on the report shall be noted, and the reporting pawnbroker or secondhand dealer shall be notified of the error or omission by the Department of Justice. A reporting pawnbroker or secondhand dealer shall have three business days from that notice to amend or correct the report before being subject to any enforcement violation.  (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.   (c) Upon request from a local law enforcement agency, the Department of Justice shall electronically provide to the requesting local law enforcement agency transaction data reported by a secondhand dealer who is not licensed by the requesting local law enforcement agency but who is attending a gun show or event, as defined in Section 478.100 of Title 27 of the Code of Federal Regulations, in the jurisdiction of the requesting local law enforcement agency.  (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  pawnbrokers and  secondhand dealers, as has been the longstanding practice of chiefs of police and sheriffs when they  receive   had received  paper reports from  pawnbrokers and  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. 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.   (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   (2)     A  report required of a secondhand dealer  pursuant to this section  shall be transmitted by electronic means.   means to CAPSS by the secondhand dealer.   (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)   (3)  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   (4)    If there is a future change to the reporting requirements of CAPSS that substantively alters the reporting standards provided by this article, those changes  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,   a future change to CAPSS,  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   CAPSS  required by this chapter by adoption of an emergency regulation.  (F)   (5)  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   CAPSS  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   CAPSS  required by this chapter, as requested.  (4)   (6)  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)   (7)  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)   (8)  Nothing in this subdivision shall be construed as excepting a secondhand dealer from the fingerprinting requirement of paragraph  (7)   (6)  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.   SEC. 4.  Section 21628.1 of the Business and Professions Code is repealed.  SEC. 4.   SEC. 5.  Section 21630 of the Business and Professions Code is repealed.  SEC. 5.   SEC. 6.  Section 21630 is added to the Business and Professions Code, to read: 21630. (a) A secondhand dealer  or coin dealer  shall electronically transmit to  the Department of Justice's single, statewide, uniform electronic reporting system on   CAPSS no later than the next business day after  the date of transaction  excluding week   ends and holidays  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. 7.   Section 21633 of the   Business and Professions Code   is repealed.   21633. The report forms approved by the Department of Justice shall consist of not less than an original and two copies. The Department of Justice shall not require the report form to consist of more than an original and two copies when the forms are obtained from a source other than the department. A local law enforcement agency may request secondhand dealers within its jurisdiction to use a report form consisting of more than an original and two copies. However, each secondhand dealer or group of dealers shall be required only to use a form consisting of an original and two copies when the dealer does not use a form obtained from the Department of Justice. The Department of Justice shall allow the use of forms which are compatible with computerization. The original and the duplicate copy shall be submitted by the secondhand dealer in accordance with the provisions of Sections 21628 and 21630. One copy shall be retained by the secondhand dealer in his place of business for a period of three years and shall be made available for inspection by any law enforcement officer.   SEC. 8.   Section 21642.5 of the  Business and Professions Code   is amended to read:  21642.5. (a) The Department of Justice shall require each applicant for an initial license under Section 21641 of this code or Section 21300 of the Financial Code and each applicant for renewal of a license under Section 21642 of this code or Section 21301 of the Financial Code to pay a fee not to exceed three hundred dollars ($300), but in no event exceeding the costs described in subdivision (b), except that the fee may be increased at a rate not to exceed any increase in the California Consumer Price Index as compiled and reported by the Department of Industrial Relations. (b) The fees assessed pursuant to subdivision (a) shall be no more than necessary to cover the reasonable regulatory costs to the department of doing all of the following: (1) Processing initial license applications under Section 21641 of this code and Section 21300 of the Financial Code. (2) Processing renewal applications under Section 21642 of this code and Section 21301 of the Financial Code. (3) Implementing, operating, and maintaining  the single, statewide, uniform electronic reporting system   CAPSS  described in  subdivision (j) of  Section  21628.   21627.5.  (c) All licensees holding a license issued before the effective date of the act adding this section pursuant to Section 21641 or 21642 of this code or Section 21300 or 21301 of the Financial Code shall, within 120 days after enactment of the act adding this section in the 2011-12 Regular Session, in addition to any fee required under subdivision (a), pay a fee not to exceed two hundred eighty-eight dollars ($288) to the Department of Justice. (d) The fees paid pursuant to subdivisions (a) and (c) shall be deposited in the Secondhand Dealer and Pawnbroker Fund, which is hereby established in the State Treasury. The revenue in the fund shall, upon appropriation by the Legislature, be used by the Department of Justice for the purpose of paying for the costs described in paragraphs (1) to (3), inclusive, of subdivision (b), except that the revenue received pursuant to subdivision (c) shall, upon appropriation by the Legislature, be used by the Department of Justice for the purpose of paying for the costs described in paragraph (3) of subdivision (b). (e) Applicants described in subdivision (a) shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice for the purposes of obtaining information as to the existence and contents of a record of state convictions and state arrests and information as to the existence and contents of a record of state arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance pending trial or appeal. (1) The Department of Justice shall prepare a state-level response pursuant to paragraph (1) of subdivision (l) of Section 11105 of the Penal Code. (2) The Department of Justice shall provide subsequent notification service pursuant to Section 11105.2 of the Penal Code for applicants described in this subdivision. (3) The Department of Justice shall charge a fee sufficient to cover the cost of processing the request described in this subdivision. The fee revenues shall be deposited in the Fingerprint Fee Account and shall, upon appropriation by the Legislature, be used by the department for the purposes of paying the costs associated with this subdivision.  SEC. 6.   SEC. 9.  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.