A California bill grouping antiques dealers with pawnbrokers may be on Governor Jerry Brown’s desk as early as this summer for signage into law. AB 391 require antiques dealers, specifically those with brick and mortar locations, to become part of a statewide electronic reporting system, the online database that tracks the buying and selling of all secondhand property. The new law also require that all merchandise bought or taken on consignment by the antiques dealer must be held for 30 days before it can be offered for sale – an unheard of requirement for antiques sellers.
The California Assembly unanimously passed the bill April 12, 2012 and on May 12, the California State Senate Committee on Public Safety followed suit, also unanimously passing the bill. The aim is to make it tougher for thieves to sell stolen merchandise through second-hand stores.
If passed the law in effect turns antiques dealers (and all businesses dealing with secondhand merchandise) into pawnbrokers, mandating them to operate under the same legal guidelines. Antiques dealers will now be required to submit to the same licensure procedures as pawnbrokers and be subject to the annual renewal fees which could reach as high as $300. This does not include the cost that will be forced upon each dealer to implement and use the online database reporting system — a cost that seems to be conveniently absent from all legalese associated with this bill.
Operationally, for antiques dealers, the new law requires that all secondhand tangible property — except firearms — which have been purchased, taken in trade, taken in pawn, accepted for sale on consignment or accepted for auctioning must be reported on the database system within 24 hours. In addition, fingerprints and photo identification must be obtained from the seller of the property and complete description of the merchandise must be submitted along with applicable serial numbers.
California lawmakers, along with support from local law enforcement agencies, attempted to pass a similar bill 10 years ago without success but this time, under the leadership of Assemblyman Dr. Richard Pan (D-Sacramento), the bill virtually flew right through. With the power of the California Pawnbrokers Association behind Pan as well as support from California Attorney General Kamala Harris and Los Angeles Sherrif Lee Baca to name just a few, there was fear that this time the bill would pass and indeed it has.
Support for this bill has been garnered by convincing legislators that this will greatly reduce stolen property being filtered through secondhand dealers. We know antiques dealers rarely deal with stolen property and they are being unfairly targeted. It’s about the money and California’s severe financial crisis which is at the core this bill. It’s a bit similar to California’s Department of Fish and Game’s new found mission to save the elephants in Africa, recently raiding antique shows and auction houses and placing ridiculously high fines on all ivory, antique or contemporary, that is being sold.
Fees would build the new Secondhand Dealer and Pawnbroker Fund. Antiques dealers would be paying to fund the statewide reporting system with the state pledging an additional $2.5 million for implementation. The last time we checked, California is facing a $15.7 billion budget deficit. Charging antiques dealers out of business won’t come close to filling this void. This bill is about the money the state so desperately needs.
AB 391 will have a devastating effect on many of California’s thousands of antiques dealers to say nothing of the secondhand dealers overall. Call it the anti-recycling bill, the anti-green bill, the State of California seems to want to penalize those businesses that are truly recycling and truly green operations.
The only bright spot in this whole poorly written attempt to regulate the buying and selling of used goods, is that at this time, dealers who strictly do antiques shows and flea markets will not be subject to this new law.
Antique Trader opposes this bill and there is still time to try and stop AB 391 from being signed into law by Governor Brown. This is very serious and the California antiques trade needs everyone’s support so it can continue to be a vibrant part of the antiques trade in the country.
You can read the entire bill here: Assembly Bill 391.
To express your support in opposition to AB 391, you can email a letter to Brown’s office directly or contact
Governor Jerry Brown
c/o State Capitol, Suite 1173
Sacramento, CA 95814
Phone: (916) 445-2841
Fax: (916) 558-3160
Have an opinion? Sound off in the comments below.
I’m really confused… As an antiques dealer, who is also a gold buyer and a pawnbroker, I thought the law already requires us to report tangible personal property..? Whenever I buy items like jewelry or electronics from the public, I have them complete a JUS-123 and I send this to my local PD, as per the Business & Professions Codes. Am I doing something wrong?! As far as I can see AB391 just makes this reporting process more efficient and avoids us being bullied into using third party reporting companies who charge law enforcement for their services. I can only imagine it wouldn’t be long before the police department decided to start charging me for this “service”, given how broke every city is! I don’t see any changes to existing law in AB391, just a higher price for my license to pay for a Statewide reporting system. I think your article is way off base.
On behalf of the California Pawnbrokers Association, I would like to state that there are significant errors in the article published on the Antiques Trader Blog on May 25, 2012 “AB 391 lumps antiques dealers with pawnbrokers, may cripple California antiques trade”. Most importantly, the proposed bill AB 391 does not unfairly target antique dealers. There is nothing in AB 391 (Pan) that requires an antique dealer to report transactions. AB 391 proposes to fund regulations that are already in current law.
If an antique dealer buys “tangible personal property” from the public, they, along with any other business that deals in secondhand tangible personal property, are already required to report transactions to law enforcement in an effort to dissuade any type of illegal activity. The new legislation would help law enforcement automate the process and would increase effectiveness of tracking these types of transactions. By comparing transactions reported to the database with recently reported thefts, law enforcement can identify the stolen property, putting them on the trail of those who stole the property.
The Department of Justice has identified 4457 businesses who must currently report. The California State Board of Equalization has identified some 95,000 businesses holding resale licenses. There are a growing number of retail businesses that formerly sold only new merchandise who now deal in products on the secondhand market. The universe of business models that fall under the reporting requirements of current law is immense. Under current California statute (Business and Professions Code Section(s) 21628 & 21630), pawnbrokers, secondhand dealers and others are required to submit daily a JUS123 form for each transaction to the Attorney General and local law enforcement.
Several years ago the Department of Justice notified secondhand dealer licensees that they no longer had sufficient room to store the forms and lacked the resources to process the paper JUS123 forms. Consequently, pawnbrokers and secondhand dealers now send them to local law enforcement only. As local jurisdictions suffer from the same lack of resources, they have approached the statutory requirements of handling these forms in mainly three (3) ways:
1. The forms sit in a box somewhere until local law enforcement needs to look for a specific transaction;
2. They use critically limited human resources to manually catalog the forms for future use, and
3. In a few cases, agencies have contracted with third-party providers in an attempt to create some form of an internal electronic data system that does not interface with other jurisdictions.
One of the biggest failures of the current paper system is the inability for the various jurisdictions to interact in an efficient manner to share property reporting. For instance, criminals can travel short distances, change jurisdictions and attempt to unload stolen property with minimal likelihood of being caught because there is no efficient inter-jurisdictional communication relative to tangible personal property reporting. The current system is so cumbersome that many jurisdictions have abandoned maintaining their paper systems altogether.
Clearly the citizens of California have an antiquated, inaccurate, inefficient, and flawed reporting system that has been essentially unchanged since the middle of the last century. This problem was thought to have been solved in the year 2000 with the passage of SB1520 (Schiff), which called for a statewide and uniform electronic reporting system. That legislation was never funded and the system still does not exist twelve years later.
The benefits of a statewide and uniform reporting system would be increased property recovery, a more efficient tool for law enforcement and a less costly and more efficient use of the pawnbrokers and secondhand dealer’s financial resources.
Best regards,
Emmett Murphy
California Pawnbrokers Association
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