Second Hand Dealers Law California

CALIFORNIA CODES
CALIFORNIA BUSINESS AND PROFESSIONS CODE
Division 8. SPECIAL BUSINESS REGULATIONS
Chapter 9. SECONDHAND GOODS
Article 4. Tangible Personal Property
Current through 2013 Legislative Session
§ 21625. Legislative intent

It is the intent of the Legislature in enacting this article to curtail the dissemination of stolen property and to facilitate the recovery of stolen property by means of a uniform, statewide, state-administered program of regulation of persons whose principal business is the buying, selling, trading, auctioning, or taking in pawn of tangible personal property and to aid the State Board of Equalization to detect possible sales tax evasion.

Further, it is the intent of the Legislature in enacting this article to require the uniform statewide reporting of tangible personal property acquired by persons whose principal business is the buying, selling, trading, auctioning, or taking in pawn of tangible personal property, unless the property or the transaction is specifically exempt herein, for the purpose of correlating these reports with other reports of city, county, and city and county law enforcement agencies and further utilizing the services of the Department of Justice to aid in tracing and recovering stolen property.

Further, it is the intent of the Legislature that this article shall not be superseded or supplanted by the provisions of any ordinance or charter of any city, county, or city and county.

Cite as Ca. Bus. and Prof. Code § 21625

§ 21626. "Secondhand dealer" and "coin dealer" defined

(a)     A "secondhand dealer," as used in this article, means and includes any person, copartnership, 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. A "secondhand dealer" does not include a "coin dealer" or participants at gun shows or events, as defined in Section 478.100 of Title 27 of the Code of Federal Regulations, or its successor, who are not required to be licensed pursuant to Sections 26700 to 26915, inclusive, of the Penal Code, who are acting in compliance with the requirements of Sections 26500 to 26585, inclusive, and 27545 of the Penal Code, and who are not a "Gun Show Trader," as described in Sections 16620 and 26525 of the Penal Code.
(b)     As used in this section, a "coin dealer" means any person, firm, partnership, or corporation whose principal business is the buying, selling, and trading of coins, monetized bullion, or commercial grade ingots of gold, or silver, or other precious metals.
Cite as Ca. Bus. and Prof. Code § 21626

History. Amended by Stats 2010 ch 178 (SB 1115), s 15, eff. 1/1/2011, op. 1/1/2012.

Amended by Stats 2004 ch 247 (AB 1232), s 1, eff. 8/23/2004.

§ 21626.5. Persons not included in definition of "secondhand dealer:

"Secondhand dealer," as used in this article, does not include either of the following:

(a)     Any person who performs the services of an auctioneer for a fee or salary.
(b)     Any person whose business is limited to the reconditioning and selling of major household appliances, provided all the following conditions are met:
(1)     The person does not trade, take in pawn, accept for drop-off, accept as a trade-in, accept for sale on consignment, accept for auction, auction, or buy, except in bulk, the appliances.
(2)     The person does not perform repair services for owners of appliances unless the appliance was purchased from the person.
(3)     The person has never been convicted of the crime of attempting to receive or receiving stolen property or any other theft-related crime.
Cite as Ca. Bus. and Prof. Code § 21626.5

§ 21627. "Tangible personal property" defined

(a)     As used in this article, "tangible personal property" includes, but is not limited to, 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.
(b)     "Tangible personal property" also includes, but is not limited to, the following:
(1)     All tangible personal property, new or used, including motor vehicles, received in pledge as security for a loan by a pawnbroker.
(2)     All tangible personal property that bears a serial number or personalized initials or inscription which is purchased by a secondhand dealer or a pawnbroker or which, at the time of such purchase, bears evidence of having had a serial number or personalized initials or inscription.
(3)     All personal property commonly sold by secondhand dealers which statistically is found through crime reports to the Attorney General to constitute a significant class of stolen goods. A list of such personal property shall be supplied by the Attorney General to all local law enforcement agencies. Such list shall be reviewed periodically by the Attorney General to insure that it addresses current problems with stolen goods.
(c)     As used in this article, "tangible personal property" does not include any new goods or merchandise purchased from a bona fide manufacturer or distributor or wholesaler of such new goods or merchandise by a secondhand dealer. For the purposes of this article, however, a secondhand dealer shall retain for one year from the date of purchase, and shall make available for inspection by any law enforcement officer, any receipt, invoice, bill of sale or other evidence of purchase of such new goods or merchandise.
(d)     As used in this article, "tangible personal property" does not include coins, monetized bullion, or commercial grade ingots of gold, silver, or other precious metals. "Commercial grade ingots" means 0.99 fine or finer ingots of gold, silver, palladium, or platinum, or 0.925 fine sterling silver art bars and medallions, provided that the ingots, art bars, and medallions are marked by the refiner or fabricator as to their assay fineness.
Cite as Ca. Bus. and Prof. Code § 21627

History. Amended by Stats 2012 ch 172 (AB 391), s 2, eff. 8/17/2012.

§ 21628. Report of receipt or purchase of secondhand tangible personal property

Every secondhand dealer or coin dealer described in Section 21626 shall report daily, or on the first working day after receipt or purchase of secondhand tangible personal property, on forms or through an electronic reporting system approved by the Department of Justice, 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 chief of police or to the sheriff, in accordance with the provisions of Sections 21630 and 21633 and subdivision (j). The report shall be legible, prepared in English, completed where applicable, and include, but not be limited to, the following information:

(a)     The name and current address of the intended seller or pledger of the property.
(b)     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. 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:
(1)     A passport of the United States.
(2)     A driver's license issued by any state or Canada.
(3)     An identification card issued by any state.
(4)     An identification card issued by the United States.
(5)     A passport from any other country in addition to another item of identification bearing an address.
(6)     A Matricula Consular in addition to another item of identification bearing an address.
(c)     A complete and reasonably accurate description of serialized property, including, but not limited to, the following: serial number and other identifying marks or symbols, owner-applied numbers, manufacturer's named brand, and model name or number. 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.
(d)     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.
(e)     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.
(f)     A certification by the intended seller or pledger that to his or her knowledge and belief the information is true and complete.
(g)     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.
(h)    
(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.
(i)     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.
(j)    
(1)     The Department of Justice shall, in consultation with appropriate local law enforcement agencies, develop clear and comprehensive descriptive categories denoting tangible personal property, as detailed in this section, subject to the reporting requirements of this section. These categories shall be incorporated by secondhand dealers and coin dealers described in Section 21626 for purposes of the reporting requirements set forth herein. Except as otherwise provided in this section, any report required of a secondhand dealer shall be transmitted by electronic means. 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.
(2)    
(A)     Until the date that the Department of Justice implements the single, statewide, uniform electronic reporting system described in paragraph (1), 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 of or provided by the Department of Justice.
(B)     On and after the date that the Department of Justice implements the single, statewide, uniform electronic reporting system described in paragraph (1), each secondhand dealer shall electronically report using that system the information required by this section under the reporting categories 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 (A).
(3)     A coin dealer shall report the information required by this section under the reporting categories 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.
(4)     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.
(5)     Nothing in this subdivision shall be construed as excepting a secondhand dealer from the fingerprinting requirement of subdivision (g).
(k)     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.
Cite as Ca. Bus. and Prof. Code § 21628

History. Amended by Stats 2012 ch 172 (AB 391), s 3, eff. 8/17/2012.

Added by Stats 2010 ch 178 (SB 1115), s 16, eff. 1/1/2011, op. 1/1/2012.

Added by Stats 2009 ch 335 (SB 449), s 2.5, eff. 1/1/2010.

Amended by Stats 2009 ch 335 (SB 449), s 1.5, eff. 1/1/2010.

Amended by Stats 2009 ch 311 (AB 99), s 1, eff. 1/1/2010.

Amended by Stats 2004 ch 247 (AB 1232), s 2, eff. 8/23/2004.

Amended by Stats 2000 ch 994 (SB 1520), s 1, eff. 1/1/2001.

§ 21628.1. Transaction reports; submission to law enforcement agency; exemptions

(a)     Notwithstanding Section 21628, submission of transaction reports are not required to be submitted to the local law enforcement agency if the report of an acquisition of the same property from the same customer has been submitted within the preceding 12 months, except when submission of the reports is specifically requested in writing by the local licensing authority.
(b)     This section shall become operative on July 1, 2010.
Cite as Ca. Bus. and Prof. Code § 21628.1

History. Added by Stats 2009 ch 335 (SB 449), s 4, eff. 1/1/2010.

§ 21628.2. Report to Department of Justice regarding firearms transactions; lost or stolen firearms; electronic transmission

(a)     For purposes of this section, the "department" shall mean the Department of Justice.
(b)     Every secondhand dealer described in Section 21626 shall, in a format prescribed by the department, and on the day of the transaction, electronically report to the department each firearm purchased, taken in trade, taken in pawn, accepted for sale on consignment, or accepted for auctioning. The secondhand dealer shall retain a copy of the report submitted to the department and make it available for inspection by the department, any peace officer, or any local law enforcement employee who is authorized by Article 1 (commencing with Section 26700) and Article 2 (commencing with Section 26800) of Chapter 2 of Division 6 of Title 4 of Part 6 of the Penal Code to inspect a firearms transaction record.
(c)     The department may retain secondhand dealer reports to determine whether a firearm taken in by a secondhand dealer has been reported lost or stolen. If the department's records indicate that the firearm is lost or stolen, the department shall notify the law enforcement agency that entered the information in the department's records and a law enforcement agency with jurisdiction over the secondhand dealer's business location about the status of the firearm. The Dealers' Record of Sale shall be retained by the department pursuant to Section 11106 of the Penal Code.
(d)     All information in the secondhand dealer report of each firearm described in subdivision (a) shall be electronically provided by the department to the secure mailbox of the local law enforcement agency described in Section 21630 within one working day of receipt by the department.
Cite as Ca. Bus. and Prof. Code § 21628.2

History. Amended by Stats 2011 ch 745 (AB 809), s 1, eff. 1/1/2012.

Amended by Stats 2010 ch 178 (SB 1115), s 17, eff. 1/1/2011, op. 1/1/2012.

Added by Stats 2009 ch 335 (SB 449), s 5, eff. 1/1/2010.

§ 21628.5. Business machine dealer; report of used machines and repairs

(a)     Every business machine dealer shall report all used business machines which he has purchased, taken in trade, or accepted for sale or consignment, from an individual, to the chief of police or to the sheriff in accordance with the provisions of Section 21628 and Section 21630.
Every business machine dealer shall report all used business machines which he has repaired, if required to do so by the chief of police or the sheriff in accordance with the provisions of Section 21628 and Section 21630.

No report of repair shall be required from a dealer servicing or repairing a machine in the possession of the owner to whom that dealer sold that machine when it was new.

(b)     As used in this section, the term "business machines" includes, but is not limited to, typewriters, adding machines, check-writing devices, cash registers, calculators, addressing machines, copying and accounting equipment, letter-sorting and folding devices, and recording equipment, but does not include office furniture or fixtures.
Cite as Ca. Bus. and Prof. Code § 21628.5

§ 21629. Exceptions from article

The provisions of this article shall not apply to any tangible personal property which has been:

(a)     Acquired from another secondhand dealer; provided the secondhand dealer selling or trading the tangible personal property states in writing under penalty of perjury, along with a description of the property, on an interdealer transfer form or an itemized bill of sale, that the report or reports required by this article have been properly made and submitted by that dealer. A copy of the form or the itemized bill of sale shall be delivered to the acquiring dealer at the time the transaction occurs. Interdealer transfer forms shall be provided at actual cost by the Department of Justice.
The dealers involved in the transaction shall retain their copy of the interdealer transfer form or itemized bill of sale for a period of three years as a matter of record, and shall make them available for inspection by any law enforcement officer.

(b)     Acquired in a nonjudicial sale, transfer, assignment, assignment for the benefit of creditors, or consignment of the assets or stock in trade, in bulk, or a substantial part thereof, of an industrial or commercial enterprise for purposes of voluntary dissolution or liquidation of the seller's business, or for the purpose of disposing of an excessive quantity of personal property; or which has been acquired in a nonjudicial sale or transfer from an owner of his or her entire household of personal property, or a substantial part thereof; provided, the secondhand dealer retains in his or her place of business for a period of three years a copy of the bill of sale, receipt, inventory list, or other transfer document as a matter of record which shall be made available for inspection by any law enforcement officer; and provided further, that the secondhand dealer notifies the chief of police or the sheriff that exemption from reporting is being claimed under this subdivision.
"Industrial or commercial enterprise" and "owner" as used in this subdivision do not include a secondhand dealer;

(c)    Acquired in a sale made by any public officer in his or her official capacity, trustee in bankruptcy, executor, administrator, receiver, or public official acting under judicial process or authority, or which has been acquired in a sale made upon the execution of, or by virtue of, any process issued by a court, or under the provisions of Division 7 (commencing with Section 7101) of the Commercial Code;
(d)    Acquired as the surplus property of the United States government or of a state, city, county, city and county, municipal corporation, or public district and which after requisition or acquisition by the United States government or by a state, city, county, city and county, municipal corporation, or public district has never thereafter been sold at retail; and
(e)     Reported by a secondhand dealer as an acquisition or a purchase, or which has been reported as destroyed or otherwise disposed of,
(1)     to a state agency by the authority of any other law of this State; or
(2)     to a city, county, or city and county officer or agency by the authority of any other law of this State or a city, county, or city and county ordinance.
(f)     Acquired by persons, firms, partnerships, or corporations who buy, sell, or trade precious metals, whether in the form of coins or commercial grade ingots, who: (1) are designated contract markets by or registered with the Commodity Futures Trading Commission under the Federal Commodities Exchange Act and acting pursuant thereto; or (2) infrequently conduct their business directly with members of the general public. As used in this subdivision, "infrequently" means occasional and without regularity.
Cite as Ca. Bus. and Prof. Code § 21629

§ 21629.5. Applicability of article to tangible personal property acquired with understanding that it would be reacquired by transferor

Notwithstanding Section 21629, the provisions of this article shall apply to any tangible personal property which has been acquired by a secondhand dealer with the understanding or expectation that such property would later be reacquired by the transferor or an agent thereof.

Cite as Ca. Bus. and Prof. Code § 21629.5

§ 21630. Submission of report

If the transaction takes place within the territorial limits of an incorporated city, the report shall be submitted to the police chief executive of the city or his or her designee. If the transaction takes place outside the territorial limits of an incorporated city, the report shall be submitted to the sheriff of the county or his or her designee.

Cite as Ca. Bus. and Prof. Code § 21630

History. Amended by Stats 2000 ch 994 (SB 1520), s 2, eff. 1/1/2001.

§ 21631. Report of tangible personal property found in shop doing business under secondhand dealer's license

Notwithstanding any other provisions of law, all tangible personal property that is found in the shop of a pawnbroker, secondhand dealer, or coin dealer, doing business under a California secondhand dealer's license, shall be reported as required under subdivisions (c) and (d) of Section 21628, including any additional information required by Section 21628 that is known by the reporting person, and shall be held as required under Section 21636 on forms as required under Section 21633. If no claim is made for the property for a period of 60 days after it is reported, the pawnbroker, secondhand dealer, or coin dealer may treat the property as property regularly acquired in the due course of business.

Cite as Ca. Bus. and Prof. Code § 21631

§ 21633. Report forms

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.

Cite as Ca. Bus. and Prof. Code § 21633

§ 21634. Report by chief of police or sheriff

The chief of police or the sheriff who receives a report on a form filed pursuant to the provisions of this article shall daily submit the original to the Department of Justice.

Cite as Ca. Bus. and Prof. Code § 21634

§ 21636. Retention of property by dealer for holding period

(a)     Every secondhand dealer and coin dealer shall retain in his or her possession for a period of 30 days all tangible personal property reported under Sections 21628, 21629, and 21630, and commencing July 1, 2010, Section 21628.2. The 30-day holding period with respect to this tangible personal property shall commence with the date the report of its acquisition was made to the chief of police or to the sheriff by the secondhand dealer and coin dealer. The chief of police or the sheriff may for good cause, as specified by the Department of Justice, or the Department of Justice may for good cause authorize prior disposition of any property described in a specific report, provided that a secondhand dealer who disposes of tangible personal property pursuant to that authorization shall report the sale thereof to the chief of police or the sheriff or the Department of Justice.
(b)     During the 30-day holding period specified in subdivision (a) every secondhand dealer and coin dealer shall produce any tangible personal property reported under Sections 21628, 21629, and 21630, and commencing July 1, 2010, Section 21628.2, for inspection by any peace officer or employee designated by the chief of police or sheriff or the Department of Justice.
(c)     Property subject to inspection as specified in subdivision (b) and property held in pawn, which is stored off the business premises of the licensee, shall, upon request for inspection, be produced at the licensee's business premises within one business day of a request.
(d)     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 for inspection, as specified in subdivision (b), any firearm acquired at a gun show or event within 48 hours of the request of the local law enforcement agency in the jurisdiction where the gun show or event was conducted at a location specified by the local law enforcement agency.
Cite as Ca. Bus. and Prof. Code § 21636

History. Amended by Stats 2009 ch 335 (SB 449), s 6, eff. 1/1/2010.

Amended by Stats 2004 ch 247 (AB 1232), s 3, eff. 8/23/2004.

§ 21636.5. No promise of repurchase

No secondhand dealer or coin dealer shall promise a seller of tangible property that the seller may repurchase property sold to the secondhand dealer or coin dealer.

Cite as Ca. Bus. and Prof. Code § 21636.5

§ 21636.6. Advertising without including licensing number

It is unlawful for any person, who is required to be licensed under Section 21640, to publicly advertise any matter relating to the business for which the license is required without including the license number.

Cite as Ca. Bus. and Prof. Code § 21636.6

§ 21637. No excuse of compliance with ordinances or other state law

Nothing herein contained shall be deemed to excuse compliance with the provisions of any city, county, or city and county ordinance or any other state law pertaining to or covering the reporting, holding, or releasing of tangible personal property, not inconsistent with the provisions of this article, except that no city, county, or city and county or any other state agency shall adopt the following:

(a)     Holding, reporting, or identification requirements for transactions involving coins, monetized bullion, or commercial grade ingots of gold, silver, or other precious metals.
(b)     Identification, holding, or reporting requirements for the acquisition of tangible personal property, in the ordinary course of business, by pawnbrokers and secondhand dealers, other than as set forth in Sections 21628, 21630, 21633, and 21636 of this code, and commencing July 1, 2010, Section 21628.2 of this code, and Section 21208 of the Financial Code.
Cite as Ca. Bus. and Prof. Code § 21637

History. Amended by Stats 2009 ch 335 (SB 449), s 7, eff. 1/1/2010.

§ 21638. No prohibition of enactment of local ordiance relating to secondhand dealer or coin dealer

The provisions of this article shall not prohibit enactment, amendment, or enforcement by any city, county, or city and county of any local ordinance relating to a secondhand dealer or coin dealer which is not inconsistent with the provisions of this article, except that no city, county, or city and county, or any other state agency shall adopt the following:

(a)     Holding, reporting, or identification requirements for transactions involving coins, monetized bullion, or commercial grade ingots of gold, silver, or other precious metals.
(b)     Identification, holding, or reporting requirements for the acquisition of tangible personal property, in the ordinary course of business, by pawnbrokers and secondhand dealers, other than as set forth in Sections 21628, 21630, 21633, and 21636 of this code, and commencing July 1, 2010, Section 21628.2 of this code, and Section 21208 of the Financial Code.
Cite as Ca. Bus. and Prof. Code § 21638

History. Amended by Stats 2009 ch 335 (SB 449), s 8, eff. 1/1/2010.

§ 21638.5. Applicability of holding periods

Sections 21636, 21637, and 21638, insofar as they apply to holding periods for personal property, are not applicable to personal property pledged to a pawnbroker with respect to the redemption of personal property by the pledgor.

Cite as Ca. Bus. and Prof. Code § 21638.5

§ 21640. Unlawful engaging in business without license

It is unlawful for any person to engage in the business of secondhand dealer, as defined in Section 21626, without being licensed as provided in this article.

Cite as Ca. Bus. and Prof. Code § 21640

§ 21641. Acceptance of application and grant of license

(a)     The chief of police, the sheriff, or, where appropriate, the police commission, shall accept an application for and grant a license permitting the licensee to engage in the business of secondhand dealer, as defined in Section 21626, to an applicant who has not been convicted of an attempt to receive stolen property or any other offense involving stolen property. Prior to the granting of a license, the licensing authority shall submit the application to the Department of Justice. If the Department of Justice does not comment on the application within 30 days thereafter, the licensing authority may grant the applicant a license. All forms for application and licensure, and license renewal, shall be prescribed and provided by the Department of Justice. A fee shall be charged to the applicant by the Department of Justice as specified in Section 21642.5. The licensing authority shall collect the fee and transmit the fee to the Department of Justice. In addition, the police chief, the sheriff, or, where appropriate, the police commission, may charge a fee to the applicant not to exceed the actual costs incurred to process the application and to collect and transmit the fee charged by the Department of Justice.
(b)     For the purposes of this section, "convicted" means a plea or verdict of guilty or a conviction following a plea of nolo contendere.
(c)     Notwithstanding subdivisions (a) and (b), no person shall be denied a secondhand dealer's license solely on the grounds that he or she violated any provision contained in this article or Article 5 (commencing with Section 21650), or any provision contained in Chapter 2 (commencing with Section 21200) of Division 8 of the Financial Code, unless the violation demonstrates a pattern of conduct.
(d)     Any person licensed as a firearms dealer pursuant to Sections 26700 to 26915, inclusive, of the Penal Code, who is conducting business at gun shows or events pursuant to subdivision (b) of Section 26805 of the Penal Code, and who has a valid secondhand dealer license granted by the appropriate local authorities in the jurisdiction where the firearms dealer license has been granted, shall be authorized to conduct 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, without regard to the jurisdiction within this state that issued the secondhand dealer license pursuant to subdivision (a) of this section. No additional fees or separate secondhand dealer license shall be required by any agency having jurisdiction over the locality where the gun show or event is conducted. However, the person shall otherwise be subject to, and comply with, the requirements of this article when he or she acts as a secondhand dealer at the gun show or event to the same extent as if he or she were licensed as a secondhand dealer in the jurisdiction in which the gun show or event is being conducted.
Cite as Ca. Bus. and Prof. Code § 21641

History. Amended by Stats 2012 ch 172 (AB 391), s 4, eff. 8/17/2012.

Amended by Stats 2010 ch 178 (SB 1115), s 18, eff. 1/1/2011, op. 1/1/2012.

Amended by Stats 2004 ch 247 (AB 1232), s 4, eff. 8/23/2004.

§ 21642. Renewal; forfeiture

(a)     A license granted pursuant to Section 21641 shall be renewable the second year from the date of issue, and every other year thereafter, upon the filing of a renewal application and the payment of a license renewal fee specified by the licensing authority, as described in this subdivision. The Department of Justice shall also charge a fee, as specified in Section 21642.5. The licensing authority shall collect the fee and transmit the fee and a copy of the renewed license to the Department of Justice. The police chief, sheriff, or, where appropriate, the police commission may charge a fee not to exceed the actual costs incurred to process the renewal application of the licensee and to collect and transmit the fee charged by the Department of Justice.
(b)     The license shall be subject to forfeiture by the licensing authority and the licensee's activities as a secondhand dealer shall be subject to being enjoined pursuant to Section 21646 for breach of any of the following conditions:
(1)     The business shall be carried on only at the location designated on the license. The license shall designate all locations where property belonging to the business is stored. Property of the business may be stored at locations not designated on the license only with the written consent of the local licensing authority.
(2)     The license or a copy thereof, certified by the licensing authority, shall be displayed on the premises in plain view of the public.
(3)     The licensee shall not engage in any act which the licensee knows to be in violation of this article.
(4)     The licensee shall not be convicted of an attempt to receive stolen property or any other offense involving stolen property. For the purposes of this paragraph, "convicted" means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the chief of police, the sheriff, or, where appropriate, the police commission is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(c)     Notwithstanding subdivisions (a) and (b), no person shall have his or her renewal application for a secondhand dealer's license denied, nor shall his or her secondhand dealer's license be forfeited solely on the grounds that he or she violated any provision contained in this article or Article 5 (commencing with Section 21650), or any provision contained in Chapter 2 (commencing with Section 21200) of Division 8 of the Financial Code, unless the violation demonstrates a pattern of conduct.
Cite as Ca. Bus. and Prof. Code § 21642

History. Amended by Stats 2012 ch 172 (AB 391), s 5, eff. 8/17/2012.

§ 21642.5. Fees

(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 described in subdivision (j) of Section 21628.
(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.
Cite as Cal. Bus. and Prof. Code § 21642.5

History. Added by Stats 2012 ch 172 (AB 391), s 6, eff. 8/17/2012.

§ 21643. Transactions with a minor

No transactions that require reporting under Section 21628, or commencing July 1, 2010, Section 21628.2, shall be engaged in with a minor.

Cite as Ca. Bus. and Prof. Code § 21643

History. Amended by Stats 2009 ch 335 (SB 449), s 9, eff. 1/1/2010.

§ 21645. Violations; misdemeanor; punishment

A violation of any provision of this article under circumstances where a person knows or should have known that a violation was being committed is a misdemeanor punishable as follows:

(a)     For the first offense, a fine of up to one thousand five hundred dollars ($1,500) or imprisonment in the county jail up to two months, or both.
(b)     For the second offense, a fine of up to five thousand dollars ($5,000) or imprisonment in the county jail up to four months, or both.
(c)     For the third, and any subsequent offense, a fine of up to twenty-five thousand dollars ($25,000) or imprisonment in the county jail up to six months, or both.
Cite as Ca. Bus. and Prof. Code § 21645

§ 21646. Violations or threatened violations; injunction

The district attorney or the Attorney General, in the name of the people of the State of California, may bring an action to enjoin the violation or the threatened violation of any provision of this article or of any regulation made pertaining to the provisions of this article. Any proceeding brought hereunder shall be governed in all respects by the provisions of Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure.

Cite as Ca. Bus. and Prof. Code § 21646

§ 21647. [Effective Until 1/1/2014] Placing of hold on property

(a)     Whenever any peace officer has probable cause to believe that property, except coins, monetized bullion, or "commercial grade ingots" as defined in subdivision (d) of Section 21627, in the possession of a pawnbroker, secondhand dealer, or coin dealer is stolen, the peace officer may place a hold on the property for a period not to exceed 90 days. When a peace officer places a hold on the property, the peace officer shall give the pawnbroker, secondhand dealer, or coin dealer a written notice at the time the hold is placed, describing the item or items to be held. During that period the pawnbroker, secondhand dealer, or coin dealer shall not release or dispose of the property, except pursuant to a court order or upon receipt of a written authorization signed by any peace officer who is a member of the law enforcement agency of which the peace officer placing the hold on the property is a member. A pawnbroker, secondhand property dealer, or coin dealer shall not be subject to civil liability for compliance with this section.
(b)     Whenever property that is in the possession of a pawnbroker, secondhand dealer, or coin dealer, whether or not the property has been placed on hold, is required by a peace officer in a criminal investigation, the pawnbroker, secondhand dealer, or coin dealer, upon reasonable notice, shall produce the property at reasonable times and places or may deliver the property to the peace officer upon the request of any peace officer.
(c)     Whenever a law enforcement agency has knowledge that property in the possession of a pawnbroker, secondhand dealer, or coin dealer has been reported as lost or stolen, the law enforcement agency shall notify in writing the person who reported the property as lost or stolen of the following:
(1)     The name, address, and telephone number of the pawnbroker, secondhand dealer, or coin dealer who reported the acquisition of the property.
(2)     That the law neither requires nor prohibits payment of a fee or any other condition in return for the surrender of the property, except that when the person who reported the property lost or stolen does not choose to participate in the prosecution of an identified alleged thief, the person shall pay the pawnbroker, secondhand dealer, or coin dealer the "out-of-pocket" expenses paid in the acquisition of the property in return for the surrender of the property.
(3)     That if the person who reported the property as lost or stolen takes no action to recover the property from the pawnbroker, secondhand dealer, or coin dealer within 60 days of the mailing of the notice, the pawnbroker, secondhand dealer, or coin dealer may treat the property as other property received in the ordinary course of business. During the 60-day notice period, the pawnbroker, secondhand dealer, or coin dealer may not release the property to any other person.
(4)     That a copy of the notice, with the address of the person who reported the property as lost or stolen deleted, will be mailed to the pawnbroker, secondhand dealer, or coin dealer who is in possession of the property.
(d)     When property that is in the possession of a pawnbroker, secondhand dealer, or coin dealer is subject to a hold as provided in subdivision (a), and the property is no longer required for the purpose of a criminal investigation, the law enforcement agency that placed the hold on the property shall release the hold on the property. When the law enforcement agency has knowledge that the property has been reported lost or stolen, the law enforcement agency shall then make notification to the person who reported the property as lost or stolen pursuant to subdivision (c).
(e)     If a pledgor seeks to redeem property that is subject to a hold, the pawnbroker shall advise the pledgor of the name of the peace officer who placed the hold on the property and the name of the law enforcement agency of which the officer is a member. If the property is not required to be held pursuant to a criminal prosecution the hold shall be released.
(f)     Whenever information regarding allegedly lost or stolen property is entered into the Department of Justice automated property system or automated firearms system, and the property is thereafter identified and found to be in the possession of a pawnbroker, secondhand dealer, or coin dealer, and the property is thereafter placed on a hold pursuant to this section and the hold, including any additional hold, is allowed to lapse, or 60 days elapse following the delivery of the notice required to be given by this section to the person who reported the property to be lost or stolen without a claim being made by that person, whichever is later, the pawnbroker, secondhand dealer, or coin dealer may mail under a Certificate of Mailing issued by the United States Post Office, addressed to the law enforcement agency that placed the property on hold, a written request to delete the property listing from the Department of Justice automated property system or automated firearms system, as is applicable. Within 30 days after the request has been mailed, the law enforcement agency shall either cause the property listing to be deleted as requested or place a hold on the property. If no law enforcement agency takes any further action with respect to the property within 45 days after the mailing of the request, the pawnbroker, secondhand dealer, or coin dealer may presume that the property listing has been deleted as requested and may thereafter deal with the property accordingly, and shall not be subject to liability arising from the failure of the removal of the property listing from the Department of Justice automated property system or automated firearms system.
(g)     Nothing in this section shall be construed to alter the authority of a peace officer to seize property pursuant to any other provision of statutory or case law.
Cite as Ca. Bus. and Prof. Code § 21647

Note: This section is set out twice. See also Ca. Bus. and Prof. Code § 21647, as amended by Stats 2013 ch 318 (SB 762), s 1, eff. 1/1/2014.

§ 21647. [Effective 1/1/2014] Placing of hold on property

Currentness
(a)(1) If a peace officer has probable cause to believe that property, except coins, monetized bullion, or “commercial grade ingots” as defined in subdivision (d) of Section 21627, in the possession of a licensed pawnbroker or secondhand dealer is lost, stolen, or embezzled, the peace officer may place a hold on the property for a period not to exceed 90 days.
(2) A 90-day hold issued pursuant to this section:
(A) Is created upon the receipt by a licensed pawnbroker or secondhand dealer of a written notice by a peace officer that contains the following:
(i) An accurate description of the property being placed on the 90-day hold.
(ii) An acknowledgment that the property is being placed on hold pursuant to this section and denoting whether physical possession will remain with the licensed pawnbroker or secondhand dealer or will be taken by the law enforcement agency instituting the 90-day hold.
(iii) The law enforcement agency's police report or department record number, if issued, for which the property is needed as evidence.
(iv) The date the notice was delivered to the licensed pawnbroker or secondhand dealer that shall initiate the notification period set forth in subdivisions (c) and (g).
(B) Shall not exceed a period of 90 calendar days, but may be renewed as provided in subparagraph (C).
(C) May be renewed as often as is required for a criminal investigation or criminal proceeding by any peace officer who is a member of the same law enforcement agency as the peace officer placing the hold on the property.
(D) Permits a peace officer to either take physical possession of the property as evidence, consistent with a peace officer's right to a plain view seizure for a criminal investigation or criminal proceeding, or to leave the property in the possession of the licensed pawnbroker or secondhand dealer as a custodian on behalf of the law enforcement agency.
(E) Requires the licensed pawnbroker or secondhand dealer to maintain physical possession of the property placed on hold and prohibits the property's release or disposal, except pursuant to the written authorization signed by a peace officer who is a member of the same law enforcement agency as the peace officer placing the hold on the property.
(F) Terminates when the property is no longer needed as evidence in a criminal investigation or criminal proceeding, at which time the property shall be disposed of pursuant to subdivision (d).
(G) Shall not be applicable to secure lost, stolen, or embezzled property found in the possession of an unlicensed pawnbroker or secondhand dealer that has not duly and correctly reported the acquisition pursuant to Section 21628. In such a circumstance, a peace officer, having probable cause to believe the property found in the possession of an unlicensed pawnbroker or secondhand dealer is lost, stolen, or embezzled, may seize the item or items consistent with the authority granted the peace officer under the Penal Code or any other law.
(b)(1) Whenever property that is in the possession of a licensed pawnbroker or secondhand dealer, and that has been placed on hold pursuant to this section, is required by a peace officer in a criminal investigation, the licensed pawnbroker or secondhand dealer, upon reasonable notice, shall produce the property at reasonable times and places or may deliver the property to the peace officer upon the request of any peace officer.
(2) If property placed on hold pursuant to this section is physically surrendered or delivered to a law enforcement agency during the period of the hold, the hold and the pawnbroker's lien against the property shall continue.
(c) Whenever a law enforcement agency has knowledge that property in the possession of a licensed pawnbroker or secondhand dealer has been reported as lost, stolen, or embezzled, the law enforcement agency shall, within two business days after placing the hold on the property pursuant to this section, notify in writing the person who reported the property as lost, stolen, or embezzled of the following:
(1) The name, address, and telephone number of the licensed pawnbroker or secondhand dealer who reported the acquisition of the property.
(2) That the law neither requires nor prohibits payment of a fee or any other condition in return for the surrender of the property, except that when the person who reported the property lost, stolen, or embezzled does not choose to participate in the prosecution of an identified alleged thief, the person shall pay the licensed pawnbroker or secondhand dealer the “out-of-pocket” expenses paid in the acquisition of the property in return for the surrender of the property.
(3) That if the person who reported the property as lost, stolen, or embezzled takes no action to recover the property from the licensed pawnbroker or secondhand dealer within 60 days of the mailing of the notice, the licensed pawnbroker or secondhand dealer may treat the property as other property received in the ordinary course of business. During the 60-day notice period, the licensed pawnbroker or secondhand dealer may not release the property to any other person.
(4) That a copy of the notice, with the address of the person who reported the property as lost, stolen, or embezzled deleted, will be mailed to the licensed pawnbroker or secondhand dealer who is in possession of the property.
(d) When property that is in the possession of a licensed pawnbroker or secondhand dealer is subject to a hold as provided in subdivision (a), and the property is no longer required for the purpose of a criminal investigation or criminal proceeding, the law enforcement agency that placed the hold on the property shall release the hold on the property and return the property to the licensed pawnbroker or secondhand dealer from which it was taken if the law enforcement agency took physical possession of the property.
(e) If a pledgor seeks to redeem property that is subject to a hold, the licensed pawnbroker shall advise the pledgor of the name of the peace officer who placed the hold on the property and the name of the law enforcement agency of which the officer is a member. If the property is not required to be held pursuant to a criminal prosecution the hold shall be released.
(f) Whenever information regarding allegedly lost, stolen, or embezzled property is entered into the Department of Justice automated property system or automated firearms system, and the property is thereafter identified and found to be in the possession of a licensed pawnbroker or secondhand dealer, the property shall be placed on a hold pursuant to this section and Section 11108.5 of the Penal Code.
(g) If the hold, including any additional hold, is allowed to lapse, or 60 days elapse following the delivery of the notice required to be given by subdivision (c) to the person who reported the property to be lost, stolen, or embezzled without a claim being made by that person, whichever is later, the licensed pawnbroker or secondhand dealer may mail under a certificate of mailing issued by the United States Post Office, addressed to the law enforcement agency that placed the property on hold, a written request to delete the property listing from the Department of Justice automated property system or automated firearms system, as is applicable. Within 30 days after the request has been mailed, the law enforcement agency shall either cause the property listing to be deleted as requested or place a hold on the property. If no law enforcement agency takes any further action with respect to the property within 45 days after the mailing of the request, the licensed pawnbroker or secondhand dealer may presume that the property listing has been deleted as requested and may thereafter deal with the property accordingly, and shall not be subject to liability arising from the failure of the removal of the property listing from the Department of Justice automated property system or automated firearms system.
(h) A licensed pawnbroker or secondhand dealer shall not refuse a request to place property in their possession on hold pursuant to this section when a peace officer has probable cause to believe the property is lost, stolen, or embezzled. If a licensed pawnbroker or secondhand dealer refuses a request to place property on hold pursuant to this section, the property may be seized with or without a warrant. The peace officer shall issue a receipt, as described in Section 21206.7 of the Financial Code, left with the licensed pawnbroker or secondhand dealer. The property shall be disposed of pursuant to procedures set forth in Section 21206.8 of the Financial Code, which shall apply to both licensed pawnbrokers and secondhand dealers under this section.
(i) If a search warrant is issued for the search of the business of a licensed pawnbroker or secondhand dealer to secure lost, stolen, or embezzled property that has been placed on hold, the hold shall continue for the duration that the property remains subject to the court's jurisdiction. Notwithstanding any other law, when the use of the property seized for a criminal investigation or criminal proceeding has concluded, the property shall be disposed of pursuant to subdivision (d).
(j) If a civil or criminal court is called upon to adjudicate the competing claims of a licensed pawnbroker or secondhand dealer and another party claiming ownership or an interest in the property that is or was subject to a hold pursuant to this section, the court shall award possession of the property only after due consideration is given to the effect of Section 2403 of the Commercial Code.
(k) A licensed pawnbroker or secondhand dealer is not subject to civil liability for compliance with this section.
 
Cite as Ca. Bus. and Prof. Code § 21647

Note: This section is set out twice. See also Ca. Bus. and Prof. Code § 21647, effective until 1/1/2014.