: A current bill before California lawmakers aimed at curtailing
the trafficking of stolen merchandise could seriously hamper the
antiques and fine art trade throughout the Golden State. Proposed
regulations for dealers and auctioneers are stringent. Included
are such drastic measures as taking a fingerprint from everyone
that they buy or take consignments from for items exceeding $250
in value. Dealers and auction houses will also be required to
report all purchases of $250 or more to police within 24 hours,
and hold the merchandise for 30 days prior to selling it.
The bill, SB 1893, takes aim at "pawnbrokers, secondhand dealers,
coin dealers and business machine dealers" - antiques and fine
art dealers, as well as auction houses, are legally classified as
secondhand dealers.
"It is the intent of the Legislature in enacting this article to
curtail the dissemination of stolen property, to facilitate the
rapid recovery of stolen property, and to aid the State Board of
Equalization to detect possible sales tax evasion by a uniform,
statewide, state-administered system of licensing and
regulation," states the opening paragraph of the bill presented
by Democratic Senator John L. Burton.
Critics of the bill argue that it will have the exact opposite
effect and will be detrimental not only to those dealing in
antiques and fine art, but also to the municipalities throughout
the state.
The bill was originally proposed by a group representing the
pawnbrokers, whose industry would benefit from it, yet somehow
the auction and antiques industry got lumped into the bill. "It
is unfortunate because [the pawnbrokers] operate completely
opposite from the way the auction industry and the antiques
dealers work," stated Norm Haigh, president of the California
State Auctioneers Association (CSAA). "They do not know or
understand the auction principles and the needs of our industry.
It is unfortunate that we have been included in the bill. If this
bill gets passed, it is going to have a drastic effect on the way
all the auctions and antiques dealers operate in the state," he
said.
"We were caught with our pants down, so to speak," said Haigh,
"No one from the antiques business knew about [the bill] during
the initial phase. We didn't find out until it had already been
passed by the senate." Haigh commented that a similar bill had
been proposed in 1980 and was defeated when the auctioneers
created a state licensing board. State government funding dried
up in 1990, and the board was disbanded in 1992.
CSAA has hired a lobbyist whose focus will be to get the
auctioneers, antiques and fine art dealers exempted from the bill
and to reinstate the licensing board for the auctioneers. "We are
mustering all the support we can get and the antiques dealers
have joined us on this. We are going to try and get them to take
another look at the bill and exempt us," said Haigh.
The first phase of enacting the bill has already passed the
California senate and it is now headed to the state assembly for
consideration. The effort to derail the bill is spearheaded not
only by CSAA, but also by show manager and auctioneer Allen
Michaan of Auctions By The Bay in Alameda, Calif.
Michaan has created a groundswell of opposition in the short
period of time that he has been aware of the bill, ranging from
local dealers, auctioneers and show promoters to the chief of
police in Alameda, where major month-ly antiques shows take
place. "I have been in contact with the chief in Alameda and he
is pulling his hair out over this," he said. "He could
potentially get thousands of these forms from every one of our
shows," said Michaan, referring to his monthly Alameda Point
Antiques and Collectibles Fair, which is often referred to as
"Brimfield West."
Michaan has been handing out flyers and sending emails by the
tens-of-thousands pleading for support and stating, "Don't let
our business or hobby be regulated into oblivion."
"The sheer logistics of this are impossible," states Michaan,
"This bill was crafted to aid in the return of stolen materials
and to increase revenue; in fact, the bill achieves neither. It
is not a rational concept that it will recover stolen property.
The recovery of stolen materials will be reduced, because rather
than be fingerprinted, the thieves will sell the items out of
state. The revenues from sales tax will decrease because many of
the dealers we have spoken with say it will drive them out of the
business."
Michaan commented that the process will cost the state untold
amounts of both money and resources. "It creates a huge burden on
our police departments that are already overburdened and
underfunded," he said. "They are already having a hard time
responding to serious crimes. How are they going to file and
track the thousands of forms that will be filed after every one
of my shows alone?"
Michaan is also deeply concerned for his auction business, "There
are so many barriers, there is so much intrusion into our private
business and our lives. I am worried about asking consignors for
their fingerprints. A lot of them will tell me, 'No.' A lot of
people are worried about government intrusion. The end result is
that they won't consign. Things are tough enough these days in
this business without a bill like this."
In California, the term "secondhand dealer" refers to "any
person, firm, partnership or business entity whose business
includes the buying, selling, trading, accepting for auction or
for sale on consignment any secondhand tangible personal
property." The definition of "secondhand tangible personal
property" includes, among other things, jewelry, sterling silver
utensils, coin collections, precious metals, stones or gems,
antiques and collectibles with an individual value of $250 or
more.
An electronic process has been proposed but will not be
implemented for several years. In the mean-time, dealers will be
required to register with the state and keep all records
manually.
Antiques and fine art dealers, as well as auctioneers, must first
register with their chiefs of police and pass a Department of
Justice criminal background check prior to being issued a
license/vendors permit. Until the state gets its electronic
monitoring system in place, dealers will be required to report
each purchase within 24 hours to the chief of police in the
district where the purchase was made.
As outlined in the legislation, "all secondhand tangible personal
property that is acquired by purchase, trade, or accepted for
sale on consignment or for auction shall be reported. The report
shall be transmitted daily, or on the first working day after
receipt or purchase of the property" and shall be delivered to
the chief of police or to the sheriff.
Another section outlines the requirements for supplied
information and states the report shall be legible, prepared in
English and shall include, but not be limited to, the name and
current address of the seller or consignor, a complete and
reasonably accurate description of the property, and
certification that the seller is in fact the owner of the
property or has the authority to sell or consign the property. It
must also state that there has not been conveyed a right to, or
granted a lien against, the property.
The identification of the intended seller or consignor of the
property becomes even more complicated. "At the time of the
acquisition, a legible fingerprint shall be taken from the
intended seller or consignor," and the "fingerprint shall be
maintained by the dealer for a period of three years from the
date it was taken and shall be made available for inspection by
any law enforcement officer or employee of the Department of
Justice." A US passport or state issued identification card must
also be presented, multiple forms of identification must be
presented by foreign sellers or consignors.
Identity information must be updated only once every 12 months
involving repeated sales, although reports for each purchase must
still be presented to police within the one-business-day
timeframe.
Moreover, the legislation also requires a dealer to hold any
merchandise purchased for 30 days from the time it was originally
reported to the state. In special circumstances, items may be
sold sooner if the chief of police is notified. During the 30-day
holding period, dealers are required to produce the property
within 24 hours when requested by police.
Currently, becoming an antiques dealer in California is a fairly
simple procedure. One need only apply for a tax identification
number (resale number). That process, however, will also become
complicated and expensive. An initial processing fee of $195 is
to be imposed on top of a $100 license issuance fee, an
additional $50 for the licensing authority, and $32 for the
criminal background check. The license is renewable yearly
afterwards for a $175 fee and an additional $50 fee for the
licensing authority.
SB1893 also contains a host of regulations revolving around gun
shows.
On yet another front that is not clearly addressed by the bill,
Michaan queried, "What about eBay? Does this law effect everyone
from California that is selling items to California residents?"
"We are raising as much cane as we can," said Haigh. "We need to
get somebody up there to say 'Hey, we need to take another look
at this."'
"The clock is ticking against us, and God forbid that other
states jump on the bandwagon and model laws after this one," said
Michaan. The auctioneer/show promoter suggested that California
residents and anyone who buys or sells antiques in California
contact the state committee members, assembly representatives and
the governor.
Requests for comments from Senator Burton regarding these issues
went unanswered as of press time.
Further information can be obtained through Michaan at
510-740-0220, ext 103, or by email at
amichaan@auctionsbythebay.com. CSAA can be reached at
888-541-8084, its website is http://www.caauctioneers.org/.
A copy of SB1893 may be viewed at http://www.leginfo.ca.gov/
Senator Burton may be contacted at 916-445-1412, or email
mailto:Senator.Burton@sen.ca.gov.
