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 rdf_Descriptions 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 rdf_Descriptions 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, rdf_Descriptions 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 rdf_Descriptions 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 . A copy of SB1893 may be viewed at Senator Burton may be contacted at 916-445-1412, or email .
