Secondhand dealers may be affected by changes in law
Confusing legal language has created controversy surrounding new changes to state laws that affect secondhand dealers using cash to purchase secondhand property, as well as what records are kept and reported to law enforcement.
Some people are concerned the broad language of the law will have unintended consequences.
In June, the state legislature passed House Bill 195, otherwise known as Act 389. Both House and Senate passed the bill unanimously, except for a single “nay” from District 32 Senator Neil Riser. Governor Jindal signed the bill into law on July 1.
Acadiana’s CBS affiliate KLFY carried a story on October 18 characterizing the law’s restriction as a ban on using cash for all secondhand transactions. The story was then picked up by numerous Internet blogs, and spread around social media sites such as Facebook.
The bill’s author District 65 Representative Clif Richardson responded with a memorandum from House Legislative Services Executive Director Mary Quaid explaining that reports of the law’s broad cash restrictions were due to incorrect information.
According to the memorandum, “This bill is basically a recodification and merger of the law on secondhand dealers, junk dealers, and purchasers of copper, into one unified body of law…
“The purpose of the original acts enacted through the last several years is to create an inhospitable climate for criminals who are trying to fence stolen property and those who make a living off of purchasing stolen property.”
Quaid’s memorandum also explains, “…it does NOT prohibit a person who holds a garage sale less than (sic) once a month from accepting cash as a form of payment. It does NOT prohibit a person who shops at garage sales, even every day, from making purchases with cash.”
The text of the law only prohibits the use of cash for purchases of secondhand property by secondhand dealers. It reads:
“A secondhand dealer shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property.”
After the memorandum was released, most sources retracted their stories.
Some people still fear the law’s broad language could unintentionally define a large number of unwitting citizens as secondhand dealers, including lone dissenter: Riser.
At issue is the law’s definition of what makes a person a secondhand dealer. The law reads:
“Anyone, other than a nonprofit entity, who buys, sells, trades in, or otherwise acquires or disposes of junk or used or secondhand property more frequently than once per month from any other person, other than a nonprofit entity, shall be deemed as being engaged in the business of a secondhand dealer.”
Attorney Thad D. Ackel, Jr. believes the phrase “more frequently than once per month” encompasses a greater number of circumstances than the law intends.
“What does ‘once per month’ mean? Does it mean one transaction, one sale, one day or some other period of time?”
Ackel asked. “That’s part of the problem that I have with the act. The law is vague and overly broad.”
Riser had similar concerns. “My area is a heavy agricultural district. You have an individual that at the end of farming season says ‘Okay, we’re going to clean up around the shop,’ and they take something up to the salvage yard.
“They come back and say ‘Hey, we left this one thing out. We left some scrap laying around here.’ My interpretation of the law is (when they make the second transaction) they become a secondhand dealer,” Riser said.
The farmer would then be bound by the restriction on secondhand purchases with cash and be required to abide by the reporting requirements of the law. Riser expressed concern the farmer would go about his normal business never realizing he could possibly be considered afoul of the law.
Riser also expressed dissatisfaction with the idea of any restrictions on cash usage.
“When it came across my desk, and it banned United States currency, on the United States currency it says ‘this note is legal tender for all debts private and public.’ When we start limiting that, where you can’t use the U.S. currency, I don’t think we should be making that restriction. I don’t think that government should be getting into our business that much,” Riser said.
Ackel also expressed concern about the restriction on cash usage. According to his website, Ackel is involved in an effort to repeal H.B.195/Act 389 and add an amendment to the state constitution preventing any restrictions by the state on cash usage.
In response, Richardson pointed out there are many precedents of restrictions on cash usage. In an email he quoted a FAQ from U.S. Department of the Treasury’s website:
“United States money…(is) a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.”
Other than concerns about unintended consequences and restriction on the use of cash, Riser had no problem with the stated intention of the law.
“It’s an anti-crime bill trying to tighten down more on criminal activities that seem to be drug related,” Riser said referring to the theft and sale of scrap metals such as copper and aluminum.
“That part of the bill I’m not in disagreement with at all. I understand that.”
(Editor’s Note: This is the first of three articles about the controversy surrounding, the enforcement of, and the effect on local businesses by H.B.195/Act 389.)
READ THE LAW:
R.S. 37:1861 et seq. (Secondhand Dealers Law)