Bill Text: CA AB160 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Criminal profiteering: counterfeit labels: sales and use taxes.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2015-10-02 - Chaptered by Secretary of State - Chapter 427, Statutes of 2015. [AB160 Detail]

Download: California-2015-AB160-Amended.html

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BILL NUMBER: AB 160	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 19, 2015
	AMENDED IN ASSEMBLY  MARCH 16, 2015

INTRODUCED BY   Assembly Member Dababneh

                        JANUARY 21, 2015

   An act to amend  Sections   Section 
186.2  and 186.8  of the Penal Code, and to amend
Sections 6007 and 6009.2 of the Revenue and Taxation Code, relating
to criminal profiteering.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 160, as amended, Dababneh. Criminal profiteering: counterfeit
labels: sales and use taxes.
   Existing law, the California Control of Profits of Organized Crime
Act, provides the procedure for the forfeiture of property and
proceeds acquired through a pattern of criminal profiteering
activity, as specified, and requires the prosecution to file a
petition for forfeiture in conjunction with certain criminal charges.
Under existing law, criminal profiteering activity is defined to
include specified crimes, including forgery and offenses relating to
counterfeit of a registered mark. Existing law also defines organized
crime for the purposes of these provisions.
   This bill would include within the definition of criminal
profiteering activity offenses relating to piracy, insurance fraud,
and tax fraud, as specified. By expanding the list of offenses that
may subject a person to prosecution for criminal profiteering
activity, this bill would impose a state-mandated local program. The
bill would also broaden the definition of organized crime to include
any crime that is of a conspiratorial  nature and that is
achieved through   or organized nature, or that involves
the  planning and coordination of individual  efforts.
  efforts, and   seeks to supply illegal goods
and services, or conduct illegal activities that involve fraud or
deceit for monetary gain in any way.  
   Existing law provides for the distribution of the money forfeited
and the proceeds from the sale of property forfeited for conviction
in connection with a pattern of criminal profiteering activity.
 
   This bill would, in any case involving a felony violation of a
specified offense relating to piracy, insurance fraud, or tax fraud,
require the proceeds to be distributed, at the discretion of the
court, in a specified priority. 
   Existing law, the Sales and Use Tax Law, imposes a tax on
retailers measured by the gross receipts from the sale of tangible
personal property sold at retail in this state, or on the storage,
use, or other consumption in this state of tangible personal property
purchased from any retailer for storage, use, or other consumption
in this state. Existing law provides that a "retail sale" or "sale at
retail" includes any sale by a convicted seller, as defined, of
tangible personal property with a counterfeit mark on, or in
connection with, that sale, regardless of whether the sale is for
resale in the regular course of business. Existing law provides that
"storage" or "use" includes a purchase by a convicted purchaser, as
defined, of tangible personal property with a counterfeit mark on, or
in connection with, that purchase, regardless of whether the
purchase is for resale in the regular course of business.
   Under this bill, a "retail sale" or "sale at retail" additionally
would include any sale by a convicted seller of tangible personal
property with a counterfeit label or an illicit label, as specified.
The bill similarly would provide that "storage" and "use"
additionally would include a purchase by a convicted purchaser of
tangible personal property with a counterfeit label or an illicit
label, as specified.
   The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes
counties and cities to impose local sales and use taxes in conformity
with the Sales and Use Tax Law, and existing law authorizes
districts, as specified, to impose transactions and use taxes in
accordance with the Transactions and Use Tax Law, which generally
conforms to the Sales and Use Tax Law. Amendments to state sales and
use taxes are incorporated into these laws.
   The amendments made by this bill would be incorporated into these
laws.
   This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 186.2 of the Penal Code is amended to read:
   186.2.  For purposes of this chapter, the following definitions
apply:
   (a) "Criminal profiteering activity" means any act committed or
attempted or any threat made for financial gain or advantage, which
act or threat may be charged as a crime under any of the following
sections:
   (1) Arson, as defined in Section 451.
   (2) Bribery, as defined in Sections 67, 67.5, and 68.
   (3) Child pornography or exploitation, as defined in subdivision
(b) of Section 311.2, or Section 311.3 or 311.4, which may be
prosecuted as a felony.
   (4) Felonious assault, as defined in Section 245.
   (5) Embezzlement, as defined in Sections 424 and 503.
   (6) Extortion, as defined in Section 518.
   (7) Forgery, as defined in Section 470.
   (8) Gambling, as defined in Sections 337a to 337f, inclusive, and
Section 337i, except the activities of a person who participates
solely as an individual bettor.
   (9) Kidnapping, as defined in Section 207.
   (10) Mayhem, as defined in Section 203.
   (11) Murder, as defined in Section 187.
   (12) Pimping and pandering, as defined in Section 266.
   (13) Receiving stolen property, as defined in Section 496.
   (14) Robbery, as defined in Section 211.
   (15) Solicitation of crimes, as defined in Section 653f.
   (16) Grand theft, as defined in Section 487 or subdivision (a) of
Section 487a.
   (17) Trafficking in controlled substances, as defined in Sections
11351, 11352, and 11353 of the Health and Safety Code.
   (18) Violation of the laws governing corporate securities, as
defined in Section 25541 of the Corporations Code.
   (19) Offenses contained in Chapter 7.5 (commencing with Section
311) of Title 9, relating to obscene matter, or in Chapter 7.6
(commencing with Section 313) of Title 9, relating to harmful matter
that may be prosecuted as a felony.
   (20) Presentation of a false or fraudulent claim, as defined in
Section 550.
   (21) False or fraudulent activities, schemes, or artifices, as
described in Section 14107 of the Welfare and Institutions Code.
   (22) Money laundering, as defined in Section 186.10.
   (23) Offenses relating to the counterfeit of a registered mark, as
specified in Section 350, or offenses relating to piracy, as
specified in Section 653w.
   (24) Offenses relating to the unauthorized access to computers,
computer systems, and computer data, as specified in Section 502.
   (25) Conspiracy to commit any of the crimes listed above, as
defined in Section 182.
   (26) Subdivision (a) of Section 186.22, or a felony subject to
enhancement as specified in subdivision (b) of Section 186.22.
   (27) Offenses related to fraud or theft against the state's
beverage container recycling program, including, but not limited to,
those offenses specified in this subdivision and those criminal
offenses specified in the California Beverage Container Recycling and
Litter Reduction Act, commencing at Section 14500 of the Public
Resources Code.
   (28) Human trafficking, as defined in Section 236.1.
   (29) Any crime in which the perpetrator induces, encourages, or
persuades a person under 18 years of age to engage in a commercial
sex act. For purposes of this paragraph, a commercial sex act means
any sexual conduct on account of which anything of value is given or
received by any person.
   (30) Any crime in which the perpetrator, through force, fear,
coercion, deceit, violence, duress, menace, or threat of unlawful
injury to the victim or to another person, causes a person under 18
years of age to engage in a commercial sex act. For purposes of this
paragraph, a commercial sex act means any sexual conduct on account
of which anything of value is given or received by any person.
   (31) Theft of personal identifying information, as defined in
Section 530.5.
   (32) Offenses involving the theft of a motor vehicle, as specified
in Section 10851 of the Vehicle Code.
   (33) Abduction or procurement by fraudulent inducement for
prostitution, as defined in Section 266a.
   (34) Offenses relating to insurance fraud, as specified in
Sections 2106, 2108, 2109, 2110, 2110.3, 2110.5, 2110.7, and 2117 of
the Unemployment Insurance Code, or offenses relating to tax fraud,
as specified in Sections 6452, 6455, 7152, 7153.5, 19705, 19706,
19708, 19721, 30471, 30472, 30480, and 60707 of the Revenue and
Taxation Code and Sections 2117.5, 2118, and 2118.5 of the
Unemployment Insurance Code.
   (b) (1) "Pattern of criminal profiteering activity" means engaging
in at least two incidents of criminal profiteering, as defined by
this chapter, that meet the following requirements:
   (A) Have the same or a similar purpose, result, principals,
victims, or methods of commission, or are otherwise interrelated by
distinguishing characteristics.
   (B) Are not isolated events.
   (C) Were committed as a criminal activity of organized crime.
   (2) Acts that would constitute a "pattern of criminal profiteering
activity" may not be used by a prosecuting agency to seek the
remedies provided by this chapter unless the underlying offense
occurred after the effective date of this chapter and the prior act
occurred within 10 years, excluding any period of imprisonment, of
the commission of the underlying offense. A prior act may not be used
by a prosecuting agency to seek remedies provided by this chapter if
a prosecution for that act resulted in an acquittal.
   (c) "Prosecuting agency" means the Attorney General or the
district attorney of any county.
   (d)  (1)    "Organized crime" means crime that
 is   has both of the following characteristics:

    (A)     The crime is  of a
conspiratorial  nature and that is achieved through 
 or organized nature, or   involves the  planning
and coordination of individual efforts.  "Organized 

   (B) The crime seeks to supply illegal goods and services, or
conduct illegal activities that involve fraud or deceit for monetary
gain in any way. 
    (2)     "Organized  crime" also means
crime committed by a criminal street gang, as defined in subdivision
(f) of Section 186.22. "Organized crime" also means false or
fraudulent activities, schemes, or artifices, as described in Section
14107 of the Welfare and Institutions Code, and the theft of
personal identifying information, as defined in Section 530.5.
   (e) "Underlying offense" means an offense enumerated in
subdivision (a) for which the defendant is being prosecuted. 

  SEC. 2.    Section 186.8 of the Penal Code is
amended to read:
   186.8.  Notwithstanding that no response or claim has been filed
pursuant to Section 186.5, in all cases in which property is
forfeited pursuant to this chapter and, if necessary, sold by the
Department of General Services or local governmental entity, the
money forfeited or the proceeds of sale shall be distributed by the
state or local governmental entity as follows:
   (a) To the bona fide or innocent purchaser, conditional sales
vendor, or holder of a valid lien, mortgage, or security interest, if
any, up to the amount of his or her interest in the property or
proceeds, when the court declaring the forfeiture orders a
distribution to that person. The court shall endeavor to discover all
those lienholders and protect their interests and may, at its
discretion, order the proceeds placed in escrow for up to an
additional 60 days to ensure that all valid claims are received and
processed.
   (b) To the Department of General Services or local governmental
entity for all expenditures made or incurred by it in connection with
the sale of the property, including expenditures for any necessary
repairs, storage, or transportation of any property seized under this
chapter.
   (c) To the General Fund of the state or a general fund of a local
governmental entity, whichever prosecutes.
   (d) In any case involving a violation of subdivision (b) of
Section 311.2, or Section 311.3 or 311.4, in lieu of the distribution
of the proceeds provided for by subdivisions (b) and (c), the
proceeds shall be deposited in the county children's trust fund,
established pursuant to Section 18966 of the Welfare and Institutions
Code, of the county that filed the petition of forfeiture. If the
county does not have a children's trust fund, the funds shall be
deposited in the State Children's Trust Fund, established pursuant to
Section 18969 of the Welfare and Institutions Code.
   (e) In any case involving crimes against the state beverage
container recycling program, in lieu of the distribution of proceeds
provided in subdivision (c), the proceeds shall be deposited in the
penalty account established pursuant to subdivision (d) of Section
14580 of the Public Resources Code, except that a portion of the
proceeds equivalent to the cost of prosecution in the case shall be
distributed to the local prosecuting entity that filed the petition
of forfeiture.
   (f) (1) In any case described in paragraph (29) or (30) of
subdivision (a) of Section 186.2, or paragraph (33) of subdivision
(a) of Section 186.2 in which the victim is a minor, in lieu of the
distribution provided for in subdivision (c), the proceeds shall be
deposited in the Victim-Witness Assistance Fund to be available for
appropriation to fund child sexual exploitation and child sexual
abuse victim counseling centers and prevention programs under Section
13837. Fifty percent of the funds deposited in the Victim-Witness
Assistance Fund pursuant to this subdivision shall be granted to
community-based organizations that serve minor victims of human
trafficking.
   (2) Notwithstanding paragraph (1), any proceeds specified in
paragraph (1) that would otherwise be distributed to the General Fund
of the state under subdivision (c) pursuant to a paragraph in
subdivision (a) of Section 186.2 other than paragraph (29) or (30) of
subdivision (a) of Section 186.2, or paragraph (33) of subdivision
(a) of Section 186.2 in which the victim is a minor, shall, except as
otherwise required by law, continue to be distributed to the General
Fund of the state as specified in subdivision (c).
   (g) In any case involving a felony violation of a crime specified
in paragraph (23) or (34) of subdivision (a) of Section 186.2, the
proceeds shall be distributed, at the discretion of the court, in the
following priority:
   (1) To the victims of the crime.
   (2) To cover the costs of investigation.
   (3) To the General Fund of the state. 
   SEC. 3.   SEC. 2.   Section 6007 of the
Revenue and Taxation Code is amended to read:
   6007.  (a) (1) A "retail sale" or "sale at retail" means a sale
for any purpose other than resale in the regular course of business
in the form of tangible personal property.
   (2) When tangible personal property is delivered by an owner or
former owner thereof, or by a factor or agent of that owner, former
owner, or factor to a consumer or to a person for redelivery to a
consumer, pursuant to a retail sale made by a retailer not engaged in
business in this state, the person making the delivery shall be
deemed the retailer of that property. He or she shall include the
retail selling price of the property in his or her gross receipts or
sales price.
   (b) (1) Notwithstanding subdivision (a), a "retail sale" or "sale
at retail" shall include any sale by a convicted seller of tangible
personal property with a counterfeit, mark, a counterfeit label, or
an illicit label on that property, or in connection with that sale,
regardless of whether the sale is for resale in the regular course of
business.
   (2) For purposes of this subdivision, all of the following shall
apply:
   (A) A "convicted seller" means a person convicted of a 
counterfeiting offense, including, but not limited to, a 
violation under Section 350 or 653w of the Penal Code or Section
2318, 2319, or 2320 of Title 18 of the United States Code on or after
the date of sale.
   (B) "Counterfeit mark" has the same meaning as that term is
defined in Section 2320 of Title 18 of the United States Code.
   (C) "Counterfeit label" has the same meaning as that term is
defined in Section 2318 of Title 18 of the United States Code.
   (D) "Illicit label" has the same meaning as that term is defined
in Section 2318 of Title 18 of the United States Code.
   (E) Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of, and Article 1 (commencing with Section 17500) of
Chapter 1 of Part 3 of Division 7 of, the Business and Professions
Code, and Title 1.5 (commencing with Section 1750) of Part 4 of
Division 3 of the Civil Code shall not apply to any person other than
a convicted seller.
   (F) Notwithstanding Article 2 (commencing with Section 6481) of
Chapter 5, any notice of deficiency determination to a convicted
seller shall be mailed within one year after the last day of the
calendar month following the date of conviction.
   SEC. 4.   SEC. 3.   Section 6009.2 of
the Revenue and Taxation Code is amended to read:
   6009.2.  (a) Notwithstanding Sections 6008, 6009, and 6009.1,
"storage" and "use" each shall include a purchase by a convicted
purchaser of tangible personal property with a counterfeit mark, a
counterfeit label, or an illicit label on that property, or in
connection with that purchase, regardless of whether the purchase is
for resale in the regular course of business.
   (b) "Convicted purchaser" means a person convicted of a 
counterfeiting offense, including, but not limited to, a 
violation under Section 350 or 653w of the Penal Code or Section
2318, 2319, or 2320 of Title 18 of the United States Code on or after
the date of purchase.
   (c) For purposes of this section, Chapter 5 (commencing with
Section 17200) of Part 2 of Division 7 of, and Article 1 (commencing
with Section 17500) of Chapter 1 of Part 3 of Division 7 of, the
Business and Professions Code, and Title 1.5 (commencing with Section
1750) of Part 4 of Division 3 of the Civil Code shall not apply to
any person other than a convicted seller.
   (d) "Counterfeit mark" has the same meaning as that term is
defined in Section 2320 of Title 18 of the United States Code.
   (e) "Counterfeit label" has the same meaning as that term is
defined in Section 2318 of Title 18 of the United States Code.
   (f) "Illicit label" has the same meaning as that term is defined
in Section 2318 of Title 18 of the United States Code.
   (g) Notwithstanding Article 2 (commencing with Section 6481) of
Chapter 5, any notice of deficiency determination to a convicted
purchaser shall be mailed within one year after the last day of the
calendar month following the date of conviction.
   SEC. 5.   SEC. 4.   No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.