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1. Pawn Shop & Secondhand Store OrdinanceNWOM110 !111111101!1 111211,1111" il,1122 I " "011741 A ,I 33-2 1- Avg Eayd — F0 13ow I q 9 7 M-r 54 903 Ta.&P� (406) 758 -7780 -- ✓+ay, (406) 758 --77gq :Striving to Exceed Expectations' REPORT: Doug Russell, City Manager FROM: roger Nasset, Chief of Police SUBJECT: Proposed Pawn Shop & Secondhand Store Ordinance MEETING DATE: October 27, 2014 BACKGROUND: The City of Kalispell currently has a pawn shop/secondhand dealer ordinance (municipal code sections 20-1 thru 20-10) which requires those businesses to document and submit records on a daily basis to the police department to aid in the investigation of stolen property. This requirement is authorized under state law (7-21-4207 MCA). The documentation and submittal process identified in the existing ordinance that was drafted in 1947 is problematic for law enforcement and the businesses as the paper -intensive recording and tracking system is burdensome and archaic. Changes in technology now allow for more simple and effective reporting compliance. The proposed ordinance would replace the paper system with electronic reporting to a database that quickly identifies stolen items that have been unwittingly acquired by a pawn or second hand business. This will not only aid in the return of stolen items and prosecution of the offenders but will also act as deterrence as it becomes known that these businesses cannot be easily used to fence stolen goods. The police department currently subscribes to and utilizes the "LeadsOnline" database, which is used by twenty three law enforcement agencies in Montana as well as 2,973 other law enforcement agencies nationwide. Ninety-four businesses in Montana are currently uploading to "LeadsOnLine" which provides a simple computer interface to report the required information on a subscription -free basis to the business. The investment for the business is a computer and access to the internet. Fallowing the council meeting on October 6, the police department invited all twelve of the businesses in the city that may be affected by the pawn ordinance to meet and discuss the ordinance. The meeting, held on October 20, was attended by employees from all three in -town pawn shops, a couple of county pawn shops/second hand dealers, and Flathead County Sheriff Curry. At the work session on Monday, we will review the proposed amendments to the ordinance. ROGER NASSEf'. CHIEF OF POLICE (TABLED AT THE OCTOBER 6, 20I4 MEETING) ORDINANCE NO. 1746 AN ORDINANCE AMENDING CHAPTER 20 OF THE KALISPELL MUNICIPAL CODES RELATING TO PAWNBROKERS, ,JUNK AND SECONDHAND DEALERS, RESCINDING KMC 20-1 THROUGH 2O-10 AND REPLACING THE RESCINDED PARTS AS SET FORTH, DECLARING AN EFFECTIVE DATE AND AUTHORIZING THE CITY ATTORNEY TO CODIFY THE SAME. WHEREAS, pursuant to Kalispell Municipal Code Chapter 20, the City of Kalispell regulates the business of Pawnbrokers, Junk and Secondhand Dealers, primarily for the purposes of preventing such businesses from being utilized by third parties to sell stolen goods, to assist in the recovery stolen goods conveyed thereto and to obtain evidence in the investigation of thefts; and WHEREAS, the current code is found to be inadequate to serve the above stated purposes; and WHEREAS, the Kalispell City Council therefore finds that it is in the best interest of the safety and welfare of the City and its residents that Chapter 20 of the Kalispell Municipal Code be amended to update the regulation of Pawnbrokers and Secondhand Dealers. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION 1. The City of Kalispell Municipal Code is hereby amended as set forth in Exhibit "A", attached hereto and incorporated fully herein by this reference. SECTION 2. The City Attorney is hereby authorized and directed to recodify this Ordinance. SECTION 3. This Ordinance shall take effect thirty (30) days after its final passage. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL THIS DAY OF OCTOBER, 2014. Mark Johnson Mayor ►_rr09k,16 Theresa White City Clerk EXIHIBIT "A" Chapter 20 PAWNBROKERS, jUNK AND SECONDHAND DEALERS Any per -son whe lowis meney en deposit er- pledge ef pefsenal pr-epei4y or ethef zva4uable thing er who deals in the purehasing of per-sefial pr-epet4y of other- valuable thing on eondition 0 selling the same baek again at a stipulated priee or who loans meney seeured by ehaRel fnei4gage hereby -defined . MIMMM-WAMCMIN M. rvmp .... Mr mm. N. )f pledging of selling the same, whieh book as well as the artieles pawned or- par-ehased L®s:Es = - - - - - - - - - ..I-TIMMIMMM .. sk. FallikiffolmIT"m .ARM-olum .. �. 20-1 Definitions A. "Pawnbroker" means any person or entity who within the City, loans moneyposit or pledge of personal property or any valuable thing, or who deals in the purchasing of personal property or valuable things on condition of selling the same back at a stipulated price whether he does the same for himself or as an agent of some person or firm or corporation, who by any means method or device loans moneypersonal property when the same is deposited for securit o�posited for any other purpose. B. "Secondhand Dealer" means any person or entity, who, within the City, as a business engages in the purchase, sale, trade, barter, reacling or exchange of secondhand goods, wares or merchandise-, or any person who keeps any store, shop, room or place where secondhand goods wares or merchandise of any kind or description, are bought, sold, traded, bartered, recycled or exchanged is defined as a secondhand dealer within the meaning of this chapter; provided however, that this chapter shall not apply to bona fide trade or turn -ins of secondhand goods, wares or merchandise or other goods where no cash is transferred or paid by the merchant, or to auction houses. C. "Customer" means any person or entity who, within the City, deposits pledges sells trades barters or exchanges personal property, secondhand good, wares, merchandise or other valuable things to an operator as set forth in this chapter. 20-2 Exceptions and Exclusions A. Pawnbrokers and secondhand dealers are excluded from uploading information into the selected database per 20-3 of this ordinance if the dealer meets one or more of the following criteria: 1. The item purchased by the dealer is under $50.00 in value except if the items are purchased in a quantity of 25 items or more, such as 25 or more DVDs CD's etc Jewelry (unless scrap) shall be photographed and the photographs maintained by the purchaser for a period of one year and/or the photo uploaded to the database. 2. The item is used adult or used children's apparel. 3. The seller is a known customer of the dealer and had contracted with the business..prior to the property being presented for sale such as estate sale purchase The exception does not include over-the-counter contracted purchases. 4. The property was obtained through a bidding process through a reputable, licensed auction house. 5. The property is brokered with the business. 6. The acquisition for resale of and goods by a nonprofit corporation or nonprofit association recognized as such by the Internal Revenue Service or by a bona fide fraternal or bona fide religious organization or association. 7. The acquisition for resale or trade of coins or of monetized bullion, or commercial grade ingots of gold, silver or other precious metals including, but not limited to, gold, silver, platinum, which ingot bears a stamp or other marking indicating or reflecting the government, governmental agency, private corporation, or banking institution issuing or producing the ingot. "Commercial grade ingots" is defined herein as 0.99 fine ingots of gold, silver 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 fabricators as to their assay fineness. 20-3 Register A. Any operator who engages in the activities set forth in Section 1 shall keep a legible register or record of all property purchased or taken under that section, along with l . A description of each article, including, but not limited to, identification number, serial number, model number, brand name or other identification marks on such article; and a description by weight and design of precious and semi-precious metals or stones. 2. The customer's name and date of birth and documentation from one or more of the following: A valid state identification card, A valid state driver's license; A military identification card; A valid passport,- An alien registration card: An official identification document lawfully issued by a state or federal government. 3. The current street address, city, state and zip code of the customer's residence. B. All transactions shall be kept in a numerical register in the order in which they occur which register shall show the printed name and written or electronic signature of the pawnbroker, secondhand dealer or agent, the purchase price or other monetary amount of the transaction the date time and place of the transaction, and an accurate and detailed account and description of each item of tangible personal property involved, including, but not limited to, any and all trademarks identification numbers, serial numbers, model numbers, owner -applied numbers, brand names or other identifying marks on such property_ 20-4 Examination No person keeping records as required in Section 2 shall fail, neglect, or refuse to exhibit the same to any law enforcement officer or other person, when requested to do so, or refuse to permit any law enforcement officer or other person, to inspect any such article purchased or received. 20-5 Persons from whom articles shall not be taken It shall be unlawful for any pawnbroker or secondhand dealer to receive, purchase or trade any article from a person who is under the influence of alcohol, under the influence of drugs or under the age of 18 20-6 Duration articles must be held A pawnbroker or secondhand dealer shall hold all purchases made throw hhaa purchase transaction for a period of fourteen (14) days, during which time the property shall not be disposed of or altered from the form in which it was received. The holding period shall begin on the day the purchase transaction is uploaded into the law enforcement designated database. 20-7 Internet subscription requirements EvM pawnbroker and secondhand dealer shall own, maintain and operate a computer system with intemet access. EvM pawnbroker or secondhand dealer shall file all records electronically directly to the police department and/or to an internet subscription service designated as an agent of the police department as prescribed by the Chief of Police. The pawnbroker or secondhand dealer shall enter and upload all information from its database of records regarding_ contract for purchase pledges, and purchase transactions by no later than 5:00 PM on Friday of each week. Every operator shall file, upload or record all registers or record of transactions, to an electronic database as designated by the Chief of Police or agent of the police department If the transactions have not been entered into electronic database according to this section the Police Department shall stop any further transactions by the operator, until the operator is in compliance. The Chief of Police may for good cause shown grant an operator a written extension to the deadline. 20-8 Requirement for records A. All records required to be kept under this article must be kept in the English language in a legible manner and shall be preserved and made accessible for inspection for a period of three years after the date of redemption or forfeiture and sale of the property_ B. Upon demand of any law enforcement officer or agent the pawnbroker or secondhand dealer shall produce and show any tan impersonal property given to the pawnbroker or secondhand dealer in connection with any contract for purchase or purchase transaction. The pawnbroker's and secondhand dealer's database shall list the date of the pawning or purchasing date on which each contract for purchase was canceled, whether it was redeemed, or forfeited or sold the name of the person by whom the article was pawned or by whom purchased, and the amount loaned on or paid for the article. In the case of the sale of any article pawned or pledged,the pawnbroker or secondhand dealer shall enter upon the register, the name of the purchaser, the time of the sale and the price paid for the article. Such records shall be made available to any law enforcement officer or agent upon request. 20-9 Declaration of ownership A. The pawnbroker and secondhand dealer shall, at the time of making the loan contract for purchase or purchase transaction, obtain a written declaration of ownership from the customer stating; whether the property that is the subject of the transaction is solely owned by the customer and, if not solely owned by the customer, the customer shall attach a power of attorney from all co -owners of the property authorizing the customer to sell or otherwise dispose of the property. B. The pawnbroker or secondhand dealer shall require the customer to sign in their presence the customer's name on the declaration of ownership. ANNOTATED PROPOSED ORDINANCE NO. 1746 TO REFLECT PUBLIC COMMENT, CONCERN AND RATIONALE FOR PROPOSED LANGUAGE UNDER SCRUTINY. ORDINANCE NO.1746 AN ORDINANCE AMENDING CHAPTER 20 OF THE KALISPELL MUNICIPAL CODES RELATING TO PAWNBROKERS, JUNK AND SECONDHAND DEALERS, RESCINDING KMC 20-1 THROUGH 2O-10 AND REPLACING THE RESCINDED PARTS AS SET FORTH, DECLARING AN EFFECTIVE DATE AND AUTHORIZING THE CITY ATTORNEY TO CODIFY THE SAME. WHEREAS, pursuant to Kalispell Municipal Code Chapter 20, the City of Kalispell regulates the business of Pawnbrokers, Junk and Secondhand Dealers, primarily for the purposes of preventing such businesses from being utilized by third parties to sell stolen goods, to assist in the recovery stolen goods conveyed thereto and to obtain evidence in the investigation of thefts; and WHEREAS, the current code is found to be inadequate to serve the above stated purposes; and WHEREAS, the Kalispell City Council therefore finds that it is in the west interest of the safety and welfare of the City and its residents that Chapter 20 of the Kalispell Municipal Code be amended to update the regulation of Pawnbrokers and Secondhand Dealers. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION 1. The City of Kalispell Municipal Code is hereby amended as set forth in Exhibit "A", attached hereto and incorporated fully herein by this reference. SECTION 2. The City Attorney is hereby authorized and directed to recodify this Ordinance. SECTION 3. This Ordinance shall take effect thirty (30) days after its final passage. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL THIS DAY OF OCTOBER, 2014. Mark Johnson Mayor ATTEST: Theresa White City Clerk ANNOTATED PROPOSED ORDINANCE NO. 1746 TO REFLECT PUBLIC COMMENT, CONCERN AND RATIONALE FOR PROPOSED LANGUAGE UNDER SCRUTINY. EXHIBIT "A" Chapter 20 PAWNBROKERS, jPN AND SECONDHAND DEALERS ANNOTATED PROPOSED ORDINANCE NO. 1746 TO REFLECT PUBLIC COMMENT CONCERN AND RATIONALE FOR PROPOSED LANGUAGE UNDER SCRUTINY. W46 6_62.8 @_; other- th4ngs pawned, pledged of purchased, the amakint ef mainey iaaiied eF pai shall at all times, be epen w the inspeetien of the Mayor- er an), Faember- ef the peliee fer-ee. ;—Ind- d-Ali-ev to t 0 chief ef Poliee, every day befOFO thO hE)UF Of 1100 Fison, a legible and eafFeet valuable things Feeeived, deposited 6F PtIF&MOd EWriRg 640 PROOdiRg JR)', Wgtathff Moit_h dq@ time baftkfapt steek of: h4�m any other persen doing business and having an established place 0 An e-hapten IB Notification :_K�_ -A- Sell - Whenever. the Chie f Wf -Polie-e- Ew any member- of the peliee fef" sold ar- be pomWed to be redeemed until sue-h tifne as may be determined by such Chief held. 20 8 junk Dealers Generally Having No Esiablished Place of Business, Reeards to be Kepi by Gky 4:FeasweF The C ity Treasurer s h al 1 keep -a rer--owd- -of 1-he number-, name and p! ae e of Fes i den ee ef a! 1 P 8FS SH place of business in the Gity. hispeetisa. ANNOTATED PROPOSED ORDINANCE NO. 1746 TO REFLECT PUBLIC COMMENT, CONCERN AND RATIONALE FOR PROPOSED LANGUAGE UNDER SCRUTINY. 20-1 Definitions A. 'Pawnbroker" means any person or entity who, within the City, loans money on deposit or pledge Of personal property or any valuable thing, or who deals in the purchasingpersonal property or valuable things on condition of selling the same back at a stipulated price, whether he does the same for himself or as an agent of some person or firm_ or corporation, who by any means, method or device loans money for personal E?pperty when the same is de osited for security or is deposited for any other purpose. B. "Secondhand Dealer" means anyperson or entity, who, within the City, as a business, enrages in the purchase, sale, trade, barter, recycling or exchange of secondhand goods, wares or merchandise, My person who keeps any store, shop, room or place where secondhand goods, wares or merchandise of any kind or description, are bought, sold traded, bartered, recycled or exchanged is defined as a secondhand dealer within the meaning of this ch2pter provided however, that this chapter shall not Mply to bona fide trade or turn -ins of secondhand goods, wares or merchandise or other gggds where no cash is transferred or paid by the merchanr to auction hous C. "Customer" means any person or entity who, within the City, deposits, pledges, sells, trades, barters or exchanges personal property, secondhand good, wares, merchandise or other valuable things to an operator as set forth in this chapter. 20-2 Exceptions and Exclusions A. Pawnbrokers and secondhand dealers are excluded from u I ading hem4 in€emvWerrinto the , selected database per 20-3 of this ordinance if the 4e dew meets one or - mare of the followins r ------------------- - criteria: 1. The item purchased by the dealer is under $50.00 in value except if the items are_ _ _ _ _ _ purchased in a quantity of 25 items or more, such as 25 or more DVDs, CD's etc. Jewelry (�ss segqlashall he Ehotoeraphed and the phot,?4[ nOs maintained by the purchaser for a period of one year and/or the photo uploaded to the database. 2. The item is used adult or used children's apparel kvith a value of less than $50.0d 3. The seller is a known customer of the dealer and had contracted with the business prior to Camment[RN2]:Added to original proposed draft to clarity that auction houses were not intended to be included in the definition as these are treated elsewhere in state law. Title 3o Chapter 11 MCA. Comment [RN2]:suggested amendment to original language Comment [RN3]: Suggested amendment to original language Comment [RN4]: The question has been raised by the public whether or not this is an appropriate minimum value? Comment[RN5]:This language may he deleted to address public concerns that all used jewelry could be considered "scrap" therefore not reported. Comment [RN61: Thia language may he added by amendment to address public concerns that were raised about expensive clothing not being reported. ie Harley Davidson jackets, fur coats, etc. ANNOTATED PROPOSED ORDINANCE NO. 1746 TO REFLECT PUBLIC COMMENT, CONCERN AND RATIONALE FOR PROPOSED LANGUAGE UNDER SCRUTINY. the property being presented for sale such as estate sale purchase. The exception does not include over-the-counter contracted purchases. 4, The property was obtained through a bidding process through a reputable, licensed auction house. 5. The property is brokered with the business. 6. The acquisition for resale of any goods by a nonprofit corporation or nonprofit association recognized as such by the Internal Revenue Service or by a bona fide fraternal or bona fide reli iogt us organization or association. 7. The acquisition for resale or trade of coins or -of mpnetixe�ullion or commercial grade ingots of gold, silver or other precious metals including. but not limited to. gpld, silver,platinum, which ingot bears a stamp or other marking indicating or reflecting the government governmental agency, rivate corporation, or banking institution issuing or producing the ingot. "Commercial grade ineats" is defin- d herein as 0.99 fine ingots of gold, silver or platinum, or 0.925 fine_ sterling silo -ex -art bars and medallions. provided that the ingots, art bar and medallions are marked by the refiner or fabric tars as to their assay fineness. 20-3 Register A. Ant+ operator who en2aRes in the activities set forth in Section 1 shall keen a legible rettister or record of all property purchased or taken under that section, along wiOJ_ -1 comment [Rn7]: added 1. A description of each article, including, but not limited to, identification number, serial number, model number, brand name or other identification marks on such article; and a descri tion by weight and design of precious and semi-precious metals or stones. 2. The customer's name and date of bitth and documentation from one or more of the following: A valid state identification caul A valid state driver's license; A military identification card, A valid passport; An alien re istration card' An official identification document lawfully issued by a state or federal Rovernawnt 3. The current street address, city, state and zip code of the customer's residence. ANNOTATED PROPOSED ORDINANCE NO. 1746 TO REFLECT PUBLIC COMMENT CONCERN AND RATIONALE FOR PROPOSED LANGUAGE UNDER SCRUTINY. B. All transactions shall be kevt in a numerical register in the order in which thev occur, which reeister shall clearly document the Comment[RN8]: Public concerns have pawnbroker. secondhand dealer or went conducting the transactio ,-the pumhase price ib Bother been raised about the electronic diyaIdLuxt!- Ile% ldalyudyl' is dal monetary amount of the transaction the date time and place of the transaction and an accurate and attempt to simplify with added detailed account and description of each item of tangible personal property involved, includin-9,-but language. not limited to, any and all trademarks, identification numbers, serial numbers, model numbers, owner -applied numbers, brand names or other identifying marks on such property. 20-4 Examination No person keeping records as required in Section 2 shall fail, neglect, or refuse to exhibit the same to anv law enforcement officer or other person, when requested to do so, or refuse to permit any law enforcement officer �r other pgmo to inspect any such article purchased or _ Comment iRNgl: state Law MCA al l- 402 requirement that city cannot received. exclude (public concern asking that this be deleted) 20-5 Persons from whom articles shall not be taken It shall be unlawful for any pawnbroker or secondhand dealer to receivepurchase or trade an article from a person who s under the influence of alcohol, under the influence of drug, or comment [Rn101, Public comment Under the ate of 18 ears. questioning the need for this }� language. Purpose is to enaure that sober judgment is being used in the transaction. 20-6 Duration articles must be held A pawnbroker or secondhand dealer shall hold all purchases made through a purchase transaction for a period of Ifourteed 04l days, during which time the property shall not be _ - - CammentiRN111* concerns were raised about this holding period, disposed of or altered from the form in which it was received. The holdingperiod shall beQln on The intent is to have an adequate the day the purchase transaction is uploaded into the law enforcement designated database. itemeaeeriod rF rerthediscoveryare f stolen an innocent third party. 20-7 Internet subscription requirements Every pawnbroker and secondhand dealer shall own, maintain and operate a computer system with internet access. Every pawn broker or secondhand dealer shall file all records electronically directly to the Police department and/or to an inte met subscription service designated as an agent of the police department as prescribed by the Chief of Police. The pawnbroker or secondhand dealer shall enter and unload all information from its database of records regarding contract for purchase, pledges, and purchase transactions by no later than 5:00 PM on Friday of each week. Every operator shall file, upload or record all registers or record of transactions, to an electronic database as designated by the Chief of Police or agent of the police department. If the transactions have not been entered into electronic database according to this section, the Police Department shall stop any further transactions by the operator, until the operator is in compliance. The Chief of Police may for good cause shown grant an operator a written extension to the deadline. ANNOTATED PROPOSED ORDINANCE NO. 1746 TO REFLECT PUBLIC COMMENT CONCERN AND RATIONALE FOR PROPOSED LANGUAGE UNDER SCRUTINY. 20-8 Requirement for records A. All records required to be kept tender this article must be kept in the English language, in a legible manner and shall be preserved and made accessible for inspection for a period of three years after the date of redemption or forfeiture and sale of the property. B. Upon demand of any law enforcement officer or agent, the pawnbroker or secondhand dealer shall produce and show any tangible personal property given to the pawnbroker or secondhand dealer in connection with any contract for purchase or purchase transaction. The pawnbroker's and secondhand dealer's database shall list the date of the pawning or purchasing, date_ on which each contract for purchase was canceled, whether it was redeemed, or forfeited or sold, the name of the person by whom the article was pawned or by whom purchased, and the amount loaned on officer or a c nt upon request, 20-9 Declaration of ownership A. The pawnbroker and secondhand dealer shall, at the time of making the loan contract for purchase or purchase transaction), obtain a written declaration of ownership from the customer Stating whether the properly that is the subject of the transaction is solely owned by the customer and. if not solely owned by the customer, the customer shall attach a power of attornc From al] co -owners of the Vroperty authorizing the customer to sell or otherwise dispose of the ro ert . B. The pawnbroker or secondhand dealer shall require the customer to sign, in their presence, the customer's name on the declaration of ownershi Comment [RN12l:State Law Men 31-1- 402 requirement that city cannot exclude (public concern asking that this be deleted) Comment [RN13]: Public concerns voiced about this language. The purpose is to try to avoid domestic overreaching on marital property or other joint property situations. Comment[RN14]: PUbllc concerns voiced about this language. The purpose is to try to avoid domestic overreaching an marital property or other joint property situations.