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1. Pawn Ordinance Discussion33-2 1� Avo- Ea4t- - PD 130-w -497 KXU4p4U, MT 5,Q9C>3 Tag4, K--, (4.0&) 758 -7780 - Fa*, (406) 758 -779G r a.K �4►►• ki REPORT: FROM: SUIR1EM MEETING DATE: e--w6aAl - ky�OL@kaliy 4(dCawa. Doug Russell, City Managerl— Roger Nasset, Chief of Police V :Striving to K'vceed Expectations' Proposed Pawn Shop & Secondhand Store Ordinance November 24, 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for law enforcement and the businesses as the paper intensive recording and tracking system is burdensome and outdated. 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 internet access. The police department pays a fee once a year to be able to access the "LeadsOnLine" data base. There is no extra fee for each search that is performed. That fee is the same no matter if we do one search or a thousand searches. Following the October 6 council meeting 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. ROGER NASSET, CHIEF OF POLICE Since the workshop on October 23, we have continued to work on addressing the issues raised by the pawn shop owners specifically about other retailers that purchase merchandise. We have spoken with Sportsman's and Cabela's about the purchasing of firearms. They stated most of what they do is trade-ins on firearms for a new firearm however they do on occasion buy firearms outright. Both businesses said they would comply with reporting as required. Questions have arisen about the security and liability concerns related to data while using LeadsOnLine. LeadsOnLine uses a secured system to protect against unauthorized use of their information, which has limited information regarding the seller and buyers. The proposed ordinance requires the reporting businesses to upload the name, address, and date of mirth of the seller, and a description of the item. Information about the customers buying items from a reporting business is not uploaded to LeadsOnLine. We are proposing language in 20-I Section B., which excludes property from reporting that is "titled and of record with a state or the federal government". During our discussions several pawn shop owners have requested access to a list of stolen items reported to the police department, so they could minimize the potential of purchasing stolen items. We have since added a "Stolen Property" list to our web page which can be accessed by simply logging into the cities web site at www.kaIispeII.com. Go to "Police" and then "Stolen Property" to see a list of stolen items by month. This list will be updated at least weekly. At the work session on Monday, we will review the proposed amendments to the ordinance. KALISPELL POLICE DEPARTMENT PAGE 2 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 24 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 92014. Mark Johnson Mayor ATTEST: Aimee Brunckhorst City Cleric EXHIBIT "A" Chapter 20 PAWNBROKERS, JUN AND SECONDHAND DEALERS IN I MUM i ATIWITATW ._ _ as as - -Mll-MIN Mell wI shiffill tifnes, be open to the inspectien of the Mayor- or any fneffiber- of the poliee fo�e. ■ a■ Offiff - - MCF-Ir.JIM - Oil - •- - - - a ■ OPIA11I■- - - - - ' ' - ' - Y\M MMINq'_T�.ST�'qE@!!!fPam.FE'f 20-1 Definitions A. "Pawnbroker" means an erson or entity who within the City, loans money on deposit or Dledize of personal prongrty or any valuable tWng, or who deals in the purchasing of personal propegy or valuable thinjzs on condition of selling the same back at a stipulated rice 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 mone for personal ro ert when the same is deposited for-securityfor-secufity or is de osited for any other purpose. B. "Secondhand Dealer" means an rson or entity, who within the City, as a business en a o in the purchase, sale trade barter, recycling or exchange of secondhand goods wares or merchandise; or any person who keeps py 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 cha ter rovided however, that this cha ter shall not applygpply to bona fide trade or turn -ins of secondhand goods, wares or merchandise or other goods where no cash is transferred or aid by the merchant or to auction houses or to the transaction of an property that is titled and of record with a state or the federal government. C. "Customer" means M person or entity who, within the City, deposits, pledges, sells, trades, barters or exchanges personal prol2M, 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_photog_raphed 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 rotes througb a re utable licensed S. 6. auction house. The property is brokered with the business. 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 7. or bona fide religious organization or association. The acquisition for resale or trade of coins or of monetized bullion, or commercial r dous metals inCluding. bUl not IjMitcd to, gold, silver, platinum, which ingot bears a stamp or other marking indicating or reflecting the govei-.nment, governmental agency, private corporatien_orbanking institution issuing or producing the ingot. "Commercial grade ingots" is defined herein as 0.99 Fine ingots of gold, silver or platinum, or a.925 fine sterling silver art bars and medallions, provided that the ingot. art bars and medallions are marked by the reburQr fabricators as to their assay fineness. 20-3 Register A. Anv overator who engages in the activities set forth in Section l shall keen a leizible reeister or record of all proper y purchased or taken under that section, along with 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 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 goverment 3. , The current street address, city, state and zip code of the customers residence. B. All transactions shall be kept in a numerical register in the antler in which they occur, which register shall show the printed name and written or electronic signature of the pawnbroker, secondhand dealer or agent, the purchaseprice or other monetaryamount 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. 204 Examination No person keeping records as required_ in Section 3 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 urchase or trade an article from a person who is under the influence of alcohol, under the influence of drugs, or under the a eg_ of _18_years. 20-6 Duration articles must be held A Rawnbroker or secondhand dealer shall hold all purchases made through a purchase transaction for a period of fourteen_(l4ys during which time the property shall not be disposed of or altered from The fQrn-in which .x .w �received.,The holding_taejiQ,d, shall begin on the day the purchase transaction is uploaded into the law enforcement designated database. 20-7 Internet subscription requirements Every_ pawnbroker and secondhand dealer shall own, maintain and operate a computer system with intemet access. Eve pawnbroker or secondhand dealer shall file all records electronicallydirect/ to the police department and/or to an intemet subscription service designated as an agent of the police devartment 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 file.1 Tg&ord of ansactions 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 a erator until the operator is in com liance. The Chief of Police may for good cause shown gLant 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 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 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.