E2. Ordinance 1751 - Pawn shop memoy� Ity of Kall"S
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 75 8-7741 Fax: (406) 75 8 -775 8
MO ETANA
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To: Mayor Johnson and City Council
From: Doug Russell, City Manager
Re: ordinance No. 1751, Pawn Sh p & Secondhand Store Codes
Meeting Date: January 20, 2015
BACKGROUND: Attached is a previous memo recommending that council adopt an
ordinance that updates the reporting requirements for pawn shops and second hand stores to an
electronic reporting process. Additionally, an updated ordinance, No. 1751 is attached that
reflects discussion at a recent work session.
Approval of the prior agenda item (ordinance No. 1749) was not recommended so council can
consider adopting this ordinance, No. 1751. This version is updated to clarify and consolidate
the enforcement activity in accordance with municipal code infractions.
FISCAL IMPACT: The City of Kalispell currently subscribes to "LeadsOnLine" and would
not be facing additional fees.
RECOMMENDATION: It is recommended that the City Council adopt ordinance No. 1751,
an ordinance amending Chapter 20 of the Kalispell Municipal Codes relating to pawnbrokers,
junk and secondhand dealers.
ATTACHMENTS: December 15, 2014 memorandum regarding ordinance 1749
Ordinance 1751, Pawn Shop & Secondhand Store Codes
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REPORT: Doug Russell, City Manage
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FROM: Roger Nasset, Chief of Police
SUBJECT: Proposed Pawn Shop & Secondhand Store ordinance
MEETING DATE: December 15, 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outdated.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 "Leads onLine" 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.
A meeting was held on October 20 to discuss the proposed pawn ordinance. This
meeting 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
On November 24, we held a Council workshop to review the ordinance. At this meeting
we addressed questions related to liability concerns, exemptions to property which is
otherwise titled and recorded, and how other operations would be impacted by this
ordinance. Modifications to the proposed ordinance that emerged from the work session
include adjusting the number of days required to hold inventory, referencing state law
where applicable, and cleaning up language items based on these changes and
modifications from previous discussions.
We have included a clean version of the ordinance and an annotated version referencing
changes.
FISCAL IMPACTS: The City of Kalispell currently subscribes to "LeadsonLine" and
would not be facing additional fees.
ALTERNATIVES: Council can elect not to adopt the recommended ordinance or
modify as desired.
RECOMMENDATION: It is recommended that Council adopt ordinance 1749, an
ordinance amending Chapter 20 of the Kalispell Municipal Codes relating to
pawnbrokers, junk and secondhand dealers.
KALISPELL, POLICE DEPARTMENT PAGE 2
ORDINANCE NO. 1751
AN ORDINANCE AMENDING CHAPTER 20 OF THE KALISPELL MUNICIPAL CODES
RELATING TO PAWNBROKERS, JUNK AND SECONDHAND DEALERS, RESCINDING
KMC 20-1 THROUGH 20-10 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 of 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 (3 D) days after its final passage.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF T H E
CITY OF KALISPELL THIS DAY OF FEBRUARY, 2015.
Mark Johnson
Mayor
ATTEST:
Aimee Brunckhorst, CMC
City Clerk
Page I of 7
Ordinance 1751, Pawnbrokers, Junk and Secondhand Dealers
EXHIBIT "A"
Chapter 20 PAWNBROKERS, r AND SECONDHAND DEALERS
►I i 1 Definition
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file with the Gitu Clpar-]E a bond in the sttffl of one hundfed dollms 100.00N with at least tw
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the amount of loaned
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Page 2 of 7
Ordinance 1751, Pawnbrokers, Junk and Secondhand Dealers
Page 3 of 7
Ordinance 1751, Pawnbrokers, Junk and Secondhand Dealers
?0-1 Definition.&
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 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 money for personal property when the same is deposited for security or is deposited for
any other purpose.
B. "Secondhand Dealer" means any person or entity, who, within the City, as a business, engages
the purchase, sale, trade barter, recycling 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, br to auction housesor to the transaction of any
property that is titled and of record with a state or the federal government.
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 �t� into the selected
database per 20-3 of this ordinance if the jte6 meets one or more of the following criteria:
1. The item purchased by the dealer is under $50.00 in value hcept if the items are
purchased in a quantity of 25 items or more, such as 25 or more DVDs, CD's etc.
2. 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.
3. The property was obtained through a bidding process through a reputable, licensed
nllf'.tion h[lupp,.
4. The property is brokered with the business.
Page 4 of 7
Comment [RN1]: Added to original
proposed draft to clarify that
auction houses were not intended to
be included in the definition as
these are treated elsewhere in
state law. Title 30 Chapter 11 MCA.
Comment [CH2]: Language added to
resolve the unnecessary extra level
of scrutiny on titled property
which is already well documented by
various laws.
Comment [RN3]: Suggested amendment
to original -Language
Comment [RN4]: Suggested amendment
to original language
Comment [RN5]: The question has
been raised by the public whether
or not this is an appropriate
minimum value?
Ordinance 1751, Pawnbrokers, Junk and Secondhand Dealers
5. 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 religious organization or association.
6. 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 Re ig ster
A. Any operator who engages in the activities set forth in Section 20-1 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.
Jewelry shall be photographed and the photographs maintained by the purchaser for a
period of one vear and/or the photo unloaded to the database.
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.
Page 5 of 7
Comment [CH6]: Moved from 20-2 (A)
for clarity
Ordinance 1751, Pawnbrokers, Junk and Secondhand Dealers
B . All transactions shall be kept in a numerical register in the order in which they occur, which
register shall Clearly document the pawnbroker, secondhand dealer or agent conducting the
transactio , 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 tan ig b1e
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
All persons keeping records as required in Section 20-3 shall comply with state law in regard to
the examination of records. 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
20-5 Persons from whom articles shall not be taken
It shall be unlawful for an- pawnbroker or secondhand dealer to receive, purchase or trade anX
article from a person who lis under the influence of alcohol, under the influence of drugs', or
under the age of 18 years.
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 seven 0) 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 dU
the Durchase transaction is unloaded into the law enforcement desi anated database.
20-7 Internet subscri tion keguirement
Every pawnbroker and secondhand dealer shall own, maintain and operate a computer system with
internet access. Every pawnbroker or secondhand dealer shall electronically file all records
identified in Section 20-3 directly 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 such information from its records by no later than 5:00 PM on Friday of each
Week
Page 6 of 7
Comment [RN7]: Public concerns have
been raised about the electronic
signature- new language is an
attempt to simplify with added
language.
Comment [CH8]: Language changed to
maintain consistency with state law
that may be changed in the future
Comment [CH9]: This portion
originally located in 20-8 and
moved for clarity
Comment [RN10]: Public comment
questioning the need for this
language. Purpose is to ensure that
sober judgment is being used in the
transaction.
Comment [CH11]: The holding period
has been adjusted down from 14 days
to address concerns expressed by
the industry.
Comment [CH 12]: some language
changes made to the text to clarify
its meaning
Ordinance 1751, Pawnbrokers, Junk and Secondhand Dealers
20-5 Declaration of ownershi
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
k . The pawnbroker or secondhand dealer shall require the customer to sign, in their presence
the customer's name on the declaration of ownership.
20-9 Punishment for Violations of Municipal Requirements
allure to comply with the terms herein shall be deemed a misdemeanor offense and punishable
in accordance with Kalispell Municipal Code 1-9.,
Page 7 of 7
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]: Public concerns
voiced about this language. The
purpose is to try to avoid domestic
overreaching on marital property or
other joint property situations.
Comment [CH15]: violation as City
Misdemeanor.