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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/15/2000 - ITEMS RELATING TO THE LICENSING AND REGULATION OF AGENDA ITEM SUMMARY ITEM NUMBER: 40 A-13 DATE: August 15, 2000 FORT COLLINS CITY COUNCIL STAFF: Deryle O'Dell SUBJECT: Items Relating to the Licensing and Regulation of Pawnbrokers and Secondhand Dealers. i RECOMMENDATION: j Staff recommends adoption of the Ordinances on Second Reading. EXECUTIVE SUMMARY: A. Second Reading of Ordinance No. 91,2000,Amending Chapter 15,Article VIII of the City Code Relating to Pawnbrokers. B. Second Reading of Ordinance No. 92, 2000, Amending Chapter 15,Article XI, of the City i i Code Relating to Secondhand Dealers The first major codification of the current ordinances regulating the pawn and secondhand dealer industries was completed in 1972, with some minor changes made in 1986. A City staff team (Police,Finance and City Attorney)began working on changes to the ordinances in June of 1997 in order to address some issues that have arisen in the past 13 years regarding implementation and enforcement of the ordinances. The costs associated with monitoring, enforcing and regulating the industry, as required by the ordinances and state law,have increased dramatically over the last 13 years. The different types of secondhand property involved in transactions have also changed dramatically. Ordinance No.91,2000,was adopted by a 5-1 vote,and Ordinance No. 92, 2000,was unanimously adopted on First Reading on July 18,2000,making various amendments to the City Code to increase consistency in reporting and monitoring procedures and provide those regulated with a clear understanding what is required of them. For clarification purposes, a few changes have been made to the attached ordinances for second reading. The changes are: Ordinance No. 91 - Pawnbroker Ordinance: Section 15-265(a) Applies the same identification requirements for pawnbroker licensees as for managers; DATE: August 15, 2000 2 ITEM NUMBER: 40 A-B Ordinance No. 92 - Second Hand Dealer Ordinance: Section 15-318 Applies the same identification, application and renewal requirements for second hand dealer license applications as for pawnbrokers; and Section 15-324 Applies the same standards for hold orders as for pawnbrokers. . ORDINANCE NO. 91, 2000 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 15, ARTICLE VIR OF THE CODE OF THE CITY OF FORT COLLINS RELATING TO PAWNBROKERS WHEREAS,Chapter 15,Article VIII of the City Code contains various provisions regulating the operation of pawnbrokers in the City in the interest of the public health,safety and welfare; and WHEREAS, pawnbroker establishments in the City report a large number of purchase transactions and contracts for purchase to the Fort Collins Police Services on a weekly basis; and WHEREAS, a uniform and clear record keeping process needs to be established for consistent use by all such businesses to promote compliance with both state and local regulations; and WHEREAS, there is also a need to clarify when,how and under what circumstances a police officer may hold property of pawnbrokers believed to have been stolen; and WHEREAS, Fort Collins Police Services is incurring substantial costs specifically related to monitoring the operation of, processing data from, and entering data into the NCIC and CCIC systems from pawnbroker establishments in the City; and NOW,THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS,that Article VIII of Chapter 15 of the Code of the City of Fort Collins is hereby amended to read as follows: ARTICLE VIII. PAWNBROKERS Sec. 15-261. Definitions. The following words,terms and phrases,when used in this Article,shall have the meanings ascribed to them in this Section: Contract for purchase shall mean a contract entered into between a pawnbroker and a customer pursuant to which money is advanced to the customer by the pawnbroker on the delivery of tangible personal property by the customer,for a fixed price within a fixed period of time,with the understanding that the customer has the option to cancel the contract. • Customer shall mean a person who delivers personal property into the possession of a pawnbroker for the purpose of entering into a contract for purchase or a purchase transaction. Fixed price shall mean the amount agreed upon to cancel a contract for purchase during the option period. Fixed period of time shall mean that period of time not to exceed ninety(90)days set forth in a contract for purchase within which the customer has the option to cancel the contract. Manager shall mean a person employed by a pawnbroker who is designated as manager or whose duties entail the exercise of discretion and independent judgment in the administration of the affairs of a pawnbroker's business and the supervision of other employees, as well as the making of loans, the execution of any documents required to be prepared pursuant to this Article, and\or the purchasing of goods or property on behalf of the business. Pawnbroker shall mean a person regularly engaged in the business of making contracts for purchase and purchase transactions in the course of said business. Pawnbroker shall include,without limitation,all owners,managers or employees of a pawnbroker business required to be licensed by the city whose regular duties include making contracts for purchase, purchase transactions or executing any documents required to be prepared pursuant to this Article. Peace officer shall mean any undersheriff, or deputy sheriff (other than one appointed with authority only to receive and serve summons and civil process), police officer,state patrol officer,town marshal,or investigator for a district attorney or the Attorney General, who is engaged in full-time employment by the state or a city, county, town or judicial district within this state. Purchase transaction shall mean the purchase by a pawnbroker,in the course of his or her business, of tangible personal property for resale, other than newly manufactured tangible personal property which has not previously been sold at retail, when such purchase does not constitute a contract for purchase. Tangible personal property shall mean all personal property other than choses in action, securities or printed evidence of indebtedness, which property is deposited with or otherwise actually delivered into the possession of a pawnbroker, in the course of business, in connection with a contract for purchase or purchase transaction. 2 Sec. 15-262. License required. It shall be unlawful for any person to engage in the business of pawnbroking except as provided in and authorized by this Article and without first having obtained a license from the Financial Officer. Such license shall be kept current at all times, and the failure to maintain a current license shall constitute a violation of this Section. Sec. 15-263. Annual license fee. The annual license fee for carrying on the business of pawnbroking shall be three hundred dollars($300),which shall be submitted together with an application for such license to the Financial Officer. Said license fee is non-refundable, unless the application is denied. Sec. 15-264. Surety bond required. The licensee or applicant shall furnish the city's Financial Officer with a good and sufficient bond,with a surety to be approved by the Financial Officer,in the sum of two thousand five hundred dollars ($2,500.), which bond shall be conditioned upon the pawnbroker's compliance with all provisions of this Article, including, without limitation, the payment of all surcharges and fees. Sec. 15-265. Investigation and approval of licensees and managers required. (a) No license shall be issued by the Financial Officer until the application for a license has been investigated by the Chief of Police. Each applicant shall pay a non-refundable investigation and/or fingerprint and photograph fee at the time the 4application is filed in an amount not to exceed that WedbColorado Bureau ation. (b) No licensee shall employ a personas a manager,nor shall any person accept such employment, unless such person has been investigated and been granted a manager's certificate by the Chief of Police pursuant to - M5(b) and he following: (1) Prior to becoming employed by a licensee, an applicant for a manager's certificate, or for the renewal of such certificate, shall be fingerprinted and photographed by the Office of Police Services. Each applicant for a certificate, or renewal of a certificate, shall furnish a birth certificate, alien registration card,or other reasonable 3 identification card to prove the applicant's name, date of birth and residency,and MaIlprovide any other information which is requested on the application. (2) An applicant for a manager's certificate shall pay a non-refundable fingerprint and investigation fee in an amount not to exceed that charged b. the Colorado Bureau of Investigation. If, however, a managcrffyfew-, can provide proof of a criminal history investigation completed by the Colorado Bureau of Investigation within the year immediately preceding the application, such person need only submit a fingerprint card and photograph and pay the associated fee. (3) Each manager's certificate shall have clearly imprinted thereon a statement that it is valid only for the period of time specified thereon, and only in the pawn industry. A provisional certificate shall be issued by the Chief of Police upon filing of the application, which provisional certificate shall remain in effect during the pendency of an applicant's background investigation.Each provisional or regular manager's certificate shall be stamped with the name of the pawnbroker and business location(s) for which it is valid. A regular certificate issued shall be for a maximum period of three (3) years; and such certificate shall automatically expire: (i) upon a change of employment by the certificate holder,unless renewed within ten(10) days thereafter, or (ii) if the holder is not employed in the pawn industry within the city for a period of ninety (90) days or more. A manager's certificate which has expired may be renewed by the application process described above. (4) A manager's certificate may,in the discretion of the Chief of Police, be revoked when the holder has been determined by the Chief to be in violation of any of the provisions of this Article. (5) Any applicant who has made a false statement upon the application for a pawnbroker license and\or application for a manager's certificate, in addition to being subject to revocation of said license and\or certificate,commits a misdemeanor punishable under§ 1-15. (c) No pawnbroker license or manager's certificate shall bekWIRM issued to the following persons under the provisions of this Article: (1) Subject to the provisions contained in Section 24-5-101, C.R.S., a person who has been convicted of: any felony or any crime which under the laws of this state would be a felony; any crime of which 4 fraud or intent to defraud was an element, whether in this state or elsewhere;any crime of embezzlement or larceny against an employer or business; or any criminal conviction or civil violation related to any law or ordinance pertaining to the pawn industry; (2) Any person under the age of eighteen (18); (3) Any person who has made a false,misleading,or fraudulent statement on his or her application for license or a manager's certificate. (d) No employee under eighteen (18)years of age shall make loans,purchase any goods or property on behalf of the business, or execute any document required to be prepared pursuant to this Article, unless such employee is under the direct supervision of a manager who is physically present on the licensed premises. (e) Within forty-five (45) days of receipt of an application for a new license or to renew a license, the Financial Officer shall issue or renew such license, provided that the Chief of Police after investigation has determined that the applicant will or has operated the business in such a manner as to fully comply with the requirements and purposes of this Article. A decision regarding said determination shall also be made by the Chief of Police within forty-five(45) days of receipt of an application for license or renewal. . (f) Licenses shall be limited to use at the premises specified in the application. Such license shall not be transferable. (g) The revocation,suspension or denial of the issuance or renewal of a license or manager's certificate may be appealed to the City Manager,whose decision,after notice and hearing, shall be final. Further appeal may be had pursuant to Colorado Rules of Civil Procedure. Sec. 15-266. Required books and records. (a) Every pawnbroker shall keep books and records sufficient to identify each pledge,contract for purchase or purchase transaction,and each forfeiture of property pursuant to the terms of a contract for purchase. Every customer shall provide to the pawnbroker the following information for such books and/or records: (1) The customer's name and date of birth; . 5 (2) The current street address,city, state and zip code of the customer's residence; (3) The customer's �e s Rr h: w �� u3 -60athe # it n rg k to O6 and (4) A clear imprint of the person's right index finger. In the event that the right index finger is missing, the customer's left index finger shall be imprinted or,if the left index finger is missing,then any other of the customer's fingers or thumbs may be imprinted. If all fingers and thumbs are missing,this fingerprint requirement shall not apply. (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 signature of the pawnbroker 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. The books and records of the licensee shall also reveal the date on which each extension of credit under a contract for purchase was terminated and whether and by whom the pawned personal property of the customer was redeemed,renewed, or forfeited upon the expiration of the contract for purchase. (c) If the pawned personal property is redeemed by a person other than the original customer, the person redeeming the property shall provide to the pawnbroker, and the pawnbroker shall record, the following information: 6 . (1) The person's name and date of birth; (2) The current street address,city,state and zip code of the person's residence; (3) The person's driver's license number or other identification number from r„ any other form of identification which is allowed under §i6 3z9-(5)I W ; and (4) A clear imprint of the person's right index finger. In the event that the right index finger is missing, the customer's left index finger shall be imprinted or, if the left index finger is missing, then any other of the customer's fingers or thumbs may be imprinted. If all fingers and thumbs are missing, this fingerprint requirement shall not apply. Sec. 15-267. Declaration of ownership. (a) The pawnbroker shall at the time of making the loan contract for purchase or purchase transaction obtain a written declaration of ownership from the customer stating: (1) 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; (2) How long the customer has owned the property; (3) Whether the customer or someone else found the property; and (4) If the property was found, the details of the finding. (b) The pawnbroker shall require the customer to sign his or her name , in the presence of the pawnbroker,on the declaration of ownership and in the register to be kept under this Article. Each such declaration shall also be signed by the pawnbroker at the time of the transaction. The customer shall be given a copy of the contract for purchase or a receipt for the purchase transaction. Sec. 15-268. Requirements 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(3)years after the date of redemption or forfeiture and sale of the property. Information from records and fingerprints inspected by the 7 Office of Police Services pursuant to this Article shall be used for regulatory and law enforcement purposes only. (b) A copy of any record required to be kept under this Article, together with a copy of the record of each contract for purchase or purchase transaction, shall be made available to the Office of Police Services each day so that said Office may maintain a complete record of all business transactions of the pawnbroker. It shall be the responsibility of the Office of Police Services to pick up the copies from the pawnbroker. Sec. 15-269. Maximum fixed period of time; maximum interest rates; commissions prohibited. (a) No contract for purchase shall be for a fixed period of time of more than ninety (90) days. (b) No pawnbroker shall ask,demand or receive any fixed price that exceeds the following limits: (1) On contracts for purchase in the original amount of less than fifty dollars ($50.), the maximum fixed price shall be no more than one fifth (1/5) of the original purchase price for each month the contract for purchase is in effect, plus the amount of the original purchase price; and (2) On contracts for purchase in the original amount of fifty dollars($50) or more, the maximum fixed price shall be no more than one tenth (1/10) of the original purchase price for each month the contract for purchase is in effect,plus the amount of the original purchase price. Sec. 15-270. Intermediate payments upon loans. Pawnbrokers shall accept any intermediate payment offered by a customer upon a loan made under a contract for purchase which has not matured , so long as such payment is equal to or greater than ten (10)percent of the fixed price as defined in §15-261, together with accrued charges. The acceptance of payments in lesser amounts shall be discretionary with the pawnbroker. A receipt showing the date of the payment and the amount shall be given to the customer for all monies received on account of or in payment of loans made under a contract for purchase. 8 • Sec. 15-271. Holding period and sale of tangible personal property. (a) A pawnbroker shall hold all property purchased by him or her through a purchase transaction for thirty(30)days following the date of purchase during which time such property shall be held separate and apart from any other tangible personal property and shall not be changed in form or packaging or altered in any other way. (b) A pawnbroker shall hold all goods received through a contract for purchase within his or her jurisdiction for a period of ten(10)days following the maturity date of the contract for purchase,during which time such goods shall be held separate and apart from any other tangible personal property and shall not be changed in form or packaging or altered in any way. If the customer has failed or neglected to redeem such property on or before the maturity date of the contract by repayment of the balance of the principal and payment of all accrued interest charges,the pawnbroker shall, immediately upon maturity of the contract, mail with sufficient postage a notice of the impending sale of the property delivered under the contract. Such notice shall be mailed to the customer at the address shown on the contract pertaining to the transaction. Ten (10) days shall be allowed from the date of mailing of the notification for the customer to appear and reclaim the property or make satisfactory payments upon it. The pawnbroker shall not sell or otherwise dispose of the property prior to the expiration of the ten-day period. Sec. 15-272. Hold orders; surrender of property; inspection of records and premises. (a) Any peace officer may order a pawnbroker to hold any tangible personal property deposited with or in custody of any pawnbroker, if the officer has reasonable suspicion to believe that such property is connected with criminal activity, for purposes of further investigation. No sale or other disposition may be made of such property held by any pawnbroker while the hold order remains outstanding. Any such hold order shall be effective for ninety (90) days only, unless a criminal prosecution is undertaken with regard to any such property within such ninety -day period, in which event the hold order shall remain in effect until the prosecuting agency has notified the pawnbroker that the prosecution has been completed or dismissed. (b) Unless a warrant is required by law or consent is given, if any peace officer determines, after investigation, that any article of personal property held by a pawnbroker is stolen or illegally obtained property, such officer may take such property into evidence after giving the pawnbroker a receipt for it which sets forth the Police Services' case number as well as the reason for the confiscation. (c) The physical premises of any licensed pawnbroker business,including any area in which tangible personal property is located, shall be subject to inspection by . 9 the Office of Police Services during all business hours and other times of apparent activity, for the purpose of investigation and inspection of books, records and inventory. Where any part of the licensed premises consists of a locked area, such area shall be made available for inspection, without delay, upon the request of any member of the Office of Police Services. For the purposes of this provision, the term "licensed premises" shall not include any private residence adjacent to the licensed premises except such portion of said residence, if any, that is used in the operation of the business of the pawnbroker. Except for items in plain view, if any inspection is conducted hereunder,the peace officer conducting such inspection shall document the same on a form approved by the Office of Police Services and shall, within twenty-four(24)hours of conducting such inspection,provide a copy thereof to the pawnbroker. Sec. 15-273. Prohibited transactions. (a) It shall be unlawful for any pawnbroker to accept any tangible personal property under a contract for purchase or purchase transaction from the following: (1) Any person under eighteen (18) years of age; (2) Any person under the influence of alcohol or any narcotic drug or stimulant; (3) Any person known to such pawnbroker to have been convicted of larceny, theft or burglary without first notifying the Office of Police Services. (b) With respect to a contract for purchase, no pawnbroker may permit any customer to be obligated on the same day in any way under more than one (1) contract for purchase agreement with the pawnbroker which would result in the pawnbroker's obtaining a greater amount of money than would be permitted if the pawnbroker and customer had entered into only one (1) contract for purchase covering the same tangible personal property. (c) No pawnbroker shall violate the terms of a contract for purchase. Sec. 15-274. Business limited to one location. A pawnbroker shall conduct his pawnshop business from only one (1) business location, which shall be the location listed on the pawnbroker's license. This provision shall not prohibit a pawnbroker from using warehouses or other storage locations away from the licensed place of business, but such other location shall be used only if the pawnbroker first submits notice to the Financial Officer in writing 10 of such off-site locations. Such off-site locations shall be open to any peace officer for inspection as provided for in §15-272(c). Sec. 15-275. Violations and penalties. In addition to the revocation, suspension or denial of a license or manager's permit issued,any person,including but not limited to any customer or pawnbroker, who violates any of the provisions of this Article, shall be guilty of a misdemeanor punishable in accordance with §1-15. Sec. 15-276. Notice of penalties required. Every pawnbroker shall conspicuously post a notice, provided by the Office of Police Services, in a place clearly visible to all customers which sets forth the penalties of this Article and of Section 12-56-104(5), C.R.S., concerning false information to a pawnbroker and Section 18-4-410, C.R.S., concerning theft by receiving. Such notification shall include information to the effect that stolen property may be confiscated by any peace officer and returned to the rightful owner without compensation to the buyer; and may also include any information regarding any reimbursement policy of the pawnbroker regarding confiscation. Introduced, considered favorably, and ordered published this 18th day of July, A.D. 2000, and to be presented for final passage on the 15th day of August, A.D. 2000. Mayor ATTEST: City Clerk Passed and adopted on final reading this 15th day of August, A.D. 2000. Mayor ATTEST: City Clerk • 11 . ORDINANCE NO. 92, 2000 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 15, ARTICLE XI, OF THE CODE OF THE CITY OF FORT COLLINS RELATING TO SECONDHAND DEALERS WHEREAS,Chapter 15,Article XI of the City Code contains various provisions regulating the operation of secondhand dealers in the City in the interests of the public health, safety and welfare; and WHEREAS, the current definition of "personal property" contained within the City Code does not include certain items such as computers,musical instruments and videos that are commonly pawned, traded and sold, so that such definition should be amended; and WHEREAS, secondhand dealer establishments in the City report a large number of transactions to the Fort Collins Police Services on a weekly basis; and WHEREAS, a uniform and clear record keeping process needs to be established for consistent use by all such businesses to promote compliance with both state and local regulations; and . WHEREAS, there is also a need to clarify when,how and under what circumstances a police officer may hold property of secondhand dealers believed to have been stolen; and WHEREAS, Fort Collins Police Services is incurring substantial costs specifically related to monitoring the operation of secondhand establishments in the City; and WHEREAS, the Council believes it to be in the best interests of the City to increase the licensing fee to help defray these costs. NOW, THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Article XI of Chapter 15 of the Code of the City of Fort Collins is hereby amended to read as follows: ARTICLE XI. SECONDHAND DEALERS Sec. 15-316. Definitions. The following words, terms and phrases, when used in this Article, shall have the meanings ascribed to them in this Section: Conditional sale or consignment shall mean a transaction wherein: (a) . secondhand property is delivered to a dealer for sale by the property owner, and (b) the secondhand dealer is required to either sell the goods for the person making the delivery and remit the price or, if the goods are not sold, return the goods to the person making delivery. Peace officer shall mean any undersheriff or deputy sheriff (other than one appointed with authority only to receive and serve summons and civil process), police officer,state patrol officer,town marshal,or investigator for a district attorney or the Attorney General, who is engaged in full-time employment by the state or a city, county, town or judicial district within this state. Secondhand dealer shall mean any person who accepts on consignment, sells or trades any secondhand property; provided however, that this definition and the terms of this Article shall not apply to the following: (1) A person who accepts on consignment, trades or sells no more than twelve (12) items of secondhand property per year from a permanent storefront location, and none of the items consigned, traded or sold carries a manufacturer or serial number; (2) A person or organization selling or trading secondhand property at an exhibition or show which is intended to display and advertise a particular commodity or class of product, including, but not limited to, antique exhibitions,firearm exhibitions,home and garden shows and recreational vehicle shows; (3) A person or organization which is charitable, nonprofit, recreational, fraternal or political in nature or which is exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue Code of 1986; (4) A person selling or trading firewood, Christmas trees, plants, food products,agricultural products,fungible goods,pets,livestock,or arts and crafts, excluding jewelry and items crafted of gold or silver, if sold or traded by the artist or craftsman, his or her immediate family or regular employees; (5) A person accepting on consignment, selling or trading secondhand property which was not originally purchased by such person for resale, so long as such person does not accept on consignment, sell or trade secondhand property more than five (5) weekend periods in one (1) calendar year as verified by a declaration to be prepared by the seller. For purposes of this subsection, weekend period means Friday through the immediately following Monday. 2 Secondhand property shall mean the following items of tangible personal property consigned, sold or traded by a secondhand dealer: (1) Camera equipment,including,but not limited to:cameras,camera lenses, slide or movie projectors, projector screens, flashguns, light meters, enlargers, tripods, binoculars, telescopes, microscopes and video recording cameras and their components; (2) Entertainment equipment, including, but not limited to: televisions, phonographs, tape recorders, video recorders/players, radios, tuners, speakers, turntables, amplifiers, musical instruments, record changers, citizens' band broadcasting units and receivers, video game systems and compact disc players; (3) Sporting goods and jewelry,including,but not limited to: skis, ski poles, ski boots, ski bindings, in-line skates, snowboards, skateboards, golf clubs, guns,jewelry, coins, luggage,boots and furs; (4) Home\office equipment,including,but not limited to:typewriters,adding machines, calculators, computers, and any other computer components, portable air conditioners, cash registers, copying machines, dictating machines, automatic telephone answering machines, sewing machines, fax machines, cellular or mobile telephones and pagers; (5) Bicycles, including but not limited to: bicycle frames, bicycle derailleur assemblies,bicycle hand brake assemblies and other bicycle components; and (6) Any item of tangible personal property which is marked with a serial or identification number and the selling price of which is thirty dollars ($30.) or more, except motor vehicles, ranges, stoves, dishwashers, refrigerators,garbage disposals,boats,airplanes,clothes washers,clothes dryers, freezers, mobile homes and nonprecious scrap metal. Sec. 15-317. License required; annual fee. (a) It shall be unlawful for any person to engage in the business of secondhand dealing except as provided in and authorized by this Article and without first having obtained a license from the Financial Officer. Such license shall be kept current at all times, and failure to maintain a current license shall constitute a violation of this Section. (b) The annual license fee for carrying on the business of secondhand dealing shall be one hundred dollars ($100.), which shall be submitted together with an 3 application to the Financial Officer. Said license fee is non-refundable, unless the application is denied. Sec.15-318. Application for secondhand dealer license;renewal;limitation on use; appeals. (a) No license shall be issued by the Financial Officer until the application for a license has been filed with the city and investigated by the Chief of Police. Each applicant shall pay a non-refundable investigation and fingerprint fee at the time the application is filed in an amount not to exceed that charged b the Colorado Bureau ofInvesti ation. lia } niuOal] Y, w (b) No license shall be ,' E. issued to the following persons under the provisions of this Article: (1) Subject to the provisions contained in Section 24-5-101, C.R.S., a person who has been convicted of: any felony or any crime which under the laws of this state would be a felony; any crime of which fraud or intent to defraud was an element, whether in this state or elsewhere; any crime of embezzlement or larceny against an employer or business; or any criminal conviction or civil violation related to any law or ordinance pertaining to the secondhand dealer or pawn industry; (2) Any person under the age of eighteen (18); and (3) Any person who has made a false, misleading, or fraudulent statement on his or her application for the secondhand dealer license. (c) Within forty-five(45) days of receipt of an a lication ~ate orto renew a license, the Financial Officer shall tss enew such license, provided that the Chief of Police, after investigation, has determined that the applicant has operated the business in such a manner as to fully, comply with the requirements of this Article. (d) Licenses shall be limited to use at the premises specified in the application. No such license shall be transferable. (e) The revocation,suspension or denial of the issuance or renewal of a license may be appealed to the City Manager whose decision,after notice and hearing,shall be final. Further appeal may be taken pursuant to Colorado Rules of Civil Procedure. 4 . Sec. 15-319. Sales tax license required. In addition to the secondhand dealer license,every secondhand dealer shall also obtain a sales tax license as provided in Section 39-26-103, C.R.S., except that secondhand dealers and other persons operating a flea market or similar facility shall not be required to obtain a sales tax license,but shall be required to collect the sales tax and to remit the proceeds of said tax to the operator of the flea market or similar facility as provided by this Article. The operator shall obtain a sales tax license which is applicable to all sales occurring at the flea market or similar facility and shall collect the sales tax from each secondhand dealer operating therein who does not have his or her own sales tax license and shall remit such proceeds as provided by law for the remittance of sales taxes. Sec. 15-320. Keeping of records required. Every dealer licensed under this Article shall keep at his or her place of business an accurate, detailed record of every article of secondhand property acquired by purchase,consignment or trade. Such record shall include,and the seller,consignor or trader must provide at the time of the sale, consignment or trade, the following: (1) The name and date of birth of the consignor, seller or trader; • (2) The current street address of the consignor's, seller's or trader's residence; (3) The date, time and place of the consignment, sale or trade, and the purchase price or other monetary amount of the transaction; (4) An accurate and detailed account and description of the item consigned, sold or traded, including, but not limited to, any and all trademarks, identification numbers, serial numbers, owner-applied numbers, model numbers, brand names or other identifying marks on such item; (5) The identification number from any of the following forms of identification of the consignor, seller or trader: a. An identification card issued in accordance with Section 42-2- 302, C.R.S.; b. A valid state driver's license; c. A valid driver's license containing a picture issued by another state; d. A military identification card; e. A valid passport; f. An alien registration card; or 0 5 g. A non-picture identification document issued by a state or federal government entity, if in addition to the document, the secondhand dealer also obtains a clear imprint of the consignor's, seller's or trader's right index finger (or in the event the right index finger is missing, then the customer's left index finger). (6) A written declaration of ownership obtained from and signed by the seller, consignor, or trader in the presence of the secondhand dealer stating: a. whether such property that is the subject of the transaction is solely owned by the consignor, seller or trader and if not solely owned, attaching a power of attorney from all co-owners of the property authorizing the seller,consignor or trader to sell or otherwise dispose of such property; b. how long the seller, consignor or trader has owned the property; c. whether the consignor, seller or trader or someone else found the property; and d. if the property was found,a detailed description of the circumstances under which the property was found. (7) A declaration by the secondhand dealer that the secondhand dealer is the rightful owner of the secondhand property and a description of how the secondhand dealer obtained the property, including the serial number of such property, if available, or a copy of the bill of sale of such property; and (8) A declaration by the secondhand dealer that the secondhand dealer has knowledge of the requirement that a record of the sale or trade must be mailed or delivered to the local law enforcement agency, as required by §15-321 and by Section 18-13-114(1), C.R.S. Sec. 15-321. Forms to be sent to police and open to inspection. (a) Every secondhand dealer shall make such record as required by§15-320 upon forms to be delivered to such dealer by the Office of Police Services. A secondhand dealer shall mail or deliver the record of the consignment, sale or trade to the Office of Police Services within three(3)days of the date of such consignment, sale or trade and shall keep a copy of such record for at least three(3) years after the date of the consignment, sale or trade. (b) Upon request during ordinary business hours,the secondhand dealer shall submit and exhibit the records required to the inspection of any regular peace officer and permit any officer to make a copy. The dealer shall,upon request,exhibit for the 6 inspection of any of the officers any personal property or merchandise that may be received by the dealer. Sec. 15-322. Records for sales tax collection for flea market sales. (a) Every secondhand dealer or any person who is a dealer of new goods who is a retailer and sells such goods at a flea market or similar facility or any nonpermanent location shall keep and preserve suitable records of consignments, trades or sales made and such other books or accounts as may be necessary to determine the amount of tax for the collection of which the dealer is liable under Title 39, Article 26, Part 1, C.R.S. (b) It is the duty of every such person to keep and preserve for a period of three(3)years all invoices of goods and merchandise purchased for resale. All such books, invoices and other records shall be open for examination at any time by the Executive Director of the state Department of Revenue, said Director's duly authorized agents, or any peace officer. (c) In the case of flea markets and similar facilities in which secondhand property is offered for sale, on consignment, or trade, the operator thereof shall inform each secondhand dealer of the requirements of this Article and shall provide the form for recording the information required by § 15-320. • (d) In the case of flea markets and similar facilities in which secondhand property is offered for sale, consignment or trade, the operator thereof shall record the name and address of each secondhand dealer offering secondhand property for sale,consignment or trade at the flea market or similar facility,and the identification number of such dealer as obtained from any of the forms of identification enumerated in §15-320(4). Such record shall be mailed or delivered by the operator to the Office of Police Services within three (3) days of the date the secondhand dealer offered secondhand property for sale, consignment or trade at the flea market or similar facility. A copy of such record shall be retained by each secondhand dealer offering secondhand property for sale, consignment or trade at the flea market or similar facility. Sec. 15-323. Notice; penalties. Except in the case of flea markets and similar facilities as provided in this Article,every secondhand dealer shall conspicuously post a notice to be provided by the Office of Police Services in a place clearly visible to all buyers and traders which sets forth the provisions of this Article and of Sections 18-13-114 through 18-13- 116, C.R.S., and which sets forth the penalties for violating such sections and for violating Section 18-4-410,C.R.S.,concerning theft by receiving. Such notification shall include information to the effect that stolen property may be confiscated by any 7 peace officer and returned to the rightful owner without compensation to the buyer. Said notice may also include information regarding any reimbursement policy of the dealer. In the case of flea markets and similar facilities, the operator shall post the notice required by this Section in such a manner as to be obvious to all persons who enter the flea market or similar facility. Sec. 15-324. Certain property to be held and inspection of premises. (a) Every secondhand dealer shall keep all secondhand property acquired by purchase or trade for a period of thirty (30) days before it is sold and, during such period of time,such property shall not be changed in form or packaging or altered in any other way;provided,however,that serialized property,and stamped and assayed gold and silver bullion and gold coins,may be sold or transferred after ten(10)days, so long as the secondhand dealer records: (1) The identity and residential address of any person to whom the secondhand dealer sells or transfers such property by any means provided for in §15-320(6), and (2) the date, time and place of such sale or transfer. (b) Any peace officer may order a secondhand dealer to hold any taniil,rble erso&rpert, deposited with or in the custod of said secondhand d erA.�'� ..for purposes of further investigation. No sale or other disposition may be made of such property held by any secondhand dealer while the hold order remains in effect; provided, however, that no such hold order shall be effective for more than ninety(90) days unless a criminal prosecution has been undertaken with regard to the property that is the subject of the hold order, in which event the hold order shall remain in effect until the prosecuting agency has notified the secondhand dealer that the prosecution has been completed or dismissed. (c) The physical premises of any licensed secondhand dealer business, including any area in which tangible personal property is located, shall be subject to inspection by the Office of Police Services during all business hours and other times of apparent activity, for the purpose of investigation and inspection of records and inventory. Where any part of the licensed premises consists of a locked area, such area shall be made available for inspection, without delay, upon the request of any member of the Office of Police Services. For the purposes of this provision,the term "licensed premises" shall not include any private residence adjacent to the licensed premises except such portion of said residence, if any, that is used in the operation of the business of the secondhand dealer. 8 Sec. 15-325. Purchase from minors prohibited. • No secondhand dealer shall acquire by purchase or trade any secondhand personal property from any person under the age of eighteen(18)without the written consent of their parent or legal guardian. Sec. 15-326. Goods stolen or illegally obtained to be returned or surrendered. (a) Any secondhand dealer who has obtained property or merchandise, either new or secondhand,from any person,not knowing it to have been stolen or illegally obtained, shall deliver said property into the hands of the lawful owner when said owner has made a reasonably accurate and certain identification of said property by means of number, description or otherwise. (b) Unless a warrant is re uired by law or consent is given, any peace officer who determines,` � e that any article of personal property held by a secondhand dealer is stolen or illegally obtained may take such property into evidence after giving the secondhand dealer a receipt for the property which sets forth the Police Services' case number as well as the reason(s) for the confiscation. Sec. 15-327. Violations and penalties. In addition to the revocation, denial or suspension of any license issued , any . person who shall violate any of the provisions of this Article, and any person who trades with a secondhand dealer or any secondhand dealer who knowingly gives false information with respect to the information required by§15-320 shall be guilty of a misdemeanor punishable in accordance with §1-15. Introduced, considered favorably, and ordered published this 18th day of July, A.D. 2000, and to be presented for final passage on the 15th day of August, A.D. 2000. Mayor ATTEST: City Clerk 9 Passed and adopted on final reading this 15th day of August, A.D. 2000. Mayor ATTEST: City Clerk 10 AGENDA ITEM SUMMARY ITEM NUMBER: 33 A-13 DATE: July 18, 2000 FORT COLLINS CITY COUNCIL STAFF: Deryle O'Dell SUBJECT: Items Relating to the Licensing and Regulation of Pawnbrokers and Secondhand Dealers. RECOMMENDATION: Staff recommends adoption o e Or iopladi EXECUTIVE SUMMARY: f; A. First Reading of Ordinance No. 91, 2000, Amending Chapter 15, Article VIII of the City I Code Relating to Pawnbrokers. B. First Reading of OrdiChand olers Pdyapter 15, Article XI, of the City Code Relating to Seco The first major codification of the current ordinances regulating the pawn and secondhand dealer industries was completed in 1972, with some minor changes made in 1986. A City staff team (Police,Finance and City Attorney)began working on changes to the ordinances in June of 1997 in order to address some issues that have arisen in the past 13 years regarding implementation and enforcement of the ordinances. The costs associated with monitoring, enforcing and regulating the industr y, as required by the ordinances and state law,have i dOnaPeen Ymaai years. The different types of secondhand property involve tranmatically. %The proposed amendments to dider to increase consistency in reporting and monitoring procedures and provide those regulated with a clear understanding what is required of them. Throughout the process, staff asked for and received much input from both pawnbrokers and secondhand dealers. Staff held several meetings inviting all pawnbrokers licensed within the City and two meetings to which all secondhand dealers currently licensed, and also those who would be required to be licensed if the amendments were to be adopted, were invited. Staff also contacted communities along the front range, which have ordinances regulating these two industries to determine the current costs and practices in those communities. Changes are being recommended considering input from all these sources. DATE: July 18, 21JUIJ ITEM NUMBER: On November 16, 1999, staff brought proposed amendments to these Code provisions to Council. Primarily,those first amendments: ♦ imposed a per item transaction fee for pawn transactions; ♦ raised the license fee from $55 to $1,000; ♦ required background checks and permits for all pawn employees and managers; ♦ required fingerprints from persons pawning items; and ♦ prohibited any employee under 18 from engaging in pawn transactions. Council postponed the item indefinitely so that staff could address the concerns expressed at the meeting. As a result of issues r ' e ()p ov er 16 meeting,staff revisited the provisionswith the pawn kers anafe ommittee and further researched legal issues raised by Council. As compared to the last version presented to Council, the current proposed amendments: ♦ no longer include a per item transaction fee for pawn transactions; ♦ raise the license fee from$55 to $300; ♦ require a background check of managers only; ♦ require a single fingerprint from all persons pawning items; and ♦ provide the following alternative options for Council to consider regarding minor employees enga p s Option A: No ployee der e t n(18)ye of age shall make loans,purchase any goods or pro on of usine execute any document required - to be prepared pursuant to this Article, unless such employee is under the direct supervision of a manager who is physically present on the licensed premises. Option B: No licensee shall allow an employee under eighteen(18)years of age to make loans,purchase any goods or property, or execute any document required to be prepared pursuant to this Article. With regard to the secondhCondhan r o cr e anges include increasing the licensing fee from $55 to $1f 'ng ]' Pimnspec er dare, requiring a declaration of ownership from the seller of s rope n of the premises.