HomeMy WebLinkAboutNo 851 Automated Pawn System
Ordinance 851
Maplewood Automated Pawn System
Purpose.The city council finds that use of services provided by pawnbrokers provides an
opportunity for the commission of crimes and their concealment because pawn businesses have
the ability to receive andtransfer property stolen by others easily and quickly. The city council
also finds that consumer protection regulation is warranted in transactions involving
pawnbrokers. The city council further finds that the pawn industry has outgrown the city's
current ability to effectively or efficiently identify criminal activity related to pawn shops. The
purpose of this article is to prevent pawn businesses from being used as facilities for the
commission of crimes, and to assure that such businessescomply with basic consumer
protection standards, thereby protecting the public health, safety, and general welfare of the
citizens of the city.
To help the police department better regulate current and future pawn businesses, decrease
and stabilize costs associated with the regulation of the pawn industry, and increase
identification of criminal activities in the pawn industry through the timely collection and sharing
of pawn transaction information, this ordinance also implements and mandates the use of the
automated pawn system (APS).
Definitions.When used in this ordinance, the following words shall mean:
Pawnbroker.Any natural person, partnership or corporation, either as principal, or agent
or employee thereof, who loans money on deposit or pledge of personal property, or other
valuable thing, or who deals in the purchasing of personal property, or other valuable thing on
condition of selling the same back again at a stipulated price, or who loans money secured by
chattel mortgage on personal property, taking possession of the property or any part thereof so
mortgaged. To the extent that a pawnbroker's business includes buying personal property
previously used, rented or leased, or selling it on consignment, the provisions of this article
shall be applicable.
Reportable transaction.Every transaction conducted by a pawnbroker in which
merchandise is received through a pawn, purchase, consignment or trade, or in which a pawn is
renewed, extended or redeemed, or for which a unique transaction number or identifier is
generated by their point-of-sale software, or an item is confiscated by law enforcement, is
reportable except:
(1) The bulk purchase or consignment of new or used merchandise from a merchant,
manufacturer or wholesaler having an established permanent place of business, and the retail
sale of said merchandise, provided the pawnbroker must maintain a record of such purchase
or consignment which describes each item, and must mark each item in a manner which
relates it to that transaction record.
(2) Retail and wholesale sales of merchandise originally received by pawn or purchase, and
for which all applicable hold and/or redemption periods have expired.
Billable transaction.Every reportable transaction conducted by a pawnbroker is a
billable transaction except renewals, redemptions or extensions of existing pawns on items
previously reported and continuously in the licensee's possession, voided transactions,
and confiscations.
License fees.
(a) The annual license fees for licenses issued under this article shall be imposed, set,
established and fixed by the city council by resolution from time to time reflecting a reasonable
estimate of the actual costs of administering, processing and investigating the license
application, as determined by the city council.
(b) The billable transaction license fee shall reflect the cost of processing transactions and other
related regulatory expenses as determined by the city council, and shall be reviewed and
adjusted, if necessary, every six (6) months. Licensees shall be notified in writing thirty (30)
days before any adjustment is implemented.
(c) Billable transaction fees shall be billed monthly and are due and payable within thirty (30)
days. Failure to do so is a violation of this article.
Application required.
(a) (Contents.) An application form provided by the department of licenses and consumer
services must be completed by every applicant for a new license or for renewal of an existing
license. Every new applicant must provide allthe following information:
(1) If the applicant is a natural person:
a. The name, place and date of birth, street resident address, and phone number of
applicant.
b. Whether the applicant is a citizen of the United States or resident alien.
c. Whether the applicant has ever used or has been known by a name other than the
applicant's name, and if so, the name or names used and information concerning dates and
places used.
d. The name of the business if it is to be conducted under a designation, name, or style
other than the name of the applicant and a certified copy of the certificate as required by
Minnesota Statutes, Section 333.01.
e. The street address at which the applicant has lived during the preceding five (5)
years.
f. The type, name and location of every business or occupation in which the applicant
has been engaged during the preceding five (5) years and the name(s) and address(es) of the
applicant's employer(s) and partner(s), if any, for the proceeding five (5) years.
g. Whether the applicant has ever been convicted of a felony, crime, or violation of any
ordinance other than a traffic ordinance. If so, the applicant must furnish information as to the
time, place, and offense of all such convictions.
h. The physical description of the applicant.
i. Applicant's current personal financial statement and true copies of the applicant's
federal and state tax returns for the two (2) years prior to application.
j. If the applicant does not manage the business, thename of the manager(s) or other
person(s) in charge of the business and all information concerning each of them required in a.
through h. of subdivision (1) of this section.
(2) If the applicant is a partnership:
a. The name(s) and address(es) of all general and limited partners and all information
concerning each general partner required in subdivision (1) of this section.
b. The name(s) of the managing partner(s) and the interest of each partner in the
licensed business.
c. A true copy of the partnership agreement shall be submitted with the application. If
the partnership is required to file a certificate as to a trade name pursuant to Minnesota
Statutes, Section 333.01, a certified copy of such certificate must be attached to the application.
d. A true copy of the federal and state tax returns for partnership for the two (2) years
prior to application.
e. If the applicant does not manage the business, the name of the manager(s) or other
person(s) in charge of the business and all information concerning each of them required in a.
through h. of subdivision (1) of this section.
(3) If the applicant is a corporation or other organization:
a. The name of the corporation or business form, and if incorporated, the state of
incorporation.
b. A true copy of the Certificate of Incorporation, Articles of Incorporation or Association
Agreement, and By-laws shall be attached to the application. If the applicant is a foreign
corporation, a Certificate of Authority as required by Minnesota Statutes, Section 303.06, must
be attached.
c. The name of the manager(s) or other person(s) in charge of the business and all
information concerning each manager, proprietor, or agent required in a. through h. of
subdivision (1) of this section.
d. A list of all persons who control or own an interest in excess of five (5) percent in
such organization or business form orwho are officers of the corporation or business form and
all information concerning said persons required in subdivision (1) above. This subdivision (d),
however, shall not apply to a corporation whose stock is publicly traded on a stock exchange
and is applying for a license to be owned and operated by it.
(4) For all applicants:
a. Whether the applicant holds a current pawnbroker, precious metal dealer or
secondhand goods dealer license from any other governmental unit.
b. Whether the applicant has previously been denied, or had revoked or suspended, a
pawnbroker, precious metal dealer, or secondhand dealer license from any other governmental
unit.
c. The location of the business premises.
d. If the applicant does not own the business premises, a true and complete copy of the
executed lease.
e. The legal description of the premises to be licensed.
f.Whether all real estate and personal property taxes that are due and payable for the
premises to be licensed have been paid, and if not paid, the years and amounts that are unpaid.
g. Whenever the application is for premises either planned or under construction or
undergoing substantial alteration, the application must be accompanied by a set of preliminary
plans showing the design of the proposed premises to be licensed.
h. Such other information as the city council or issuing authority may require.
(b) New manager. When a licensee places a manager in charge of a business, or if the named
manager(s) in charge of a licensed business changes, the licensee must complete and submit
the appropriate application within fourteen (14) days. The applicationmust include all
appropriate information required in this section.
(1) An investigation fee shall be charged an applicant by the city in such amount as may be
imposed, set, established and fixed by the city council by resolution from time to time reflecting
an amount equal to the cost of the investigation to assure compliance with this article.
(c) Application execution. All applications for a license under this article must be signed and
sworn to under oath or affirmation by the applicant. If the application is that of a natural person,
it must be signed and sworn to by such person; if that of a corporation, by an officer thereof; if
that of a partnership, by one of the general partners; and if that of an unincorporated
association, by the manager ormanaging officer thereof.
(d) Investigation. The police department must investigate into the truthfulness of the statements
set forth in the application and shall endorse the findings thereon. The applicant must furnish to
the police license inspector such evidence as the inspectormay reasonably require in support of
the statements set forth in the application.
(e) Public hearing. The council member may request a public hearing at council, or in the
evening hours at a location in the approximate vicinity of the proposed location.
(f) Persons ineligible for a license. No licenses under this article will be issued to an applicant
who is a natural person, a partnership if such applicant has any general partner or managing
partner, a corporation or other organization if such applicant has any manager, proprietor or
agent in charge of the business to be licensed, if the applicant:
(1) Is a minor at the time that the application is filed;
(2) Has been convicted of any crime directly related to the occupation licensed as
prescribed by Minnesota Statutes, Section 364.03, Subd. 2, and has not shown competent
evidence of sufficient rehabilitation and present fitness to perform the duties of a licensee under
this article as prescribed by Minnesota Statutes, Section 364.03, Subd. 3; or
(3) Is not of good moral character or repute.
Bond required.Before a license will be issued, every applicant must submit a five thousand
dollar ($5,000.00) bond on the forms provided by the licensing authority. All bonds must be
conditioned that the principal will observe all laws in relation to pawnbrokers, and will conduct
business in conformity thereto, and that the principal will account for and deliver to any person
legally entitled any goods which have come into the principal's hand through the principal's
business as a pawnbroker, or in lieu thereof, will pay the reasonable value in money to the
person. The bond shall contain a provision that no bond may be canceled except upon thirty
(30) days written notice to the city, which shall be served upon the licensing authority.
Records required. At the time of any reportable transaction other than renewals, extensions
or redemptions, every licensee must immediately record in English the following information by
using ink or other indelible medium on forms or in a computerized record approved by the
police department:
(1) A complete and accurate description of each item including, but not limited to, any
trademark, identification number, serial number, model number, brand name, or other identifying
mark on such an item.
(2) The purchase price, amount of money loaned upon, or pledged therefore.
(3) The maturity date of the transaction and the amount due, including monthly and annual
interest rates and all pawn fees and charges.
(4) Date, time and place the item of property was received by the licensee, and the unique
alpha and/or numeric transaction identifier that distinguishes it from all other transactions in the
licensee's records.
(5) Full name, current residence address, current residence telephone number, date of birth
and accurate description of the person from whom the item of the property was received,
including: sex, height, weight, race, color of eyes and color of hair.
(6) The identification number and state of issue from any of the following forms of
identification of the seller:
a. Current valid Minnesota driver's license.
b. Current valid Minnesota identification card.
c. Current valid photo identification card issued by another state or province of Canada.
(7) The signature of the person identified in the transaction.
(8) Effective sixty (60) days from the date of notification by the police department of
acceptable video standards the licensee must also take a color photograph or color video
recording of:
a. Each customer involved in a billable transaction.
b. Every item pawned or sold that does not have a unique serial or identification number
permanently engraved or affixed.
The required photograph must be at least two (2) inches in length by two (2) inches in width
and must be maintained in such a manner that the photograph can be readily matched and
correlated with all other records of the transaction to which they relate. Such photographs must
be available to the chief of police, or the chief's designee, upon request.The major portion of
the photograph must include an identifiable front facial close-up of the person who pawned or
sold the item. Items photographed must be accurately depicted. The licensee must inform the
person that he or she is being photographed by displaying a sign of sufficientsize in a
conspicuous place in the premises. If a video photograph is taken, the video camera must zoom
in on the person pawning or selling the item so as to include an identifiable close-up of that
person's face. Items photographed by video must be accurately depicted. Video photographs
must be electronically referenced by time and date so they can be readily matched and
correlated with all other records of the transaction to which they relate. The licensee must inform
the person that he or she is being videotaped orally and by displaying a sign of sufficient size in
a conspicuous place on the premises. The licensee must keep the exposed videotape for three
(3) months.
(9) Digitized photographs. Effective sixty (60) days from the date of notification bythe police
department licensees must fulfill the color photograph requirements in section (RECORDS
REQUIRED)(8) by submitting them as digital images, in a format specified by the issuing
authority, electronically cross-referenced to the reportable transaction they are associated with.
Notwithstanding the digital images may be captured from required video recordings, this
provision does not alter or amend the requirements in subdivision (8).
(10) Renewals, extensions and redemptions. For renewals, extensions and redemptions, the
licensee shall provide the original transaction identifier, the date of the current transaction, and
the type of transaction.
(11) Inspection of records. The records must at all reasonable times be open to inspection
by the police department or department of licenses and consumer services. Data entries shall
be retained for at least three (3) years from the date of transaction. Entries of required digital
images shall be retained a minimum of ninety (90) days.
Daily reportsto police.
(a) Effective no later than sixty (60) days after the police department provides licensees with the
current version of the Automated Pawn System Interchange File Specification,licensees must
submit every reportable transaction to the policedepartment daily in the following manner:
(1) Licensees must provide to the police department all reportable transaction information by
transferring it from their computer to the Automated Pawn System via modem using the current
version of the Automated Pawn System Interchange File Specification. All required records
must be transmitted completely and accurately after the close of business each day in
accordance with standards and procedures established by the issuing authority. Any transaction
that does not meet the Automated Pawn System Interchange File Specification must be
corrected and resubmitted the next business day. The licensee must display a sign of sufficient
size, in a conspicuous place in the premises, which informs patrons that all transactions are
reported to the police department daily.
(b) Billable transaction fees. Licensees will be charged for each billable transaction reported to
the police department.
(1) If a licensee is unable to successfully transfer the required reports bymodem, the
licensee must provide the police department, upon request, printed copies of all reportable
transactions along with the video tape(s) for that date, by noon the next business day;
(2) If the problem is determined to be in the licensee's system and is not corrected by the
close of the first business day following the failure, the licensee must continue to provide the
required reports as detailed in section (DAILY REPORTS TO POLICE)(b)(1), and must be
charged a fifty dollar ($50.00) reportingfailure penalty, daily, until the error is corrected; or
(3) If the problem is determined to be outside the licensee's system, the licensee must
continue to provide the required reports in (DAILY REPORTS TO POLICE)(b)(1), and resubmit
all such transactions via modem when the error is corrected.
(4) If a licensee is unable to capture, digitize or transmit the photographs required in
(RECORDS REQUIRED) (9), the licensee must immediately take all required photographs with
a still camera, cross-reference the photographs to the correct transaction, and make the
pictures available to the police department upon request.
(5) Regardless of the cause or origin of the technical problems that prevented the licensee
from uploading their reportable transactions, upon correction of the problem, the licensee shall
upload every reportable transaction from every business day the problem had existed.
(6) (DAILY REPORTS TO POLICE)(b) (1) through (3) notwithstanding, the police
department may, upon presentation of extenuating circumstances, delay the implementation of
the daily reporting penalty.
Receipt required.Every licensee must provide a receipt to the party identified inevery
reportable transaction and must maintain a duplicate of that receipt for three (3) years. The
receipt must include at least the following information:
(1) The name, address and telephone number of the licensed business.
(2) The date and time the item was received by the licensee.
(3) Whether the item was pawned or sold, or the nature of the transaction.
(4) An accurate description of each item received including, but not limited to, any
trademark, identification number, serial number, model number, brand name, or other identifying
mark on such an item.
(5) The signature or unique identifier of the licensee or employee that conducted the
transaction.
(6) The amount advanced or paid.
(7) The monthly and annual interest rates, including all pawn fees and charges.
(8) The last regular day of business by which the item must be redeemed by the pledger
without risk that the item will be sold, and the amount necessary to redeem the pawned item on
that date.
(9) The full name, current residence address, current residence telephone number, and date
of birth of the pledger or seller.
(10) The identification number and state of issue from any of the following forms of
identification of the seller:
a. Current valid Minnesota driver's license.
b. Current valid Minnesota identification card.
c. Current valid photo driver's license or identification card issued by another state or
province of Canada.
(11) Description of the pledger or seller including approximate sex, height, weight, race,
color of eyes and color of hair.
(12) The signature of the pledger or seller.
(13) All printed statements as required by state statute 325J.04 subdivision 2, or any other
applicable statutes.
Redemptionperiod.Any person pledging, pawning or depositing an item for security must
have a minimum of ninety (90) days from the date of that transaction to redeem the item before
it may be forfeited and sold. During the ninety (90) day holding period, items maynot be
removed from the licensed location except as provided in (BUSINESS AT ONLY ONE PLACE).
Licensees are prohibited from redeeming any item to anyone other than the person to whom the
receipt was issued or, to any person identified in a written and notarized authorization to redeem
the property identified in the receipt, or to a person identified in writing by the pledger at the time
of the initial transaction and signed by the pledger, or with approval of the police license
inspector. Written authorization for release of property to persons other than original pledger
must be maintained along with original transaction record in accordance with (RECORDS
REQUIRED) (10).
Holding period. Any item purchased or accepted in trade by a licensee must not be sold or
otherwise transferred for thirty (30) days from the date of the transaction. An individual may
redeem an item seventy-two (72) hours after the item was received on deposit, excluding
Sundays and legal holidays.
Police order to hold property.
(a) Investigative hold. Whenever a law enforcement official from any agency notifies a licensee
not to sell an item, the item must not be sold or removed from the premises. The investigative
hold shall be confirmed in writing by the originating agency within seventy-two (72) hours and
will remain in effect for fifteen (15) days from the date of initial notification, or until the
investigative order is canceled, or until an order to hold/confiscate is issued, pursuant to section
\[b\] (POLICE ORDER TO HOLD)below, whichever comes first.
(b) Order to hold. Whenever the chief of police, or the chief's designee, notifies a licensee not to
sell an item, the item must not be sold or removed from the licensed premises until authorized to
be released by the chief orthe chief's designee. The order to hold shall expire ninety (90) days
from the date it is placed unless the chief of police or the chief's designee determines the hold is
still necessary and notifies the licensee in writing.
(c) Order to confiscate. If an item is identified as stolen or evidence in a criminal case, the chief
or chief's designee may:
(1) Physically confiscate and remove it from the shop, pursuant to a written order from the
chief or the chief's designee, or
(2) Place the item on hold or extend the hold as provided in (POLICE ORDER TO HOLD
PROPERTY) (b), and leave it in the shop.
When an item is confiscated, the person doing so shall provide identification upon request of
the licensee, and shall providethe licensee the name and phone number of the confiscating
agency and investigator, and the case number related to the confiscation.
When an order to hold/confiscate is no longer necessary, the chief of police, or chief's
designee shall so notify the licensee.
Inspection of items.At all times during the terms of the license, the licensee must allow law
enforcement officials to enter the premises where the licensed business is located, including all
off-site storage facilities as authorized in (BUSINESS AT ONLY ONE PLACE), during normal
business hours, except in an emergency, for the purpose of inspecting such premises and
inspecting the items, ware and merchandise and records therein to verify compliance with this
article or other applicable laws.
Label required.Licensees must attach a label to every item at the time it is pawned,
purchased or received in inventory from any reportable transaction. Permanently recorded on
this label must be the number or name that identifies the transaction in the shop's records, the
transaction date, the name of the item and the description or the model and serial number of the
item as reported to the police department, whichever is applicable, and the date the item is out
of pawn or can be sold, if applicable. Labels shall not be re-used.
Prohibited acts.
(a) No person under the age of eighteen (18) years may pawn or sell or attempt to pawn or sell
goods with any licensee, nor may any licensee receive any goods from a person under the age
of eighteen (18) years.
(b) No licensee may receive any goods from a person of unsound mind or an intoxicated
person.
(c) No licensee may receive any goods, unless the seller presents identification in the form of a
valid driver's license, a valid State of Minnesota identification card, or current valid photo driver's
license or identification card issued by the state or providence of residency of the person from
whom the item was received.
(d) No licensee may receive any item of property that possesses an altered or obliterated serial
number or operation identification number or any item of property that has had its serial number
removed.
(e) No person may pawn, pledge, sell, consign, leave, or deposit any article of property not their
own; nor shall any person pawn, pledge, sell, consign, leave, or deposit the property of another,
whether with permission or without; nor shall any person pawn, pledge, sell, consign, leave, or
deposit any article of property in which another has a security interest; with any licensee.
(f) No person seeking to pawn, pledge, sell, consign, leave, or deposit any article of property
with any licensee shall give a false or fictitious name; nor give a false date of birth; nor give a
false or out of date address of residence or telephone number; nor present a false or altered
identification, or the identification of another; to any licensee.
Denial, suspension or revocation.Any license under this article may be denied,
suspended or revoked for one or more of the following reasons:
(1)The proposed use does not comply with any applicable zoning code.
(2) The proposed use does not comply with any health, building, building maintenance or
other provisions of the Maplewood Code of Ordinances, or state law, or other lawfully enacted
legalauthority.
(3) The applicant or licensee has failed to comply with one or more provisions of this article.
(4) The applicant is not a citizen of the United States or a resident alien, or upon whom it is
impractical or impossible to conduct a background or financial investigation due to the
unavailability of information.
(5) Fraud, misrepresentation or bribery in securing or renewing a license.
(6) Fraud, misrepresentation or false statements made in the application and investigation
for, or in the course of, the applicant's business.
(7) Violation within the preceding five (5) years, of any law relating to theft, damage or
trespass to property, sale of a controlled substance, or operation of a business.
(8) The owner of the premises licensed or to be licensed would not qualify for a license
under the terms of this article.
Business at only one place.A license under this article authorizes the licensee to carry on its
business only at the permanent place of business designated in the license. However, upon
written request, the police license inspector may approve an off-site locked and secured storage
facility. The licensee shall permit inspection of the facility in accordance with (INSPECTION OF
ITEMS). All provisions of this article regarding record keeping and reporting apply to the facility
and its contents. Property shall be stored in compliance with all provisions of the city code. The
licensee must either own the building in which the business is conducted, and any approved off-
site storage facility, or have a lease on the business premise that extends for more than six (6)
months.
Separability.Should any section, subsection, clause or other provision of this article be
declared by a court of competent jurisdiction to be invalid such decision shall not effect the
validity of the ordinance as a whole or any part other than the part so declared invalid.
Passed by the Maplewood City Council on September 13, 2004.