Subd. 1. Purpose.
A. 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 and transfer property stolen by others easily and quickly. The City Council also finds that consumer protection regulation is warranted in transactions involving pawnbrokers. The purpose of this section is to prevent pawn businesses from being used as facilities for the commission of crimes and to assure that such businesses comply with basic consumer protection standards, thereby protecting the public health, safety, and general welfare of the citizens of the city.
B. To help the City of Austin Police 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 section also implements and establishes the required use of the Automated Pawn System (APS).
Subd. 2. Definitions. For the purpose of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
A. 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 within a fixed period of time; 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 also includes buying personal property previously used, rented or leased, or selling it on consignment, the provisions of this chapter shall be applicable.
The following are expressly exempt from the definition of pawnbroker: any bank regulated by the State of Minnesota, the comptroller of the currency of the United States, the Federal Deposit Insurance Corporation, the board of governors of the Federal Reserve System, or any other federal or state authority and their affiliates; any bank or savings association whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation or any successor to it and all affiliates of those banks and savings associations; any state or federally chartered credit union; any industrial loan and thrift company or regulated lender subject to licensing and regulation by the Department of Commerce; and antique and second hand goods dealers, so long as they do not engage in the activities of a pawnbroker as defined herein.
B. 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, 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.
C. BILLABLE TRANSACTION. Every reportable transaction conducted by a pawnbroker except renewals, redemptions or extensions of existing pawns on items previously reported and continuously in the licensee's possession is a billable transaction.
Subd. 3. License required. No person shall engage in the business of pawnbroker at any location without a pawnbroker license for that location. No pawnbroker license may be transferred to a different location or a different person. Issuance of a license under this chapter shall not relieve the licensee from obtaining any other licenses required to conduct business at the same or any other locations.
Subd. 4. License fees.
A. The annual license fees for licenses issued under this chapter shall be established by City Council resolution within the following parameters. The billable transaction license fee shall reflect the cost of processing transactions electronically and manually and other related regulatory expenses as determined by the City Council, and shall be reviewed and adjusted, if necessary, at least annually. Licensees shall be notified in writing 30 days before any adjustment is implemented.
B. Billable transaction fees shall be billed monthly and are due and payable within 30 days. Failure to do so is a violation of this chapter.
Subd. 5. Investigation fee. An applicant for a new license under this chapter, or for the renewal of an existing license that is more than six months past due, shall deposit an investigation fee deposit with the City Clerk at the time an original application is submitted to cover the costs involved in verifying the license application and to cover the expense of any investigation needed to assure compliance with this chapter. The deposit and the actual investigation fee guidelines shall be established by resolution of the City Council.
Subd. 6. Expiration of license. All licenses shall expire on December 31.
Subd. 7. Application required.
A. Contents. An application form provided by the City Clerk must be completed by every applicant for a new license or for renewal of an existing license. Every new applicant must provide all the 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.
e. Any street address at which the applicant has lived during the preceding five years.
f. The type, name and location of every business or occupation in which the applicant has been engaged during the preceding five years and the name(s) and address(es) of the applicant's employer(s) and partner(s), if any, for the preceding five years.
g. Whether the applicant has ever been convicted of a felony, misdemeanor, 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 years prior to application.
j. 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.
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 Subd. 7.A.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, 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 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 Subd.7.A.1.a. through h. 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, 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 Subd.7.A.1.a. through h. of this section.
d. A list of all persons who control or own an interest in excess of 5% in such organization or business form or who are officers of the corporation or business form and all information concerning said persons required in Subd. 7.A.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. The applicant's social security number and Minnesota business identification number.
i. Such other information as the City Council may require.
5. 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, on forms provided by the City Clerk, within 14 days. The application must include all appropriate information required in Subd. 7. Upon completion of an investigation of a new manager, the licensee must pay an amount equal to the cost of the investigation as established by Council resolution to assure compliance with this chapter.
B. Application execution. All applications for a license under this section 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 or managing officer thereof.
C. Investigation. The employee designated by the City of Austin Police Chief 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 employee designated by the City of Austin Police Chief such evidence as the investigator may reasonably require in support of the statements set forth in the application.
D. Persons ineligible for a license. No licenses under this chapter 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, and has not shown competent evidence of sufficient rehabilitation and present fitness to perform the duties of a licensee under this chapter as prescribed by Minnesota Statutes; or
3. Is not of good moral character or repute.
Subd. 8. Bond required.
A. Before a license will be issued, every applicant must submit a $5,000 bond on the forms provided by the City Clerk. 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 30 days written notice to the city, which shall be served upon the City Clerk.
B. The bond may be used to reimburse losses as a result of violations of this section. In the event losses exceed the amount of the bond, those who suffered losses will be reimbursed based on a pro-rated share of losses reported within 14 days of the discovery of the alleged violations and on a first come first serve basis after that time. In the event losses are less than the amount of the bond, the City may use the bond to defer costs directly incurred in enforcing this section against the licensee as a result of the violations.
Subd. 9. 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 in a computerized record approved by the Austin Police Department:
A. 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.
B. The purchase price, amount of money loaned upon, or pledged therefore.
C. The maturity date of the transaction and the amount due, including monthly and annual interest rates and all pawn fees and charges.
D. 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.
E. Full name, residence address, 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.
F. The identification number and state of issue from any of the following forms of identification of the seller:
1. Current valid Minnesota driver's license.
2. Current valid Minnesota identification card.
3. Current valid photo identification card issued by another state or province of Canada.
G. The signature of the person identified in the transaction.
H. The licensee must also take a color photograph or color video recording of:
1. Each customer involved in a billable transaction.
2. Every item pawned or sold that does not have a unique serial or identification number permanently engraved or affixed.
If a photograph is taken, it must be at least two inches in length by two 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 City of Austin Police Chief or 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 sufficient size in a conspicuous place on the premises. If a video 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 by displaying a sign of sufficient size in a conspicuous place on the premises. The licensee must keep the exposed videotape for three months.
I. Digitized photographs. Licensees may fulfill the color photograph requirements in Subd. 9H. 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 9.H.
J. 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.
K. Inspection of records. The records must at all reasonable times be open to inspection by the City of Austin Police. Data entries shall be retained for at least three years from the date of transaction. Entries of required digital images shall be retained a minimum of 90 days.
Subd. 10. Daily reports to police.
A. Method.
1. Licensees must provide to the City of Austin Police the information required in Subd. 9A though 9G, by the business day following the date of the transaction. The licensee must display a sign of sufficient size, and in a conspicuous place in the premises, so as to inform all patrons that all transactions are reported to the City of Austin Police daily. Licensees must submit every reportable transaction to the City of Austin Police daily in the following manner.
2. Licensees must provide to the City of Austin Police the information required in Subd. 9.A. through 9.G., by transferring it from their computer to the City of Austin Police via modem or other approved electronic means. All required records must be transmitted completely and accurately after the close of business each day in accordance with standards and procedures established in the city using a dial-callback protocol or other procedures that address security concerns of the licensees and the issuing authority. The licensee must display a sign of sufficient size, in a conspicuous place in the premises, which informs all patrons that all transactions are reported to the City of Austin Police daily.
B. Billable transaction fees. Licensees will be charged for billable transactions in accordance with the established fee structure except:
1. If a licensee is temporarily unable to successfully transfer the required reports by modem, the licensee must provide the City of Austin Police printed copies of all reportable transactions for that date by 12:00 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 provide the required reports as detailed in Subd. 10.A., and must be charged at the regular rate for transactions through the close of the first business day following the failure, and at the regular rate plus a 10% surcharge for all subsequent billable transactions until the error is corrected; or
3. If the problem is determined to be outside the licensee's system, the licensee must provide the required reports in detail in Subd. 10.A., and will be billed at the regular rate for billable transactions until the error is corrected.
4. If a licensee who has consistently reported via modem is unable to capture, digitize or transmit the photographs required in Subd. 9.H. and 9.I., the licensee must immediately take all required photographs with a still camera, immediately develop the pictures, cross-reference the photographs to the correct transaction, and deliver them to the City of Austin Police by 12:00 noon the next business day. Billable transactions will be charged at the regular rate for transactions through the close of the first business day following the failure, and at the surcharged rate for all subsequent billable transactions until the error is corrected.
5. Subd. 10.B.1. through 4. notwithstanding, the City of Austin Police may, upon presentation of extenuating circumstances, extend the period that a qualifying licensee is billed at the regular rate for billable transactions.
Subd. 11. Receipt required. Every licensee must provide a receipt to the party identified in every reportable transaction and must maintain a duplicate of that receipt for three years. The receipt must include at least the following information:
A. The name, address and telephone number of the licensed business.
B. The date and time the item was received by the licensee.
C. Whether the item was pawned or sold, or the nature of the transaction.
D. 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.
E. The signature or unique identifier of the licensee or employee that conducted the transaction.
F. The amount advanced or paid.
G. The monthly and annual interest rates, including all pawn fees and charges.
H. The last regular day of business by which the item must be redeemed by the pledgor without risk that the item will be sold, and the amount necessary to redeem the pawned item on that date.
I. The full name, residence address, residence telephone number, and date of birth of the pledgor or seller.
J. The identification number and state of issue from any of the following forms of identification of the seller:
1. Current valid Minnesota driver's license.
2. Current valid Minnesota identification card.
3. Current valid photo driver's license or identification card issued by another state or a province of Canada.
K. Description of the pledgor or seller including approximate sex, height, weight, race, color of eyes and color of hair.
L. The signature of the pledgor or seller.
M. All printed statements as required by state statute.
Subd. 12. Redemption period. Any person pledging, pawning or depositing an item for security must have a minimum of 60 days from the date of that transaction to redeem the item before it may be forfeited and sold. During the 60 day holding period, items may not be removed from the licensed location except as provided in Subd. 19. 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 pledgor at the time of the initial transaction and signed by the pledgor, or with the approval of the City of Austin Police. Written authorization for release of property to persons other than original pledgor must be maintained along with original transaction record in accordance with Subd. 9.J.
Subd. 13. Holding period. Any item purchased by a licensee must not be sold or otherwise transferred for 30 days from the date of the transaction. An individual may redeem an item no sooner than 72 hours after the item was received on deposit, excluding Sundays and legal holidays.
Subd. 14. 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 72 hours and will remain in effect for 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 Subd. 14.B., whichever comes first.
B. Order to hold. Whenever the City of Austin Police Chief or designee notifies a licensee not to sell an item, the item must not be sold or removed from the licensed premises until authorized in writing to be released by the City of Austin Police Chief or designee. The hold order shall be confirmed in writing within 72 hours. The order to hold shall expire 90 days from the date it is placed unless the City of Austin Police Chief or 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 City of Austin Police Chief or designee may:
1. Physically confiscate and remove it from the shop, pursuant to a written order from the City of Austin Police Chief or designee, or
2. Place the item on hold or extend the hold as provided in Subd. 14.B., and leave it in the shop.
When an item is confiscated, the person doing so shall provide the 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 City of Austin Police Chief or designee shall so notify the licensee.
Subd. 15. Inspection of items. At all times during the terms of the license, the licensee must allow the City of Austin Police to enter the premises where the licensed business is located, including all off-site storage facilities as authorized in Subd. 19., during normal business hours, except that they may enter at any time in an emergency, for the purpose of inspecting such premises and inspecting the items, warehouse and merchandise and records therein to verify compliance with this chapter or other applicable laws.
Subd. 16. Label required. Licensee 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 City of Austin Police, whichever is applicable, and the date the item is out of pawn or can be sold, if applicable. Labels shall not be re-used.
Subd. 17. Prohibited acts.
A. No person under the age of 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 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 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 or sell, or attempt to pawn or sell, goods that they do not have a legal undivided ownership interest in.
F. No person may make false statements or representations regarding the ownership of items to be sold or pawned, nor may any person provide falsified or altered forms of identification to a pawnbroker.
Subd. 18. Denial, suspension or revocation. Any license under this chapter may be denied, suspended or revoked for one or more of the following reasons:
A. The proposed use does not comply with the City of Austin Zoning Ordinance or state statutes relating to the location of pawnbrokers.
B. The proposed use does not comply with any health, building, building maintenance or other provisions of this code or state law.
C. The applicant or licensee has failed to comply with one or more provisions of this chapter.
D. 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.
E. Fraud, misrepresentation or bribery in securing or renewing a license.
F. Fraud, misrepresentation or false statements made in the application and investigation for, or in the course of, the applicant's business.
G. Violation within the preceding five years of any law relating to theft, damage or trespass to property, sale of a controlled substance, or operation of a business.
H. The owner of the premises licensed or to be licensed would not qualify for a license under the terms of this chapter.
Subd. 19. Business at only one place. A license under this chapter authorizes the licensee to carry on its business only at the permanent place of business designated in the license. However, upon written request, City of Austin Police may approve an off-site locked and secured storage facility. The licensee shall permit inspection of the facility in accordance with Subd. 15. All provisions of this chapter 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 premises which extends for more than six months.
Subd. 20. Severability. Should any subsection, clause or other provision of this section be declared by a court of competent jurisdiction to be invalid such decision shall not affect the validity of the ordinance as a whole or any part other than the part so declared invalid.
(Ord. 535, Second Series, passed 5-15-06) Penalty, see § 6.99