(A) Purpose. The City Council of the City of Columbia Heights finds that pawnbrokers, secondhand goods merchants and precious metal dealers potentially provide an opportunity for the concealment of crimes because such businesses have the ability to receive and transfer stolen property easily and quickly. The City Council also finds that consumer protection regulation is warranted in transactions involving pawnbrokers, secondhand goods merchants and precious metal dealers. The purpose of this section is, therefore, to prevent pawnbroking, secondhand goods and precious metal businesses from being used as facilities for commission of crimes and to assure that such businesses comply with the basic consumer protection standards, thereby protecting the public health, safety and general welfare of the residents of the city.
(B) License required. No person shall exercise, operate, carry-on or be engaged in the business of pawnbroker, secondhand goods merchant or precious metal dealer within the city unless such person is currently licensed under this chapter. A license under this section shall authorize the licensee to carry on business only at the permanent place of business designated in the license. No license may be transferred to a different location or different licensee. A separate license will be required for each business in this section. For instance, a pawnbroker may not conduct, operate or engage in the business of secondhand goods dealer without having obtained a secondhand goods dealer license in addition to a pawnbroker license.
(C) Definitions. The following words and terms when used in this section shall have the following meanings:
ANTIQUE. Work of art, furniture, decorative object made at an earlier period at least 30+ years old.
MINOR. Any natural person under the age of 18 years.
PAWNBROKER. A person who loans money on deposit or pledge of personal property or other valuable items or who deals in the purchasing of personal property or other valuable items on condition of selling the same back again at a stipulated price or who loans money secured by security interest on personal property or any part thereof. This section does not apply to a person doing business under and as permitted by any law of this state or of the United States relating to banks, building and loan associations, savings and loan associations, trust companies or credit unions.
PERSON. One or more natural persons; a partnership, including a limited partnership; a corporation, including a foreign, domestic or nonprofit corporation; a trust; a political subdivision of the state; or any other business organization.
PRECIOUS METALS. Silver, gold or platinum.
PRECIOUS METALS DEALER. Any person, partnership or corporation, either as principal or agent, who engages in the business of buying or selling secondhand hand items containing precious metal, including but not limited to jewelry, watches, coins, eating utensils, candlesticks, decorative objects and ingots.
SECONDHAND GOODS DEALER/MERCHANT. A person engaging in the business of buying or selling, or both, of any secondhand goods or merchandise previously sold for public consumption.
(D) Exemptions.
(1) Pawnbrokers and secondhand goods dealers shall not apply to or include the following:
(a) The sale of secondhand goods where all of the following are present:
1. The sale is held an property occupied as a dwelling or owned, rented or leased by a charitable or political organization.
2. That no sale exceeds a period of 48 consecutive hours.
3. That no more than two sales are held in any 12-month period.
4. That none of the items offered for sale shall have been purchased for resale or received on consignment for the purpose of resale.
(b) The sale of secondhand books or magazines, sport trading cards, sound or video recordings, films, or electronic game cartridges.
(c) The sale of goods at an auction held by a state licensed auctioneer.
(d) The business of buying or selling only those secondhand goods taken as a part or full payment for new goods and where such business is incidental to and not the primary business of a person.
(e) A bulk sale of property from a merchant, manufacturer or wholesaler having an established place of business or of goods sold at open sale from bankrupt stock.
(f) Goods sold at what is commonly known as a farmer's market. Farmer's market allows the sale of vegetables, fruits, garden produce, farm produce, and arts and crafts specifically defined as items which are handmade and sold only by the creator of the item or the creator's immediate family.
(g) Goods sold at an exhibition, providing the exhibition does not last longer than ten days in any 12-month period.
(h) Sales by a person licensed as a motor vehicle dealer.
(i) The exclusive sale of antiques.
(j) A merchant exclusively selling secondhand clothing or clothing on consignment, or secondhand furniture.
(k) Sales made by the sheriff or other public officials in the discharge of their official duties.
(l) Sales made by assignees or receivers appointed in the state to make sales for the benefit of creditors.
(2) Precious metal dealers shall not apply to persons conducting the following transactions:
(a) Transactions at occasional “garage” or “yard” sales, estate sales or farm auctions held at the descendent's residence, except that precious metal dealers must comply with the requirements of M.S. §§ 325F.734 to 325F.742, as they may be amended from time to time, for these transactions.
(b) Transactions regulated by M.S. Chapter 80A, as it may be amended.
(c) Transactions involving the purchase of precious metal grindings, filings, slag, sweeps, scraps, or dust from an industrial manufacturer, dental lab, dentist or agent thereof.
(d) Transactions involving the purchase of photographic film, such as lithographic and X- ray film, or silver residue or flake recovered in lithographic and X-ray film processing.
(e) Transactions involving bullion.
(f) Transactions in which the secondhand item containing precious metal is exchanged for a new item containing precious metal and the value of the new item exceeds the value of the secondhand item.
(g) Transactions between precious metal dealers if both dealers are licensed under M.S. § 325F.733, as it may be amended from time to time, or if the seller's business is located outside the state to a dealer licensed under M.S. § 325F.733.
(E) License application content.
(1) Applications for a pawnbroker license, secondhand merchant license or precious metals dealers license to be issued under this section shall contain information as required on forms supplied by the city. The application shall state whether the applicant is a natural person, partnership, corporation or other form of organization.
(a) Full legal name, place and date of birth, street residence address and length of time at that address of the applicant.
(b) Whether applicant has ever used or been known by a name other than his true name and, if so, what was such name or names, and information concerning dates and places where used.
(c) The name of the business if it is to be conducted under a designation, name or style other than the full individual name of the applicant.
(d) Kind, name and location of every business or occupation applicant has been engaged in during the preceding five years.
(e) Names and addresses of applicant's employers and partners, if any, for the preceding five years.
(f) Whether applicant has ever been convicted of a felony, gross misdemeanor or misdemeanor, excluding traffic violations, and, if so, the date and place of conviction and the nature of the offense.
(g) If the applicant has not resided in the city for three years last preceding the date of application, at least four character references from residents of the State of Minnesota must be provided.
(h) If the applicant is a partnership, the names and addresses of all partners and all information concerning each partner as is required of a single applicant. A managing partner, or partners, shall be designated. The interest of each partner in the business shall be disclosed.
(i) If the applicant is a corporation or other association, the following additional information shall be required:
1. Name and, if incorporated, the state of incorporation.
2. A true copy of the certificate of incorporation, articles of incorporation or association agreement and by-laws and, if a foreign corporation, a certificate of authority as described in Minnesota Statutes.
3. The name of the operating officer or proprietor or other agent in charge of the premises to be licensed, giving all the information about said person as is required of a single applicant. As used in this section, the term
OPERATING OFFICER shall mean the person responsible for the day- to-day operating decisions of the licensed premises.
4. A list of all persons who, singly or together with their spouse, or a parent, brother, sister or child or either of them, own or control an interest in said corporation or association in excess of 5% or who are officers or directors of said corporation or association; together with their addresses and all information as is required of a single applicant.
(j) The full legal name, address and home phone number of the manager or proprietor of the business.
(k) Each application shall be accompanied by a statement indicating the amount of investment the applicant has in the business, building, premises, fixtures, furniture, stock in trade, and the like, and proof of source of such money.
(l) Whether the applicant holds a current pawnbrokers, secondhand goods merchant or precious metal dealers license from any other governmental unit.
(m) Whether the applicant has previously been denied a pawnbroker, secondhand goods merchant or precious metal dealers license from any other governmental agency.
(n) Whenever the application is for a premises either planned or under construction or undergoing substantial alteration, the application shall be accompanied by a set of preliminary plans showing the design of the proposed premises to be licensed. If the plans or design are on file with the City of Columbia Heights Building Inspection Department, no plans need be submitted with the issuing authority.
(o) The exact legal description of the premises to be licensed, together with a plot plan of the area for which the license is sought showing dimensions, location of buildings, and street access parking facilities.
(p) Such other information as the City Council or issuing authority may require.
(2) No person shall make any false statement in the application. In addition to other penalties, the license may be revoked by the City Council for giving false information on the application. By submitting an application, the applicant consents to any and all investigations the city deems appropriate and waives any claims the applicant may have. Copies of the application shall be submitted to such other city departments as the City Council shall deem necessary for the verification and investigation of the facts set forth in the application.
(F) License fees.
(1) At the time of each original application for a license, the applicant shall pay, in full, an investigation fee. The investigation fee shall be as specified by the City Council.
(2) The annual license fee shall be paid in full before the application for the license is accepted. Upon rejection of any application for a license or upon withdrawal of an application before approval of the issuance by the City Council, the license fee only shall be refunded to the applicant except where rejection is for a willful misstatement in the license application. If any investigation outside the State of Minnesota is required, the applicant shall be charged the cost which shall be paid by the applicant, prior to issuance of a license, after deducting the initial investigation fee, whether or not the license is granted.
(3) The annual license fee for renewal of a license shall be paid in full at the time the renewal application is filed with the city. An application for the renewal of an existing license shall be made to the Clerk at least 30 days prior to the expiration date of the license.
(4) All licenses issued under this section shall expire as of midnight on December 31 of the year of issuance. Each license shall be issued to the applicant only and shall not be transferable to another person or for another location.
(G) Bond required.
(1) At the time of filing an application for a license under this section, the applicant shall file a bond in the amount of $5,000 with the city. The bond shall be with a duly licensed surety company as surety thereon. Said bond must be conditioned that the licensee shall observe the ordinances of the city, in relation to the business of pawnbroker, secondhand merchant or precious metal dealer, and that the licensee will account for and deliver to any person legally entitled thereto any articles which may have come into the possession of the licensee as pawnbroker, and/or secondhand merchant, and/or precious metal dealer or in lieu thereof such licensee shall pay the person or persons the reasonable value thereof.
(2) Such bond shall be maintained so long as the licensee does business as such for the benefit of the city or any person who shall suffer any damage through the act of such licensee and shall not be terminated without the bond company giving written notice 30 days in advance of the termination date to the City License Clerk.
(H) Persons and locations ineligible for a license. No license under this section shall be granted to or held by any person who:
(1) Is a minor at the time the application is filed.
(2) Is not a citizen of the United States or a resident alien.
(3) Is not of good moral character or repute.
(4) Has had a pawnbroker, secondhand goods merchant, or precious metal dealer license revoked in the last five years.
(5) Has been convicted of a state or federal law relating to receiving stolen property, sale of stolen property or controlled substance, burglary, robbery, theft, damage or trespass to property, operation of a business, or any law or ordinance regulating the business of pawnbrokers, secondhand goods merchants or precious metal dealers.
(6) In the judgment of the City Council, is not the real party in interest or beneficial owner of the business operated, or to be operated, under the license.
(7) No license shall be granted for operation of any premises located in a residential district of the city. A pawnbroker license is allowed only in the General Business District of the city. All uses as described in this section shall comply with the zoning ordinance of the city.
(8) No license shall be granted or renewed for operation of any premises on which real estate taxes, assessments or other financial claims of the city or of the state are delinquent or unpaid.
(9) Holds an intoxicating liquor license under this code.
(I) Conditions of licenses.
(1) Records. Each licensee hereunder shall keep a record of each transaction at the time of receipt of an article deposited, left, sold, purchased, pledged or pawned. Said records shall be legible, made in ink and shall be in the English language. The records so kept shall include the following information about each transaction:
(a) The full legal name, address, telephone number, date of birth and a reasonably accurate description of the person from whom the item was received including, at a minimum, the sex, height, weight, race, color of eyes and hair.
(b) The time, date and place of transaction.
(c) An accurate description of the article, in English; any and all numbers written, stamped, impressed or engraved thereon; any identifying marks; any gems attached; and the name of the manufacturer and model if indicated on the article.
(d) The amount of money loaned upon or paid for the item or the purchase or consignment price.
(e) The identification number from one of the following forms of identification of the person from whom the item was received:
1. A valid Minnesota photo driver's license; or
2. A valid Minnesota photo identification card; or
3. A valid photo identification issued by the state of residency of the person from whom the item was received and one other form of identification.
(f) Any other information the Police Department may require or deem necessary.
(g) Date, mint, and condition of all coins.
(2) Disposition of articles. When any article is sold or disposed of by the licensee, the records shall contain an account of such sale with the date thereof, interest and charges accrued, the amount for which the article was sold and full legal name, current address and telephone number of the person to whom sold.
(3) Inspection of records. The records referred to in this section shall be open to the inspection of the Police Department at all reasonable times and shall be retained by the licensee for at least four years.
(4) Receipt. Every licensee shall deliver to the person pawning, pledging, selling, leaving or depositing any articles, a certificate numbered to correspond with the licensee's records. The certificate shall contain the substance of the record.
(5) Reports to Police Department. Every licensee shall prepare and deliver to the city, each day, in the manner and form prescribed by the city, a legible, correct and complete record of the hereinbefore required account of all personal property or other valuables received, deposited, purchased, pledged, pawned, sold or otherwise disposed of during the preceding day.
(6) Exceptions to reports. No licensee shall be required to furnish descriptions of any property purchased from manufacturers and wholesale dealers having an established place of business or of any goods purchased at an open sale from any bankrupt stock or from any other person doing business and having an established place of business. Any goods referred to in this section must be accompanied by a bill of sale or other evidence of open or legitimate purchase and must be shown to the Police Department when demanded.
(7) Redemption period.
(a) Any person pledging, pawning or depositing an article of property for security shall have a minimum of 120 days from the date when the loan or pledge becomes due and payable to redeem the article before the article becomes forfeitable.
(b) No article of property on deposit with any licensee nor property purchased by or sold to, or in any other way coming into possession and under the control of any licensee in the due course of business, shall be permitted to be redeemed from the place of business of the license, for a period of 72 hours, nor shall the property be sold within ten days, after the record required to be delivered to the city has been delivered.
(c) Whenever any police officer, acting in the course and scope of his duties, shall notify a licensee not to sell or permit to be redeemed any articles of property received on deposit or purchased by the licensee, the articles shall not be permitted to be redeemed or sold until such time as may be determined by the Police Chief or designee.
(8) Payment by check. Payment by licensee for any article deposited, left, purchased, pledged or pawned shall be made only by a check, draft or other negotiable or nonnegotiable instrument or order of withdrawal which is drawn against funds held by a financial institution.
(9) Posting of license. All licensees shall post their licenses, in a conspicuous place, in the licensed premises under the licensed activity.
(10) Responsibility of licensee. The conduct of agents or employees of a licensee, while engaged in performance of their duties for their principal or employer under such license, shall be deemed the conduct of the licensee.
(11) Penalty for property owner. It is unlawful for any person who owns or controls any real property to knowingly permit it to be used for pawnbroking without a license required by this section.
(J) Restricted transactions.
(1) No licensee shall be open for the transaction of business on any day of the week before 7:00 a.m. or after 10:00 p.m.
(2) No licensee shall purchase, accept or receive any article of property from any person under 18 years of age nor from intoxicated persons, nor those of unsound mind.
(3) No licensee shall purchase, accept or receive any article of property which contains an altered or obliterated serial number or any article of property whose serial number has been removed.
(4) No licensee under this section shall receive as a pledge, or purchase any revolver, pistol, blackjack or sawed-off shot gun and shall not display any such item for sale in the shop or the shop window.
(5) No licensee shall purchase, accept or receive any article of property knowing, or having reason to know, that the article of property is encumbered by a security interest. For the purpose of this section,
SECURITY INTEREST means an interest in property which secures payment or other performance of an obligation.
(6) No licensee shall purchase, accept or receive any article of property, from any person, knowing, or having reason to know, that said person is not the true and correct owner of the property.
(7) (a) No licensee shall purchase, accept or receive any article of property, from any person, without first having obtained one of the following forms of identification from the person:
1. A valid Minnesota photo driver's license; or
2. A valid Minnesota photo identification card.
3. A valid photo identification issued by the state of residency of the person from whom the item was received and one other form of identification.
(b) No other forms of identification shall be acceptable.
(K) Inspections.
(1) Stolen goods.
(a) Any licensee shall, at all times during the term of the license, allow any police officer to enter or inspect the premises, where the licensee is carrying on business, and all records pertinent to the operation of the business for the purpose of locating articles of property suspected or alleged to have been stolen. No licensee shall conceal any article in his possession from any police officer.
(b) Articles of property determined, upon investigation, to be stolen may be seized as evidence from the licensee by any police officer and returned to the rightful owner in accordance with the provisions of M.S. § 609.523, as it may be amended from time to time.
(c) No licensee may obstruct, hinder, or otherwise interfere with any police investigation concerning stolen articles of property discovered on the licensee's premises.
(d) A licensee must report to the Police Department any article of property pawned or received, or sought to be pawned or received, if the licensee has reason to believe that the article of property was stolen or lost.
(2) Inspection by claimed owner. All articles of property coming into the possession of any licensee, under the terms hereof, shall at all times be open to inspection and right of examination of any person claiming to have been the owner thereof or claiming to have had any interest therein when such person is accompanied by a police officer.
(L) Conduct of persons on licensed premises.
(1) No person may pawn, pledge, sell, leave, or deposit any article of property not their own; nor shall any persons pawn, pledge, sell, leave, or deposit the property of another, whether with permission or without; nor shall any person pawn, pledge, sell, leave, or deposit any article of property in which another has a security interest; with any licensee.
(2) No minor may pawn, pledge, sell, leave, or deposit any article of property with any licensee.
(3) No person may pawn, pledge, sell, leave, or deposit an article of property with a licensee without first presenting identification in the form of a Minnesota photo driver's license; a Minnesota photo identification card; or a photo identification issued by the state of residency of the person and one other form of identification to the licensee.
(4) All licensees shall, by adequate signage and separate written notice, inform persons seeking to pawn, pledge, sell, leave, or deposit articles of property with the licensee of the foregoing sections.
(a) For the purposes of this section,
ADEQUATE SIGNAGE shall be deemed to mean at least one sign, of not less than four square feet in surface area, comprised of lettering of not less than three-fourths of an inch in height, posted in a conspicuous place on the licensed premises and stating substantially the following:
TO PAWN OR SELL PROPERTY:
YOU MUST BE AT LEAST 18 YEARS OF AGE.
YOU MUST BE THE TRUE AND CORRECT OWNER OF THE PROPERTY. THE PROPERTY MUST BE FREE AND CLEAR OF ALL CLAIMS OR LIENS. YOU MUST PRESENT A PHOTO IDENTIFICATION.
VIOLATION OF ANY OF THESE REQUIREMENTS IS A CRIME.
(b) For the purposes of this section,
SEPARATE WRITTEN NOTICE shall be deemed to mean the certificate, hereinbefore required to be delivered to the person pawning, pledging, selling, leaving, or depositing an article of property with a licensee; incorporating a statement to the effect that the person pawning, pledging, selling, leaving, or depositing the article is at least 18 years of age; is the true owner of the article; and that the article is free and clear of all claims and liens; and requiring a signature of acknowledgment by the person pawning, pledging, selling, leaving, or depositing the article as to the statement.
(5) No person seeking to pawn, pledge, sell, leave, or deposit any article of property with a 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 drivers license or identification card; to any licensee.
(M) Corporations, partnerships or associations.
(1) Licenses issued to corporations shall be valid as long as there is no change in the officers or ownership interest of the corporation unless such change is approved by the City Council, in which event said license shall continue in force until the end of the then current license year. Failure to report any change in stockholders, officers, or managers shall be grounds for the revocation of all licenses held by the corporation. Every corporation licensed under the provisions of this section shall adopt and maintain in its by-laws a provision that no transfer of stock is valid or effective unless approved by the City Council and shall require that all of its certificates of stock shall have printed on the face thereof: “The transfer of this stock certificate is invalid unless approved by the City Council for the City of Columbia Heights, Minnesota,” and failure to comply with this provision shall be grounds for the revocation of all licenses held by the corporation. The provisions of this section shall not apply to the issuance of any license to a corporation whose stock is traded on a public stock exchange.
(2) Licenses issued to associations or partnerships shall be valid only as long as there is no change in the partnership or association agreement or in the ownership of said partnership or association unless such change is approved by the City Council, in which event said license shall continue in force until the end of the then current license year.
(3) Corporations, partnerships or associations shall submit written notice to the city of any such changes described herein on or before 30 days prior to the effective date of any such change. In case of a corporation, the licensee shall submit written notice to the city when a person not listed in the initial application will be acquiring an interest and shall give all information about said person as is required of a person pursuant to the provisions of this section.
(N) Denials, suspensions or revocations.
(1) It is unlawful for any applicant to make a false statement or omission upon any application form. Any false statement in such application, or any omission to state any information called for on such application form, shall upon discovery of such falsehood, work an automatic refusal of license, or if already issued, shall render any license issued pursuant thereto void. Prior issuance is no effect to protect the applicant from prosecution for violation of this section or any part thereof.
(2) The City Council may suspend or revoke a license issued under this section for operation on any premises on which real estate taxes, assessments or other financial claims of the city or of the state are delinquent, or unpaid.
(3) The City Council may suspend or revoke a license issued under this section upon a finding of a violation of any of the provisions of this section or any state statute regulating pawnbrokers. Any conviction by the pawnbroker for theft, receiving stolen property or any other crime or violation involving stolen property, damage to or trespass of property, sale of a controlled substance, or the operation of a business committed by the applicant or any employee or agent of the applicant shall result in the immediate suspension pending a hearing on revocation of any license issued hereunder.
(4) Except in the case of a suspension pending a hearing on revocation, a revocation or suspension of a license by the City Council shall be preceded by a public hearing. The hearing notice shall be given at least ten days prior to the hearing, include notice of the time and place of the hearing, and shall state the nature of the charges against the licensee.
(O) Penalties. Violation of any provision of this section shall be a misdemeanor and, upon conviction thereof, shall be punished according to prevailing state laws.
(`77 Code, §§ 5.204, 5.205, 5.611) (Am. Ord. 1377, passed 10-12-98)