A. Licensing Required: It is unlawful for any person to engage in the business of pawnbroker/consignment shop without first having obtained a license therefor from the City.
B. Business Location: A license under this section 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 chief or his/her designee, may approve an off site locked and secured storage facility. The licensee shall permit inspection of the facility in accordance with this section. All provisions of this section regarding record keeping and reporting apply to the facility and its contents. Property shall be stored in compliance with all provisions in this 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 that extends for more than six (6) months.
C. License Fees: The annual license fees for license issued under this section shall be set by city council resolution.
1. Billable Transaction License Fee: 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, annually. Licensees shall be notified in writing thirty (30) days before any adjustment is implemented. These fees will be set by resolution.
2. Monthly Billing: 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 chapter.
D. Application:
1. New Applicant: Every new applicant must provide all the following information:
a. If the applicant is a natural person.
b. The name, place and date of birth, street resident address, phone number of applicant.
c. Whether the applicant is a citizen of the United States or resident alien.
d. Whether the applicant has ever 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.
e. 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.
f. The street address at which the applicant has lived during the preceding five (5) years.
g. The type, name and location of every business or occupation in which the applicant has been engaged during the last five (5) years and the name and address of the applicant's employer and partner, if any, in the preceding five (5) years.
h. 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.
i. The physical description of the applicant.
j. 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 the application.
k. If the applicant does not manage the business, the name of the manger or other person in charge of the business and all the information concerning each of them is required as outlined in subsections D1a through D1i of this section.
2. Partnership: Every new partnership must provide all the following information:
a. The names and addresses of all general and limited partners, and all information concerning each general partner in subsection D1a of this section.
b. The name of the managing partner and the interest of each partner in the licensed business.
c. A true copy of partnership agreement shall be submitted with the application. If the partnership is required to file a certificate as to 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 or other person in charge of the business and all information concerning each of them is required in subsections D1a through D1i of this section.
3. Corporation Or Other Organization: If the applicant is a corporation or other organization, the following information must be provided:
a. The name of the corporation or business firm, and if incorporated, the state of incorporation.
b. True copy of the certificate of incorporation, articles of incorporation or association agreement and bylaws 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 or other person in charge of the business and all information concerning each manager, proprietor, or agent required in subsections D1a through D1i of this section.
d. A list of all such persons who control or own an interest in excess of five percent (5%) in such organization or business firm who are officers of the corporation or business firm, and all information concerning said persons required in subsection D1 of this section, except the requirements of subsection D1e of this section 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. All Applicants: All applicants must provide all the following information:
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 leased.
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 the premises either planned or under construction or undergoing substantial alteration, the applicant 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.
5. New Manager: When a licensee places a manager in charge of a business, or if the name of the manager in charge of a licensed business changes, the licensee must complete and submit the appropriate application within fourteen (14) days. The application must include all appropriate information required in this section:
a. Cost Of Investigation: Upon completion of an investigation of a new manager, the licensee must pay an amount equal to the cost of the investigation to assure compliance with this chapter. If the investigation process is conducted solely within the state, the fee shall be five hundred dollars ($500.00). If the investigation is conducted outside the state, the issuing authority may recover the actual investigation costs not exceeding ten thousand dollars ($10,000.00).
6. Application Execution: All applicants 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.
7. Investigation: The police department must investigate into the truthfulness of statements set forth in the application and shall endorse the findings thereon. The applicant must furnish to the police department such evidence as the inspector may reasonably require in support of the statements set forth in the application.
8. Public Hearing: The council may request a public hearing.
9. Person Ineligible For License: No license under this section shall be issued to an applicant who is a natural person; a partnership, if such application 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; or if the applicant:
a. Is a minor at the time that the application is filed;
b. Has been convicted of a crime directly related to the occupation licensed as prescribed by Minnesota statues section 364.03, subdivision 2, 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 section 364.03, subdivision 3; or
c. Is not of good moral character or repute.
E. Requirements:
1. Bond Required: Before a license will be issued, every applicant must submit five thousand dollars ($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.
2. Records Required: At the time of any reportable transaction, other than renewals, extensions, redemptions or confiscations, 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:
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 therefor.
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 records.
e. Full name, current 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.
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. Effective sixty (60) days from the date of notification by the police department of acceptable video standards, license must also take a digital color photograph or digital 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 identification number permanently engraved or affixed.
If a photograph is taken, it must be at least two inches (2") in length by two inches (2") 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 police chief or his/her designee, upon request. The major portion of the photograph must include an identifiable facial image 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 digital photo is taken, the digital video camera must focus on the person pawning or selling the item so as to include an identifiable image of that person's face. Items photographed by digital video must be accurately depicted. Digital video photographs must be electronically referenced by time and date so they can be readily matched or correlated with all other records of the transaction to which they relate. The licensee must inform the person he or she is being videotaped by displaying a sign of sufficient size n a conspicuous place on the premises. The license must keep the digital recordings for six (6) months.
i. For renewals, extensions, redemptions and confiscations, the licensee shall provide the original transaction identifier, the date of the current transaction, and the type of transaction.
j. 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 the transaction. Entries of required digital images shall be retained a minimum of ninety (90) days.
3. 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 (3) 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 full name, current residence address, current phone number and date of birth of the pledger or seller.
i. 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 province of Canada.
j. Description of the pledger or seller, including sex, approximate height, weight, race, color of eyes and color of hair.
k. The signature of the pledger or seller.
l. All printed statements as required by Minnesota statutes section 325J.04, subdivision 2, or any other applicable statutes.
F. Daily Reports To Police Department:
1. Automated Pawn System: 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 police department daily in the following manner:
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 the 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. 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.
2. Billable Transaction Fees: Licensees will be charged for each billable transaction reported to the police department.
a. If licensee is unable to successfully transfer the reports by modem, the licensee must provide the police department, upon request, printed copies of all reportable transactions along with the videotapes for that date, by twelve o'clock (12:00) noon the next business day.
b. If the problem is determined to be 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 subsection F2a of this section, and shall be charged a twenty five dollar ($25.00) reporting failure penalty, daily, until the error is corrected.
c. If the problem is determined to be outside the licensees system, the licensee must continue to provide the required reports as detailed in subsection F2a of this section, and resubmit all such transactions via modem when the error is corrected.
d. If licensee is unable to capture, digitize or transmit the photographs required in subsection E2h of this section, 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. This would be in the event that the required digital system has failed and must be approved by the chief.
e. 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 day the problem had existed.
f. Notwithstanding subsections F2a through c of this section, the police department may, upon presentation of extenuating circumstances, delay the implementation of the daily reporting penalty.
G. Redemption And Holding Period:
1. Redemption Period: Any person pledging, pawning or depositing an item for security must have a minimum of sixty (60) days from the date of that transaction to redeem the item before it may be forfeited and sold. During the sixty (60) day holding period, items may not be removed from the licensed location, except as provided in subsection E2j of this section.
2. Holding Period: Any item purchased or accepted in a 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.
H. Hold, Confiscation And Inspection:
1. 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 has been canceled, or until an order to hold/confiscate is issued, pursuant to subsection H2 of this section, whichever comes first.
2. Order To Hold: Whenever the chief of police, or his/her 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, or his/her designee. The order to hold shall expire ninety (90) days from the date it is placed, unless the police chief or his/her designee determines the hold is still necessary and notifies the licensee in writing.
3. Order To Confiscate: If any item is identified as stolen or evidence in a criminal case, the chief or his/her designee may:
a. Physically confiscate and remove it from the shop, pursuant to a written order from the chief or the chief's designee; or
b. Place the item on hold or extend the hold as provided in subsection H2 of this section 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 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 police chief or his/her designee shall so notify the licensee.
4. 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 subsection B of this section, during normal business hours, except in an emergency, for the purpose of inspecting such premises and inspecting items, wares and merchandise, and records therein, to verify compliance with this section and other applicable laws.
I. Prohibited Acts:
1. Underage: 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.
2. Unsound Mind Or Intoxicated: No licensee may receive any goods from a person of unsound mind or an intoxicated person.
3. Identification Of Seller: 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.
4. Altered Identification: 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.
5. Property Of Another: 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 a licensee.
6. False Or Fictitious Identification: No person seeking to pawn, pledge, sell, consign, 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 or altered identification, or the identification of another, to a licensee.
J. Denial, Suspension Or Revocation: Any license under this section may be denied, suspended or revoked for one or more of the following reasons:
1. Zoning: The proposed use does not comply with the any applicable zoning code.
2. Health, Building And Maintenance Codes: The proposed use does not comply with any health, building, building maintenance or other provisions of this code or state law.
3. Violation Of City Code: The applicant or licensee has failed to comply with one or more provisions of this chapter or this code.
4. Noncitizens: 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 unavailability of information.
5. Fraud Misrepresentation Or Bribery: Fraud, misrepresentation or bribery in securing or renewing a license.
6. Fraud, Misrepresentation Or False Statements: Fraud, misrepresentation or false statements made in the application and investigation for, or in the course of, the applicant's business.
7. Theft, Damage Or Trespass To Property, Sale Of Control Substances Or Illegal Business: 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 an illegal business.
8. The owner of the premises licensed or to be licensed would not qualify for a license under the terms of this section.
K. Secondhand Clothing Sales: This section shall not apply to those individuals engaged primarily in the business of selling secondhand clothes.
(1976 Code; amd. 1992 Code; Ord. 136, 5th Series, eff. 2-26-2007; Ord. 45, 7th Series, 12-18-2023)