(A) Definitions. For the purpose of this section, the following definitions apply unless the context clearly indicates or requires a different meaning.
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.
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 chapter shall be applicable. This definition shall exclude bondsmen and brokers.
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:
(a) 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 the merchandise; provided, the pawnbroker must maintain a record of the purchase or consignment which describes each item, and must mark each item in a manner which relates it to that transaction record; and
(b) Retail and wholesale sales of merchandise originally received by pawn or purchase, and for which all applicable hold and/or redemption periods have expired.
(B) License fees.
(1) The annual license fees for licenses issued under this chapter shall be $1 per transaction payable to the city to be forwarded to the state for the use of their program. No other fees shall be charged for one year after which the City Council shall review the ordinance and make a determination as to the appropriate payment.
(2) The billable transaction license fee shall reflect the cost of processing transactions and other related regulatory expenses as determine by the City Council, and shall be reviewed and adjusted, if necessary, annually. Licensees shall be notified in writing 30 days before any adjustment is implemented.
(3) Billable transaction fees shall be billed monthly and are due and payable within 30 days. Failure to do so is a violation of this section.
(C) Application required. The requirements detailed here are intended to provide licensing authorities adequate information to make a good decision regarding the applicant(s):
(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 M.S. § 333.01, as it may be amended from time to time;
(e) The 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 proceeding five 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; and
(i) 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 divisions (C)(1)(a) through (C)(1)(h) above.
(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 division (C)(1) above;
(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 M.S. § 333.01, as it may be amended from time to time, a certified copy of such certificate must be attached to the application; and
(d) 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 divisions (C)(2)(a) through (C)(2)(j) above.
(3) If the applicant is a corporation or other organization:
(a) The name of the corporation or business firm 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 M.S. § 303.06, as it may be amended from time to time, 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 divisions (C)(1)(a) through (C)(1)(h) above; and
(d) A list of all persons who control or own an interest in excess of 5% in such organization or business from or who are officers of the corporation or business firm and all information concerning the persons required in division (C)(1) above. This division (C)(3)(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 second- hand 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 second-hand 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; and
(h) Other information as the City Council or issuing authority may require.
(D) 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 14 days. The application must include all appropriate information required in this section. 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 section.
(E) 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 the 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.
(F) 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 Department evidence as the inspector may reasonably require in support of the statements set forth in the application.
(G) 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.
(H) Persons ineligible for a license. No licenses under this section will be issued to an applicant who is a natural person, a partnership if the applicant has any general partner or managing partner, a corporation or other organization if the 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 M.S. § 364.03, subd. 2, as it may be amended from time to time, 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 M.S. § 364.03, subd. 3, as it may be amended from time to time; or
(3) Is not of good moral character or repute.
(I) Bond required.
(1) Before a license will be issued, every applicant must submit a $1,000 bond on the forms provided by the licensing authority.
(2) 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.
(3) 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 licensing authority.
(J) 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:
(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 therefor;
(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; and
(c) Current valid photo identification card issued by another state, province of Canada or foreign country.
(7) The signature of the person identified in the transaction;
(8) (a) Effective 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:
1. Each customer involved in a billable transaction; and
2. Every item pawned or sold that does not have a unique serial or identification number permanently engraved or affixed.
(b) If a photograph is taken, it must be at least two inches in length by two inches in width and must be maintained in a manner that the photograph can be readily matched and correlated with all other records of the transaction to which they relate. The photographs must be available to the Public Safety Director, or the Public Safety Director’s 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 in the premises. If a video photograph is taken, the video camera must focus on the person paying or selling the item so as to include an identifiable image 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.
(9) Digitized photographs. Effective 60 days from the date of notification by the Police Department licensees must fulfill the color photograph requirements in division (J)(8) above 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 division (J)(8) above.
(K) Renewals, extensions, redemptions and confiscations. 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.
(L) 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 years from the date of transaction. Entries of required digital images shall be retained a minimum of 90 days.
(M) Daily reports to police.
(1) General. Effective no later than 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 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.
(2) Billable transaction fees. Licensees will be charged for each billable transaction reported to the Police Department.
(a) If a licensee is unable to successfully transfer the required reports by modem, 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.
(b) If the problem is determined to be outside the licensee’s system, the licensee must continue to provide the required reports in division (M)(2)(a) above and resubmit all transactions via modem when the error is corrected.
(c) If a licensee is unable to capture, digitize or transmit the photographs required in division (J) above, 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.
(d) 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.
(e) Divisions (M)(2)(a) through (M)(2)(c) above notwithstanding, the Police Department may, upon presentation of extenuating circumstances, delay the implementation of the daily reporting penalty.
(N) 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:
(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; and
(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; and
(13) All printed statements as required by M.S. § 325J.04, subd. 2, as it may be amended from time to time, or any other applicable statutes.
(O) Redemption period. (M.S. Ch. 325J, as it may be amended from time to time, allows communities to set minimum redemption period at no less than 60 days. Ninety days is more common). Any person pledging, pawning or depositing an item for security must have a minimum of 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 may not be removed from the licensed location, except as provided in division (V) below. Licensees are prohibited from redeeming any item to anyone other than the period 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 Public Safety Director, or the Public Safety Director’s designee. Written authorization for release of property to persons other than original pledger must be maintained along with original transaction record in accordance with division (J) above.
(P) Victims to report their loss and law enforcement to make comparisons. Any item purchased or accepted in trade by a licensee must not be sold or otherwise transferred for seven days from the date of the transaction. An individual may redeem an item 72 hours after the item was received on deposit, excluding Sundays and legal holidays.
(Q) Police order to hold property.
(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 investigate 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 division (Q)(2) below, whichever comes first.
(2) Order to hold. Whenever the Public Safety Director, or the Public Safety Director’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 Public Safety Director or the Public Safety Director’s designee. The order to hold shall expire 90 days from the date it is placed unless the Public Safety Director or the Public Safety Director’s designee determines the hold is still necessary and notifies the licensee in writing.
(3) Order to confiscate.
(a) If an item is identified as stolen or evidence in a criminal case, the Public Safety Director, or the Public Safety Director’s designee, may:
1. Physically confiscate and remove it from the shop, pursuant to a written order from the Public Safety Director or the Public Safety Director’s designee; or
2. Place the item on hold or extend the hold as provided in division (Q)(2) above and leave it in the shop.
(b) 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.
(c) When an order to hold/confiscate is no longer necessary, the Public Safety Director, or the Public Safety Director’s designee, shall so notify the licensee.
(R) 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 division (V) below, during normal business hours, except in an emergency, for the purpose of inspecting the premises and inspecting items, ware and merchandise and records therein to verify compliance with this section or other applicable laws.
(S) 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 reused.
(T) Prohibited acts.
(1) 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.
(2) No licensee may receive any goods from a person of unsound mind or an intoxicated person.
(3) 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) 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) No person may pawn, pledge, sell, consign, leave or deposit any article of property not his or her own; nor shall any person pawn, pledge, sell, consign, lease 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.
(6) 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.
(U) Denial, suspension or revocation. Any license under this chapter 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 provision of this code of ordinances or state law;
(3) The applicant or licensee has failed to comply with one or more provisions of this section;
(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 years, of any law relating to theft, damage or trespass to property, sale of a controlled substance or operation of a business; and
(8) The owner of the premises licensed or to be licensed would not qualify for a license under the terms of this section.
(V) Business at only one place. 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 Public Safety Director, or the Public Safety Director’s designee, may approve an off-site locked and secured storage facility. The licensee shall permit inspection of the facility in accordance with division (R) above. All provisions of this section regarding recordkeeping and reporting apply to the facility and its contents. Property shall be stored in compliance with all provisions of the city code.
(W) Separability. Should any division, clause or other provision of this section be declared by a court of competent jurisdiction to be invalid, the decision shall not affect the validity of the section as a whole or any part other than the part so declared invalid.
(Adopted 5-23-2006; effective 9-1-2006)