HomeMy WebLinkAbout03 - Amending Chapter 5.20 of the NBMC Entitled Pawnbrokers, Secondhand Dealers and Junk DealersJuly 26, 2016
Agenda Item No. 3
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Jon Lewis, Chief of Police - 949-644-3701, jlewis@nbpd.org
PREPARED BY: Jay Short, Lieutenant
PHONE: 949-644-3778, jshort@nbpd.org
TITLE: Adoption of Ordinance No. 2016-10 Amending Chapter 5.20 of the
NBMC Entitled Pawnbrokers, Secondhand Dealers and Junk
Dealers
ABSTRACT:
Approval of the second reading and adoption of Ordinance No. 2016-10 Amending
Newport Beach Municipal Code Chapter 5.20.
RECOMMENDATION:
a) Determine that the action is exempt from the California Environmental Quality Act
(CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines
because it will not result in a physical change to the environment, directly or
indirectly; and
b) Conduct second reading and adopt Ordinance No. 2016-10, An Ordinance of the
City Council of the City of Newport Beach Amending Chapter 5.20 of the NBMC
entitled Pawnbrokers, Secondhand Dealers, and Junk Dealers.
FUNDING REQUIREMENTS:
There is no fiscal impact related to this item.
DISCUSSION:
On July 12, 2016, the City Council introduced and passed to second reading Ordinance
No. 2016-10, which approved the amendment to Chapter 5.20 of the NBMC. The
Ordinance outlines the general requirements for pawnbrokers, secondhand dealers and
junk dealers in the City, and eliminates outdated requirements and reflects the new
requirements found in recently adopted State legislative provisions.
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Adoption of Ordinance No. 2016-10 Amending Chapter 5.20 of the NBMC Entitled
Pawnbrokers, Secondhand Dealers and Junk Dealers
July 26, 2016
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ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
klei IEel l►Its
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A - Ordinance No. 2016-10
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ATTACHMENT A
ORDINANCE NO. 2016 -
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF NEWPORT BEACH, CALIFORNIA,
AMENDING NEWPORT BEACH MUNICIPAL CODE
CHAPTER 5.20 ENTITLED "PAWNBROKERS,
SECONDHAND DEALERS AND JUNK DEALERS"
WHEREAS, California Business and Professions Code Section 21625 reflects
the intent of the California Legislature to regulate pawnbrokers and secondhand dealers
"to curtail the dissemination of stolen property and to facilitate the recovery of stolen
property by means of a uniform, statewide, state -administered program of regulations of
persons whose principal business is the buying, selling, trading, auctioning, or taking in
pawn of tangible property and to aid the State Board of Equalization to detect possible
sales -tax -evasion.": -an
WHEREAS, California Business and Professions Code Section 21638 provides
that the City of Newport Beach ("City") may enact regulations of secondhand dealers
and pawnbrokers that are not inconsistent with California Business and Professions
Code Section 21625 et seq.; and
WHEREAS, California Financial Code Section 21300 establishes terms and
conditions governing how the City's Chief of Police processes requests for licenses to
engage in the business of pawnbroker; and
WHEREAS, California Business and Professions Code Section 21600 et seq.
regulates junk dealers; and
WHEREAS, the California Court of Appeals in Malish v. City of San Diego (2000)
84 Cal.AppAth 725 upheld local regulations of pawnbrokers and other secondhand
dealers stating that such regulations are only preempted by state law to the extent they
exceed the scope of local regulation permitted by California Business and Professions
Code Section 21625 et seq. In Malish, the court upheld local regulations providing for
local permits, reasonable police inspection of a pawnbroker's business during normal
business hours, grounds for denial of a local permit, and recording and inspection of all
loans because all such regulations do not conflict with state law and are not preempted;
and
WHEREAS, in 2012, the California Legislature adopted Assembly Bill No. 391
(Pan) ("AB 391") to: (1) update the transaction reporting requirements for pawnbrokers
and secondhand dealers to the State of California Department of Justice ("DOJ")
pursuant to a single, statewide, uniform electronic reporting system to be implemented
by the State of California ("California Pawn & Secondhand Dealer System" or "CAPSS");
(2) require the DOJ to charge a licensure fee and renewal fee for pawnbrokers and
secondhand dealers; (3) require the DOJ to charge existing pawnbrokers and
secondhand dealers an additional fee for the purpose of funding, implementing,
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operating, and maintaining CAPES; and (4) require applicants for a licensure to submit
fingerprint images relative to a required criminal background check with associated fee;
and
WHEREAS, the DOJ began implementation of CAPSS in December 2014 and
since that time has been working to phase-in improvements to optimize the functionality
of CAPSS; and
WHEREAS, given these newly implemented state law requirements of
pawnbrokers and secondhand dealers promulgated by AB 391 and the changes to the
new reporting requirements through CAPSS, the City has updated its regulations of
pawnbrokers and secondhand dealers codified in Newport Beach Municipal Code
Chapter 5.20. The City has also updated its regulations of junk dealers, which are also
codified in Newport Beach Municipal Code Chapter 5.20; and
WHEREAS, the intent of this Ordinance is to update the_ City's_ regulations of
pawnbrokers, secondhand dealers, and junk dealers to implement the Legislature's
updates to state law in light of modern police practices. By adopting this Ordinance, it is
the intent of the City Council of the City of Newport Beach to adopt regulations of
pawnbrokers, secondhand dealers, and junk dealers that are not inconsistent with state
law.
NOW THEREFORE, the City Council of the City of Newport Beach does ordain
as follows:
Section 1. The City Council of the City of Newport Beach hereby finds that the
above recitals are true and correct and are incorporated into the substantive portion of
this ordinance.
Section 2: The City Council hereby deletes Chapter 5.20 of the Newport Beach
Municipal Code entitled "Pawnbrokers, Secondhand Dealers, and Junk Dealers" in its
entirety and replaces it with the following:
Chapter 5.20
PAWNBROKERS, SECONDHAND DEALERS AND JUNK
DEALERS
Sections:
5.20.010
Pawnbroker Defined.
5.20.020
Pawnshop Defined.
5.20.030
Secondhand Dealer Defined.
5.20.040
Junk Dealer Defined.
5.20.050
Permits/Licenses.
5.20.060
Permit/License Fees.
5.20.070
Reporting of Transactions.
5.20.080
Records Required to be Kept.
5.20.090
Failure to Comply Unlawful.
5.20.100
Disposition of Articles.
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5.20.110 Reserved,
5.20.120 Hours of Operation.
5.20.130 Property Received from Outside State.
5.20.140 Application of Reports and Records Provisions to Other
Merchants Selling Secondhand Articles.
5.20.010 Pawnbroker Defined.
The term "pawnbroker" shall have the same meaning as that term
is defined in California Financial Code Section 21000 or any
successor statute thereto.
5.20.020, Pawnshbp-Defffied.
The term "pawnshop" means any room, store, or place in which the
business or activity described in Section 5.20.010 is engaged in,
carried on, or conducted.
5.20.030 Secondhand Dealer Defined.
The term "secondhand dealer" shall have the same meaning as
that term is defined and limited in California Business and
Professions Code Sections 21626 and 21626.5 or any successor
statutes thereto. Any person or entity exempt from being
considered a "secondhand dealer" pursuant to California Business
and Professions Code Section 21625 of seq. or successor statutes
thereto shall also be exempt from being considered a "secondhand
dealer" by this Chapter.
5.20.040 Junk Dealer Defined.
The term "junk dealer" shall have the same meaning as that term is
defined in California Business and Professions Code Section 21601
or any successor statute thereto.
5.20.050 Permits/Licenses.
A. Requirement. No person shall engage in, conduct, manage
or carry on the business of a pawnbroker, junk dealer or
secondhand dealer, or deal in secondhand merchandise either as a
business or as a part of any other business without first applying for
and receiving a permit or license (hereinafter referred to as
"permit") therefor from the Chief of Police.
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B. Application Form. The form on which application shall be
made for a permit hereto or renewal thereof shall require, at
minimum, the following information:
1. Name of the applicant and complete physical
description of him or her;
2. Residence and business address of the applicant;
3. A statement as to whether or not the applicant holds
or has held any pawnbroker and/or secondhand dealer
permit from any State, municipality, governing body or
licensing authority; a list of such permits and a statement of
the time, place and by whom issued; a statement as to
whether any State, municipality, governing body or licensing
authority - has- .ever- -refused -to-issue-or. to renew a -permit to - -
the applicant and if so, a full and accurate statement as to
the reasons for any such refusal; a statement as to whether
any State, municipality, governing body or licensing authority
has ever revoked a permit held by the applicant and if so, a
full and accurate statement as to the reasons for any such
revocation;
4. A statement as to whether or not the applicant has
ever been arrested for any crime, misdemeanor or criminal
violation of any municipal ordinance and if so, the nature of
the offense and the punishment or penalty assessed
therefor, if convicted; and
5. Applicant shall submit to being fingerprinted, except
that this requirement is waived with respect to an application
for renewal of a permit where a person has made a previous
application under this chapter and has complied with this
requirement.
C. Investigation. The Chief of Police or his or her designee shall
cause to be made such investigation of the applicant's application
for compliance with this Chapter and any applicable State
regulation.
D. Report of Investigation. The Chief of Police or his or her
designee shall complete his or her investigation herein provided for
and shall make a written report within ninety (90) that certifies
whether or not the requirements of this Chapter have been
satisfied.
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E. Multiple Businesses. If any person, firm or corporation shall
engage in, conduct, manage or carry on, at the same time, more
than one of the businesses defined and referred to in this chapter,
such person shall be deemed to be engaged in conducting,
managing and carrying on such business separate and apart from
the other such business and such person, firm or corporation shall
comply in all respects with the provisions of this chapter relating to
each such business, and no person shall fail, refuse or neglect to
do so.
F. Revocation or Refusal.
A permit applied for hereunder may be refused by the Chief of
Police or his or her designee if the Chief of Police or designee
determines that the applicant has been convicted of an attempt to
_receive—stolen. -property .-or_._-any--oth.er_. offense --involvingstolen ---- -----
property or that the permit holder engaged in any act which the
permit holder knows to be in violation of this Chapter and such
violation demonstrates a pattern of conduct. For the purposes of
this section, "convicted" means a plea or verdict of guilty or a
conviction following a plea of nolo contendere.
A permit issued hereunder may be revoked by the Chief of Police
or an application for renewal of such permit may be refused by the
Chief of Police and the permit holder's activities pursuant to the
permit may be prohibited if the Chief of Police determines after
notice and hearing:
I. That the business was not carried on only at the
location designated on the permit. The permit will designate
all locations where property belonging to the business is
stored. Property of the business may be stored at locations
not designated on the permit only with the written consent of
the City; or
2. That the permit or a copy thereof, issued by the
Newport Beach Police Department, was not displayed on the
premises in plain view of the public; or
3. That the permit holder engaged in any act which the
permit holder knows to be in violation of this Chapter and
such violation demonstrates a pattern of conduct; or
4. That the applicant has been convicted of an attempt
to receive stolen property or any other offense involving
stolen property. For the purposes of this section, "convicted"
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means a plea or verdict of guilty or a conviction following a
plea of nolo contendere. The Chief of Police may revoke or
refuse renewal of such permit when the time for appeal of
the conviction has elapsed, or the judgment of conviction
has been affirmed on appeal, or when an order granting
probation is made suspending the imposition of sentence,
irrespective of a subsequent order under the provisions of
Section 1203.4 of the California Penal Code or any
successor statute thereto; or
5. That the permit holder has not fully and truthfully filed
a renewal application and paid the permit renewal fee
specified by the City.
G. Appeal. Any person aggrieved by the action of the Chief of
__ _ Police in the denial -of -an- application for permit _or_r_enewal__of_permit
.
as provided heretofore, shall have the right of appeal to the City
Manager or his or her designee. Such appeal shall be taken by
filing with the City Manager within fourteen (14) days of the
postmark date of the Chief of Police or designee's notice of denial
sent to the person's last known address, a written statement setting
forth fully the grounds for appeal. The appeal shall set forth the
particular condition and the reasons that the applicant believes the
findings or decision is in error. The City Manager or designee shall
set a time and place for a hearing of such appeal and notice of
such hearing shall be given to the appellant in the same manner as
provided in subsection (H) of this section for notice of hearing on
revocation. The decision of the City Manager on such appeal shall
be final and conclusive.
H. Notice of Hearing. Notice of the hearing provided for shall be
given in writing to the applicant or permit holder, as the case may
be. Such notice shall be mailed, postage prepaid, to the applicant
or permit holder, as the case may be, at his or her last known
address at least five days prior to the date set for hearing. The
applicant or permit holder, as the case may be, shall have the right
to be represented at such hearing by counsel.
5.20.060 Permit/License Fees.
Every person or entity applying to conduct or carry on the business
of a pawnbroker, junk dealer or secondhand dealer, as a separate
business, shall pay an initial license application fee to the City not
to exceed the actual costs incurred to process the application as
that fee is established by resolution of the City Council from time to
time. In addition, the City shall collect from every person or entity
applying to carry on the business of pawnbroker, junk dealer, or
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secondhand dealer, as a separate business the fee charged by the
Department of Justice for its processing of the application. The City
shall transmit the fee charged by the Department of Justice to the
Department of Justice.
Every person or entity conducting or carrying on the business of a
pawnbroker, junk dealer or secondhand dealer, as a separate
business, shall pay to the City a renewal fee as that fee is
established by resolution of the City Council from time to time each
time every such person or entity applies for renewal. of such
license. The fee shall not exceed the actual costs incurred to
process the renewal application. In addition, the City shall collect
from every person or entity seeking renewal of such license the fee
charged by the Department of Justice for its processing of the
renewal application. The City shall transmit the fee charged by the
—Department of iustice_to_th.e_Department of-J.ustice._ - - _
Every person dealing in secondhand merchandise in connection
with and incidental to any other business, shall pay the license fee
required by the laws of the City of Newport Beach for said other
business plus an additional fee as established by resolution of the
City Council.
6.20.070 Reporting of Transactions.
A. Reporting Requirement for Pawnbrokers and Secondhand
Dealers. Every pawnbroker and secondhand dealer shall make out
and submit a full, true and complete report of pawnbroker and
secondhand dealer transactions, the form and contents of which
shall comply with the provisions of California Business and
Professions Code Sections 21628, 21628.2, 21630, 21631, and
21633 and any successor statutes thereto.
B. Confidentiality. The Chief of Police shall cause all reports
received pursuant to the terms of subsection (A) to be filed in a
secure place, and the same shall be open to inspection only by
members of the Police Department, upon order of a court of
competent jurisdiction, or as otherwise required by law.
C. Reporting Requirement for Junk Dealers. Every junk dealer
shall make out and deliver to the Police Department, a full, true and
complete report the form and contents of which shall comply with
California Business and Professions Code Section 29606 or any
successor statute thereto on the form prescribed by the Department
of Justice, including Form BCIA 927 "Record of Junk Sale or
Purchase" or any successor form thereto.
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5.20.080 Records Required to be Dept.
Unless federal or state law requires a shorter time period, every
pawnbroker and secondhand dealer shall keep, for a period of
three years, a complete record in the English language of all goods,
wares, merchandise or things pledged to or purchased or received
by him, which record shall contain all of the matters required to be
shown in the reports referred to and described in Section 5.20.070
or this chapter. Every such record and all goods, wares,
merchandise and things pledged to or purchased or received by
any such secondhand dealer shall be open at all times during
business hours to the inspection of the Chief of Police or any police
officer of the City of Newport Beach. Every junk dealer shall
comply with the records preservation requirements of California
Business and Professions Code Section 21607 or any successor
statute thereto.
5.20.090 Failure to Comply Unlawful.
No person engaged in conducting, managing or carrying on the
business of a pawnbroker, secondhand dealer, or junk dealer, nor
any agent or employee of any such person, shall fail, refuse or
neglect to file any report or keep any record in the form, in the
manner, at the time and in all respects in accordance with the
requirements of this chapter, or fail, refuse or neglect to exhibit to
the Chief of Police or any police officer of the City of Newport
Beach, immediately upon demand for the privilege of such
inspection, any such record or any goods, wares or merchandise or
things pledged to or purchased or received by such person.
5.20.100 Disposition of Articles.
A. No pawnbroker or secondhand dealer shall sell or otherwise
dispose of any article, merchandise or thing required to be reported
per Section 5.20.070 of this Code within thirty (30) days after the
same has been received or purchased, nor fail to keep such article,
merchandise or thing unaltered, as pledged or purchased, in lots
separate and apart from other articles, merchandise or things in the
place of business of such pawnbroker or secondhand dealer for a
period of thirty (30) days from the date of pledge or purchase
thereof. The Chief of Police or Department of Justice may, for good
cause as specified by the Department of Justice, authorize prior
disposition of any such article, merchandise, or thing required to be
reported per Section 5.20.070 of this Code provided that the
pawnbroker or secondhand dealer who makes such disposition
pursuant to such authorization reports the sale thereof to the entity
making the authorization.
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B. No junk dealer shall sell or otherwise dispose of any article,
merchandise or thing within three days after same has been
received or purchased, nor fail to keep such article, merchandise or
thing unaltered, as pledged or purchased, in lots separate and
apart from other articles, merchandise or things in the place of
business of such junk dealer for a period of three days from the
date of pledge or purchase thereof.
5.20.110 Reserved.
Reserved.
5.20.120 Hours of Operation,
No person engaged in, conducting, managing or carrying on the
--busirTess-of -pawnbro ._or, second and-dea er', or junk ealer,-or any
agent or employee of any such person shall accept any pledge of
or loan any money upon personal property, or purchase or receive
any goods, wares or merchandise, or any article or thing, or in any
manner whatsoever engage in or conduct any such business
between the hours of twelve o'clock midnight on Saturday and the
hour of seven o'clock in the morning of the following Monday, or
between the hour of seven o'clock in the afternoon of any day,
other than Saturday, and the hour of seven o'clock in the morning
of the following day, other than Sunday.
5.20.130 Property Received from Outside State.
Notwithstanding any other provisions of this chapter, every auction
house manager, pawnbroker, secondhand dealer, and any
merchant dealing in or offering for sale any item or items of
secondhand jewelry or object of art or similar merchandise which is
identifiable by number, letter, phrase, mark or other means of
identification commonly recognized in the trade, shall file with the
Police Department the report required concerning any such item
received from outside the State of California or received from any
person, who, within thirty (30) days prior thereto, received it from
outside the State of California or brought it into the State of
California. Records of such articles shall be kept as required by
Section 5.20.080.
5.20.140 Application of Reports and Records Provisions to
Other Merchants Selling Secondhand Articles.
Whenever any section of this chapter shall require a report to the
Police Department, or shall require a record of any secondhand
article, or shall require the holding of such article for any stated
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period of time by any secondhand dealer or junk dealer or anyone
engaging in any business in this chapter specifically referred to, it
shall also include any merchant who receives for sale, attempts to
sell, or displays for sale any such secondhand article for another
person in expectation of receiving a commission or fee or gratuity,
or reward therefor, or as an agent or broker, and each and every
provision of this chapter shall thereupon be applicable to such
person as .though he were in the specific business mentioned
herein.
Section 3: If any section, subsection, sentence, clause or phrase of this
ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall
not affect the validity or constitutionality of the remaining portions of this ordinance. The
City Council hereby declares that it would have passed this ordinance, and each
section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any
one _(1)_ or_.more sections, subsection -s., -.-.sentences,_ clauses. or_..phrases_be d.eclared___.
invalid or unconstitutional.
Section 4: The City Council finds the approval of this ordinance is not subject to
the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines
Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable
indirect physical change in the environment) and 15060(c)(3) (the activity is not a
project as defined in Section 15378) of the CEQA Guidelines, California Code of
Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical
change to the environment, directly or indirectly. Alternatively, the City Council finds the
approval of this ordinance is not a project under CEQA Regulation Section 15061(b)(3)
because it has no potential for causing a significant effect on the environment.
Section 5: This ordinance shall be in full force and effect thirty (30) days after its
adoption by a majority vote of the City Council. The Mayor shall sign and the City Clerk
shall attest to the passage of this ordinance. The City Clerk shall cause this ordinance,
or a summary thereof, to be published pursuant to Charter Section 414.
This ordinance was introduced at a regular meeting of the City Council of the City
of Newport Beach, held on the 12th day of July, 2016, and adopted at a regular meeting
of the City Council of Newport Beach, held on the 26th day of July, 2016, by the
following vote, to wit:
AYES, COUNCILMEMBERS
NOES, COUNCILMEMBERS
ABSENT COUNCILMEMBERS
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DIANE B. DIXON, MAYOR
APPROVED AS TO FORAM:
THE CITY RNEY'S OFFICE
AARON C. HARP, CITY ATTORNEY
ATTEST:
LEILANI I. BROWN, CITY CLERK
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