8.2. SR 10-15-2012 REQUEST FOR ACTION
River
TO ITEM NUMBER
Mayor and City Council 8.2
AGENDA SECTION MEETING DATE PREPARED BY
General Business October 15,2012 Bob Kluntz,Police Captain
ITEM DESCRIPTION REVIEWED By
Ordinance Amendment Cal Portner, City Administrator
A. Chapter 38,Article VII, Regarding Pawnbrokers REVIEWED BY
B. Resolution for Summary Publication of the Ordinance
ACTION REQUESTED
The following motions from the Council:
1. A motion to adopt the amendments to the ordinance,Chapter 38,Article VII,Pawnbrokers.
2. A motion to adopt the resolution of summary publication of the amended ordinance.
BACKGROUND/DISCUSSION
The recent request to locate a pawnshop within the city prompted staff to review the current ordinances
regulating pawnbrokers. After researching pawnbroker ordinances in several other communities, staff
noted that deficiencies existed in the current City of Elk River pawnbroker ordinance.
With the assistance of counsel and the city clerk,Police Department staff drafted a document illustrating
the recommended deletions and additions to the current ordinance. Many changes were suggested,but
several of the major additions include:
• Changes to the definitions section;
• Language compelling the pawnbroker to utilize the Automated Pawn System (APS);
• Language clarifying the restrictions related to pawning or selling property;
• Language clarifying the requirements of the license application;
• Language,which relates to the fees for licensing and operating a pawnshop;
• Language,which limits the maximum number of pawnbroker licenses to two;
• Language that forfeits any fees to the city if a pawnbroker license is suspended, denied, or
revoked;
• Requirements for the collection of information by the pawnbroker from the person selling,
or pawning an item;
• Language that explains what is required on the pawn receipt;
• Language relating to the reporting requirements to the police department;
• Clarification in the wording of how a pawnbroker identifies a person pawning or selling an
item;
• Adds time to the holding period of an item;
• Language that requires any payment by a pawnbroker over five hundred dollars to be made
in a method other than cash;
• Language regulating the storage of items and the removal from the premises of the
pawnshop;
P O W E R I O 8 Y
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• Language that compels the pawnbroker to adhere to all state and federal regulations when
holding for sale any firearm or dangerous weapon;and
• Language that makes any violation of this chapter a misdemeanor.
FINANCIAL IMPACT
The costs related to publishing the summary resolution,which is reduced from the cost of publishing the
full ordinance.
ATTACHMENTS
• The ordinance of the City of Elk River amending Chapter 38,Article VII,Pawnbrokers;
• A Resolution of the City of Elk River approving notice of summary publication of the
amended ordinance of the City of Elk River,Chapter 38,Article VII,Pawnbrokers.
• The current City of Elk River Pawnbroker ordinance.
Action Motion by Second by Vote
Follow Up
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ethreagks to be removed
Underlines to be added
ORDINANCE 12-
CITY OF ELK RIVER
AN ORDINANCE OF THE CITY OF ELK RIVER AMENDING
CHAPTER 38 ARTICLE VII, PAWNBROKERS, OF THE ELK RIVER,
MINNESOTA, CITY CODE
The City Council of the City of Elk River does hereby ordain as follows:
Section 1. That Section 38-291 of the City of Elk River Code of Ordinances shall be
amended to add or amend the following definitions:
Acceptable Identification means a valid Minnesota driver's license,a current valid Minnesota
identification card,or a current valid photo identification card issued by another state or province of
Canada.
Billable Transaction means every reportable transaction conducted by a pawnbroker except renewals,
redemptions,or extensions of existing pawns on items previously reported and continuously in the
licensee's possession.
Chief of Police means the Chief of Police of the City of Elk River or their designee.
Licensee means the person,corporation.partnership,or other form of organization to whom a license
is issued under this article,including any agents or employees of the person,corporation,
partnership,or other form of organization.
Reportable Transaction means 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.
redeemed,or voided,except:
(1) The bulk purchase or consignment of new or used merchandise from a merchant.
manufacturer,or wholesaler having an established permanent place of business,and the
retail sale of said merchandise,provided the pawnbroker must maintain a record of such
purchase or consignment which describes each item,and must mark each item in a number
which relates it to that transaction record.
(2) Retail and wholesale sales of merchandise originally received by pawn or purchase,and for
which all applicable hold and/or redemption periods have expired.
Section 2.That Section 38-292 of the City of Elk River Code of Ordinances shall be amended to
add the following paragraph at the end thereof:
To help the police department better regulate current and future pawn businesses,decrease and
stabilize costs associated with the regulation of the pawn industry,and increase identification of
criminal activities in the pawn industry through the timely collection and sharing of pawn transaction,
information,this article also implements and establishes the required use of the Automated Pawn
System(APS).
Section 3.That Section 38-294 of the City of Elk River Code of Ordinances,entitled-Restrictions
on Pawning or Selling Property,shall be amended such that subsections (c) (e) (f) and(g)read as
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follows:
(c) No person may pawn,pledge,sell,leave,or deposit any article of property with any licensee
without first having presented : ...: ;-: : :. - . :; ; -:
by thc statc of rcsidcncy of thc person acceptable identification.
(e) For the purpose of this section,the term"adequate signage" shall be deemed to mean at least
one sign,of not less than four square feet in surface area,composed of lettering of not less*hat than
three-quarters 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 OWNER OF THE PROPERTY.THE PROPERTY MUST
BE FREE OF ALL CLAIMS AND LIENS.YOU MUST PRESENT VALID PHOTO
IDENTIFICATION.VIOLATION OF ANY OF THESE REQUIREMENTS IS A
CRIME.
(f) For the purpose of this section the term"separate written notice"shall be deemed to mean
either the receipt,or a printed form 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 of all claims and liens;which is acknowledged by way of signature
of the person pawning,pledging,selling.leaving,or depositing the article.
(g) No person seeking to pawn.pledge,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 form of acceptable identification.
Section 4.That Section 38-312 of the City of Elk River Code of Ordinances,entitled-Application,
shall be amended such that subsections (c)(8), (d)(4) and(e)(5)read as follows:
(8) The name,address and home phone number of the manager or proprietor of the
business. Any time the business changes managers or proprietors,the business shall notify the
City,in writing,of the change and provide the name,address and home phone number of the
incoming manager or proprietor.
(4) The name,address and home phone number of the manager or proprietor of the
business. Any time the business changes managers or proprietors,the business shall notify the
City,in writing,of the change and provide the name,address and home phone number of the
incoming manager or proprietor.
(5) The name,address and home phone number of the manager or proprietor of the
business. Any time the business changes managers or proprietors,the business shall notify the
City,in writing,of the change and provide the name,address and home phone number of the
incoming manager or proprietor.
Section 5.That Section 38-315 of the City of Elk River Code of Ordinances,entitled-Fees,shall be
amended to read as follows:
liccnac fcc3,shall be dctcrmincd by rcaolution.
(a) Initial application and background investigation fees for pawnbroker's licenses shall be
determined by council ordinance.
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(b) The annual license fees for licenses issued under this article shall be set by council ordinance.
(c) The billable transaction 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 by council ordinance. Licensees shall be notified in writing 30 days before any adjustment
is implemented.
(d) Billable transaction fees shall be billed monthly and are due and payable within 30 days. Failure
to do so is a violation of this article.
Section 6.That Section 38-320 of the City of Elk River Code of Ordinances,entitled Number of
Licenses,shall be amended to read as follows:
No more than three two pawnbroker's licenses shall be issued by the city at any time,and priority
shall be given to qualified applicants for renewal of existing licenses.
Section 7.That Section 38-322 of the City of Elk River Code of Ordinances,entitled Denial,
Suspension,or Revocation, shall be amended to add new subsection (g) as follows:
(g) Any fees paid to the City for a license will be forfeited to the City upon denial,suspension,or
revocation of the license.
Section 8.That Section 38-342 of the City of Elk River Code of Ordinances,entitled-Records,shall
be amended such that subsections (a)(5), (a)(6), (a)(7),and(a)(8)read as follows:
(5) The identification number and state of issue of the acceptable identification from a valid
photo driver's license or photo identification card issued by the state of residency of the person
from whom the article was received.
(6) The signature of the person identified in the transaction.
(7) The name and unique identifier of the licensee or employee that conducted the
transaction.
(8) The pawnbroker shall take a color photograph or color video recording of each item
pawned or sold that does not have a unique serial number or identification number
permanently engraved or affixed.
Section 9.That Section 38-343 of the City of Elk River's Code of Ordinances,entitled-Receipts,
shall be amended to read as follows:
Every licensee shall deliver to the party identified in every reportable transaction persen
-;_; - -; . : . .. ';. ; - . ; :- -- a receipt numbered to correspond with the
licensee's records.The receipt shall contain the substance of the transaction and the signature of the
person from whom the item was received.The receipt shall be in duplicate form,with one copy to
be retained by the licensee for three years.All pawn tickets shall also contain the statements required
under Minn. Stats. § 325J.04,subd. 2.
Section 10.That Section 38-344 of the City of Elk River Code of Ordinances,entitled-Daily
Reports To Police,shall be amended to read as follows:
Each licensee shall prcparc and deliver to thc chicf of police,by 12:00 noon thc first business day
through one of the following methods:
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..• - - - - - -- - - - - -
person by the licensee or an employee.
(2) Electronic reporting Daily reports maintained in an electronic data format meeting
Gpccificationa established by the chief of police and delivered in peraon by the lieenace or an
employee on electronic data storage media approved by the chief of police.
(a) Pawnbrokers must provide to the police department the information required in this Article
for all reportable transactions. The pawnbroker must display a sign of sufficient size,and in a
conspicuous place on the premises.so as to inform all patrons that transactions are reported to the
police department on a daily basis. Pawnbrokers must submit every reportable transaction to the
police department daily as follows:
(1) Pawnbrokers must provide to the police department the information as required in the
Article, for all reportable transactions,by transferring it from their computer to the police
department via modem. 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 police department.
(2) If a pawnbroker who has consistently reported via modem is unable to successfully
transfer the required reports by modem,the pawnbroker must provide the police department
with printed copies of all reportable transactions for that day by 12:00 noon the next business
day.in writing,on forms approved by the police department.
(3) All records required by this Article shall be kept at the licensee's place of business for
three (3)years and shall be available for inspection by the police chief at any reasonable time.
(b) Every pawnbroker shall make available to the police department,by uploading reportable
transactions from their electronic record system to the automated pawn system.using the most
current version of the Minneapolis APS Interchange Files Specification.all of the records
required by this Article for all reportable transactions which occurred that day.at the close of
each business day.
Section 11.That Section 38-349 of the City of Elk River Code of Ordinances,entitled-Examination
of Identification of Persons Pawning or Selling Property,shall be amended to read as follows:
No licensee shall purchase,accept,or receive any article of property from any person without first
having examined the form of acceptable identification presented by the person.
driver's license or valid photo identification card issued by the otatc of residency of the person.
Section 12.That Section 38-351 of the City of Elk River Code of Ordinances,entitled-Holding
Period,shall be amended to read as follows:
Any item sold or pawned to a pawnbroker for which a report to the police is required shall not be
sold or otherwise transferred for 39 60 days after the date of the sale or pawn.However,an
individual may redeem an item pawned 72 hours after the item was received on deposit by the
pawnbroker,excluding Sundays and legal holidays.During the 3.9 60-day holding period,licensees
are prohibited from allowing redemption of any article of property by anyone other than:
(1) The person to whom the receipt was issued;
(2) Any person identified in a written and notarized authorization to redeem the article of
property identified in the receipt;
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(3) A person identified in writing by the pledgor at the time of the initial transaction,which
authorization shall be signed by the pledgor;or
(4) A person who has the approval of the chief of police.
Written authorization for release of articles of property to persons other than the original pledgor
must be maintained along with the original transaction record.
Section 13.That Section 38-357 of the City of Elk River Code of Ordinances,entitled-Manner of
Payment to Pledgors,shall be amended to read as follows:
Payment of more than$440.00 five hundred dollars ($500.00) by any 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.
Section 14.That Section 38-358 of the City of Elk River Code of Ordinances,entitled Miscellaneous
Prohibited Acts by Licensees and Employees,shall be amended by replacing subsection(10) thereof
to read as follows:
A pawnbroker and any clerk,agent,or employee of a pawnbroker shall not:
(10) Remove pledged goods from the pawnshop premises or other 3torat c place approved by
the city at any time before unredeemed,pledged goods arc cold pursuant to section 38 355
(10)Remove pledged goods from the pawnshop premises or other storage place approved by a
municipality at any time before the expiration of the redemption period pursuant to section 38-
355.However. (i) a pawnbroker is permitted to return pledge goods to the borrower at any
time during the redemption period.(ii) a pawnbroker is permitted to sell the pledged goods or
remove the pledged goods from the pawnshop premises or other storage at any time after the
expiration of the redemption period set forth in section 38-355 and(iii) a pawnbroker who
purchases goods not involving a pawn transaction is permitted to sell or remove the purchased
goods from the pawnshop premises or other storage 31 days or later from the purchase
transaction date.
Section 15.That the City of Elk River Code of Ordinances shall be amended to add new section 38-
359 entitled—Sale of Firearms by Pawnbrokers,which shall read as follows:
A pawnbroker holding for sale a firearm or other dangerous weapon shall comply with all state and
federal regulations.
Section 16.That the City of Elk River Code of Ordinances shall be amended to add new Section 38-
360 entitled Penalty,which shall read as follows:
Violations of any provisions of this article shall be a misdemeanor.
Section 17. That this ordinance shall take effect upon adoption and shall be published as
provided by law.
Passed and adopted by the City Council of the City of Elk River this day of
,2012.
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John J. Dietz,Mayor
ATTEST:
Tina Allard,City Clerk
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RESOLUTION I2-
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION APPROVING NOTICE OF
SUMMARY PUBLICATION OF ORDINANCE #I2-_
AN ORDINANCE OF THE CITY OF ELK RIVER AMENDING CHAPTER 38
ARTICLE VII, PAWNBROKERS, OF THE CITY OF ELK RIVER
MINNESOTA, CITY CODE.
WHEREAS, on October 15,2012 the Elk River City Council adopted Ordinance 12-_
amending various sections of Chapter 38, of the Elk River Code of
Ordinances;and
WHEREAS, the changes made to Chapter 38,include:
• Changes to the definitions section;
• Language compelling the pawnbroker to utilize the Automated Pawn System (APS);
• Language clarifying the restrictions related to pawning or selling property;
• Language clarifying the requirements of the license application;
• Language,which relates to the fees for licensing and operating a pawnshop;
• Language,which limits the maximum number of pawnbroker licenses to two;
• Language that forfeits any fees to the city if a pawnbroker license is suspended,
denied,or revoked;
• Requirements for the collection of information by the pawnbroker from the person
selling, or pawning an item;
• Language that explains what is required on the pawn receipt;
• Language relating to the reporting requirements to the police department;
• Clarification in the wording of how a pawnbroker identifies a person pawning or
selling an item;
• Adds time to the holding period of an item;
• Language that requires any payment by a pawnbroker over five hundred dollars to be
made in a method other than cash;
• Language regulating the storage of items and the removal from the premises of the
pawnshop;
• Language that compels the pawnbroker to adhere to all state and federal regulations
when holding for sale any firearm or dangerous weapon;and
• Language that makes any violation of this chapter a misdemeanor.
WHEREAS, a copy of the full text of the ordinance is available for inspection by any
person at the office of the Elk River City Clerk, 13065 Orono Parkway,
during regular business hours—8:00 a.m. to 4:30 p.m.,Monday through
Friday;and
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NOW, THEREFORE, BE IT RESOLVED, that the City Council,by at least four-fifths
vote, authorizes the publication of the title and summary of Ordinance 12-_and that
Ordinance 12-_shall become effective upon publication of this resolution.
Passed and adopted this 15th day of October 2012.
John J. Dietz,Mayor
ATTEST:
Tina Allard, City Clerk
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CURRENT ORDINANCE
Elk River, Minnesota, Code of Ordinances>> -CODE OF ORDINANCES>> Chapter 38 -LICENSES AND
BUSINESS REGULATIONS>>ARTICLE VII. -PAWNBROKERS>>
ARTICLE VII. - PAWNBROKERS u
DIVISION 1.-GENERALLY
DIVISION 2.-LICENSE
DIVISION 3.-OPERATIONAL RESTRICTIONS AND REQUIREMENTS
FOOTNOTE(S): _.__........_
(56)State Law reference—Pawnbrokers, Minn. Stats. ch. 325J;local ordinances regulating pawnbrokers, Minn. Stats. §§
325J.02, 325113. (Back)
Elk River, Minnesota, Code of Ordinances>> -CODE OF ORDINANCES>> Chapter 38-LICENSES AND
BUSINESS REGULATIONS»ARTICLE VII. -PAWNBROKERS» DIVISION 1. -GENERALLY>>
DIVISION 1. -GENERALLY
Sec.38-291.-Definitions.
Sec.38-292.-Purpose of article.
Sec.38-293.-Responsibility of licensee for acts of employees.
Sec.38-294.-Restrictions on pawning or selling property.
Secs. 38-295-38-310.-Reserved.
Sec. 38-291. - Definitions.
The following words, terms and phrases, when used in this article, shall have the meanings ascribed
to them in this section, except where the context clearly indicates a different meaning:
Appropriate law enforcement agency means the attorney general of the state, the county sheriff, or
the chief of police of the city or the chief's designee.
Licensee means the person to whom a license is issued under this article, including any agents or
employees of the person.
Minor means any natural person under the age of 18 years.
Municipality means the City of Elk River, Minnesota.
Pawn transaction means any loan on the security of pledged goods or any purchase of pledged
goods on the condition that the pledged goods left with the pawnbroker may be redeemed or repurchased
by the seller for a fixed price within a fixed period of time.
Pawnbroker.
(1)
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Except as provided in subsection (2)of this definition, the term "pawnbroker" means a person
engaged in whole or in part in the business of lending money on the security of pledged
goods left in pawn, or in the business of purchasing tangible personal property to be left in
pawn on the condition that it may be redeemed or repurchased by the seller for a fixed price
within a fixed period of time.
(2) The following are exempt from the definition of"pawnbroker": any bank regulated by the state,
the comptroller of the currency of the United States, the Federal Deposit Insurance
Corporation, the board of governors of the Federal Reserve System, or any other federal or
state authority and their affiliates; any bank or savings association whose deposits or
accounts are eligible for insurance by the Federal Deposit Insurance Corporation or any
successor to it and all affiliates of those banks and savings associations; any state or
federally chartered credit union; and any industrial loan and thrift company or regulated lender
subject to licensing and regulation by the department of commerce.
Pawnshop means the location at which or premises in which a pawnbroker regularly conducts
business.
Pledged goods means tangible personal property, securities, bank drafts, or printed evidence of
indebtedness that are purchased by, deposited with, or otherwise actually delivered into the possession of
a pawnbroker in connection with a pawn transaction.
(Code 1982, § 724.00)
Cross reference—Definitions generally, § 1-2.
State law reference—Similar provisions, Minn. Stets.§325,1.01.
Sec. 38-292. - Purpose of article.
The city council finds that pawnbrokers potentially provide an opportunity for the commission of
crimes and their concealment 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. The purpose of this article is therefore to prevent pawnbroking from
being used as facilities for commission of crimes and to ensure that such businesses comply with basic
consumer protection standards, thereby protecting the public health, safety, and general welfare of the
citizens of the city.
(Code 1982, § 724)
Sec. 38-293. - Responsibility of licensee for acts of employees.
The conduct of agents or employees of a licensee under this article, while engaged in performance
of their duties for their principal or employer under such license, shall be deemed the conduct of the
licensee.
(Code 1982, § 724.18(12))
Sec. 38-294. - Restrictions on pawning or selling property.
(a) No person may pawn, pledge, sell, leave, or deposit any article of property not his own, nor shall any
person 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.
(b) No minor may pawn, pledge, sell, leave, or deposit any article of property with any licensee.
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(c) No person may pawn, pledge, sell, leave, or deposit any article of property with any licensee without
first having presented a valid photo driver's license or valid photo identification card issued by the
state of residency of the person.
(d) 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 requirements of this
section.
(e) For the purpose of this section, the term "adequate signage" shall be deemed to mean at least one
sign, of not less than four square feet in surface area, composed of lettering of not less that three-
quarters 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 OWNER OF THE PROPERTY. THE PROPERTY MUST BE FREE OF ALL CLAIMS
AND LIENS. YOU MUST PRESENT VALID PHOTO IDENTIFICATION. VIOLATION OF ANY OF
THESE REQUIREMENTS IS A CRIME.
(Code 1982, §724.24)
Secs. 38-295-38-310. - Reserved.
Elk River, Minnesota, Code of Ordinances>> -CODE OF ORDINANCES>> Chapter 38 -LICENSES AND
BUSINESS REGULATIONS» ARTICLE VII. -PAWNBROKERS» DIVISION 2. -LICENSE>>
DIVISION 2. - LICENSE
Sec.38-311.-Required.
Sec.38-312.-Application.
Sec.38-313.-Investigation and criminal records check.
Sec.38-314.-Hearing.
Sec.38-315.-Fees.
Sec.38-316.-Persons and premises ineligible for license.
Sec.38-317.-Bond.
Sec.38-318.-Renewal: proration of fees.
Sec.38-319.-Transfer: use of off-site storage facilities.
Sec.38-320.-Number of licenses.
Sec.38-321.-Posting.
Sec. 38-322.-Denial,suspension or revocation.
Secs.38-323----38-340.-Reserved.
Sec. 38-311. - Required.
(a) No person may engage in business as a pawnbroker or otherwise portray himself as a pawnbroker
unless a person first obtains a license from the city as provided in this division. Any pawn transaction
made without benefit of a license is void.
(b) A separate license is required for each place of business. More than one license may be issued to a
person if that person complies with this article for each license.
State law reference—Similar provisions, Minn. Stats. §325J.02(b), (C).
(c)
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It is unlawful for any person who owns or controls any real property to knowingly permit it to be used
for pawnbroking without the license required by this division.
(Code 1982, §§724.02, 724.10(2), 724.18(13))
Sec. 38-312. -Application.
(a) Applications for pawnbrokers' licenses to be issued under this division shall contain information as
required on forms prescribed by the city.
(b) The application shall state whether the applicant is a natural person, corporation, partnership or
other form of organization.
(c) If the applicant is a natural person, the following shall be furnished:
(1) True full name, place and date of birth and street residence address, and length of time at
that address, of the applicant.
(2) Whether the applicant has ever used or been known by a name other than his true name and,
if so, what was such full name, and information concerning dates and places where used.
(3) The full 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.
(4) Kind, full name and location of every business or occupation the applicant has been engaged
in during the preceding five years.
(5) Full names and addresses of the applicant's employers and partners, if any, for the preceding
five years.
(6) Whether the 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.
(7) 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.
(d) If the applicant is a partnership, the following shall be furnished:
(1) The full name and address and date of birth of all general and limited partners and all
information concerning each general partner as required in subsection (c) of this section.
(2) The full name and date of birth of the managing partners and the interest of each partner in
the pawnbroker business.
(3) A true copy of the partnership agreement, which shall be submitted with the application. If the
partnership is required to file a certificate as to a trade name pursuant to Minn. Stats. §
333.01, a certified copy of such certificate shall be attached to the application.
(e) If the applicant is a corporation or other organization, the following shall be furnished:
(1) The name of the corporation or business form, and, if incorporated, the state of incorporation.
(2) A true copy of the certificate of incorporation, articles of incorporation or association
agreement, and bylaws, which shall be attached to the application. If the applicant is a foreign
corporation, a certificate of authority as required by Minn. Stats. § 303.06 shall be attached.
(3) The full name and date of birth of all officers, managers, proprietors or other agents in charge
of the business and all information concerning each officer, manager, proprietor or agent as
required in subsection (c) of this section.
(4) A list of all persons who control or own an interest in excess of five percent in the corporation
or organization, and all information concerning such persons as required in subsection (c) of
this section.
(f) In addition, all applicants shall furnish the following:
(1)
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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, street access,
and parking facilities.
(2) The street address of the premises for which application is made.
(3) Whether or not all real estate taxes, assessments, or other financial claims of the city, state or
federal government for the business and premises to be licensed have been paid and, if not
paid, the years for which delinquent.
(4) Such other information as the city council shall require.
(9) If the application is by a natural person, it shall be signed and sworn to by such person; if by a
corporation, by an officer thereof; if by a partnership, by one of the general partners; or if by an
incorporated association, by the operating officer or managing officer thereof. If the applicant is a
partnership, the application, license and bond shall be made and issued in the name of all partners.
Any false statement in an application is unlawful and shall result in denial or revocation of the
application.
(Code 1982, §§724.04, 724.08, 724.26(1))
Sec. 38-313. - Investigation and criminal records check.
At the time of making an initial or renewal application for a pawnbroker's license, the applicant shall,
in writing, authorize the police department to investigate all facts set out in the application and do a
personal background and criminal record check on the applicant. The applicant shall further authorize the
police department to release information received from such investigation to the city council.
(Code 1982, § 724.10(1))
Sec. 38-314. - Hearing.
A public hearing shall be held regarding issuance of a license under this division, and the hearing
before the city council shall be advertised at least ten days prior to the scheduled date of the hearing.
(Code 1982, § 724.10(5))
Sec. 38-315. - Fees.
Initial application and background investigation fees for pawnbroker's licenses, as well as annual
license fees, shall be determined by resolution.
(Code 1982.§724.12)
Sec. 38-316. - Persons and premises ineligible for license.
(a) Individual persons. No license shall be issued under this division to an applicant who is a natural
person if such applicant:
(1) Is not 18 years of age or older on the date the license application is submitted to the issuing
authority;
(2) Has been convicted of any crime directly related to the occupation licensed as prescribed by
Minn. Stats. § 364.03, subd. 2, and has not shown competent evidence of sufficient
rehabilitation and present fitness to perform the duties of a pawnbroker as outlined in this
article and as prescribed by Minn. Stats. § 364.03, subd. 3;
(3)
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Is not a citizen of the United States or a resident alien, or is legally prohibited from working in
the United States;
(4) Is not of good moral character or repute;
(5) Holds an intoxicating liquor license issued by the city;
(6) Has knowingly falsified or misrepresented information on the license application;
(7) Is not the real party in interest in the business being licensed; or
(8) Owes taxes or assessments to the state, county, school district, or city that are due and
delinquent.
(b) Partnerships. No license shall be issued under this division to an applicant that is a partnership if
such applicant has any general partner or managing partner who:
(1) Is not 18 years of age or older on the date the license application is submitted to the issuing
authority;
(2) Has been convicted of any crime directly related to the occupation licensed as prescribed by
Minn. Stats. § 364.03, subd. 2, and who has not shown competent evidence of sufficient
rehabilitation and present fitness to perform the duties of a pawnbroker as outlined in this
article and as prescribed by Minn. Stats. § 364.03, subd. 3;
(3) Is not a citizen of the United States or a resident alien, or is legally prohibited from working in
the United States;
(4) Is not of good moral character or repute;
(5) Holds an intoxicating liquor license under this Code;
(6) Has knowingly falsified or misrepresented information on the license application;
(7) Is not the real party in interest in the business being licensed; or
(8) Owes taxes or assessments to the state, county, school district, or city that are due and
delinquent.
(c) Corporations and associations. No license shall be issued under this division to an applicant that is a
corporation or other organization if such applicant has any manager, proprietor, or agent in charge of
the business to be licensed who:
(1) Is not 18 years of age or older on the date the license application is submitted to the issuing
authority;
(2) Has been convicted of any crime directly related to the occupation licensed as prescribed by
Minn. Stats. § 364.03, subd. 2, and who has not shown competent evidence of sufficient
rehabilitation and present fitness to perform the duties of a pawnbroker as outlined in this
article and prescribed by Minn. Stats. § 364.03, subd. 3;
(3) Is not a citizen of the United States or a resident alien, or is legally prohibited from working in
the United States;
(4) Is not of good moral character or repute;
(5) Holds an intoxicating liquor license under this Code;
(6) Has knowingly falsified or misrepresented information on the license application;
(7) Is not the real party in interest in the business being licensed; or
(8) Owes taxes or assessments to the state, county, school district, or city that are due and
delinquent.
(d) Change of ownership of business;eligibility requirements for owner of premises. Any change,
directly or beneficially, in the ownership of any licensed pawnshop shall require an application for a
new license, and the new owner must satisfy all current eligibility requirements. No license shall be
granted or renewed if the property on which the business is to be conducted is owned by a person
who is ineligible for a license under any of the requirements of this section, except that a property
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owner who is a minor or who has been convicted of a crime, other than a crime involving theft, shall
not make the premises ineligible under this section.
(e) Ineligible premises. The following locations shall be ineligible for a license under this division:
(1) No license shall be granted or renewed for operation on any property on which taxes,
assessments, or other financial claims of the state, county, school district, or city are due,
delinquent, or unpaid. If a suit has been commenced under Minn. Stats. ch. 278 questioning
the amount or validity of taxes, the city council may, on application, waive strict compliance
with this provision. No waiver may be granted, however, for taxes or any portion thereof which
remain unpaid for a period exceeding one year after becoming due.
(2) No license shall be granted if the property is not properly zoned for pawnshops under chapter
30, article VI, unless the business is a legal nonconforming use.
(3) No license shall be granted if the location is not one at which a pawnshop may be operated
under the zoning regulations (chapter 30, article VI).
(4) No pawnshop shall be located within ten driving miles of any gambling casino. No pawnshop
lawfully operating as of the date of enactment of the ordinance from which this article is
derived shall be required to relocate or close as a result of this subsection (e)(4).
(Code 1982, §724.16)
State law reference—License eligibility, Minn. Stats. §325J.03.
Sec. 38-317. - Bond.
At the time of filing an application for a pawnbroker's license, the applicant shall file a bond in the
amount of$5,000.00 with the city. The bond, with a duly licensed surety company as surety thereon, must
be approved as to form by the city attorney. The bond must be conditioned that the licensee shall observe
the ordinances of the city in relation to the business of pawnbroker 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 or, in lieu thereof, pay such person the reasonable value thereof.
(Code 1982, §724.14)
Sec. 38-318. - Renewal; proration of fees.
Each renewal pawnbroker's license shall be issued for a maximum period of one year, January 1 to
December 31. License fees will be prorated on a monthly basis. Investigation fees will not be prorated.
(Code 1982, §724.06)
Sec. 38-319. - Transfer; use of off-site storage facilities.
(a) Each pawnbroker's license shall be issued to the applicant only and shall not be transferable. A
separate license is required for each pawnshop. Each license shall be issued only for the premises
described in the application and shall not be transferable to a different location or owner.
(b) A license under this division authorizes the licensee to carry on his business only at the permanent
place of business designated in the license. However, upon written request, the chief of police may
approve an off-site locked and secured storage facility. The licensee shall permit inspection of the
facility in accordance with this Code. All provisions of this article regarding recordkeeping and
reporting apply to the facility and its contents. Articles of property shall be stored in compliance with
all provisions of this Code.
(Code 1982, §§724.10(2), (3), 724.18(14))
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Sec. 38-320. - Number of licenses.
No more than three pawnbroker's licenses shall be issued by the city at any time, and priority shall
be given to qualified applicants for renewal of existing licenses.
(Code 1982.§724.90(4))
Sec. 38-321. - Posting.
All licensees under this division shall post their licenses, in a conspicuous place, in the licensed
premises.
(Code 1982, §724.18(11))
Sec. 38-322. - Denial, suspension or revocation.
(a) Any false statement in an application for a pawnbroker's license, or any omission to state any
information called for on an application form, shall, upon discovery of such falsehood, work an
automatic refusal of the license or, if the license has already been issued, shall render any license
issued pursuant thereto void. Prior issuance is of no effect to protect the applicant from prosecution
for violation of this article or any part of this article.
(b) The city council may suspend or revoke a license issued under this division 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.
(c) The city council may suspend or revoke a license issued under this division upon a finding of a
violation of any of the provisions of this article 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 shall result in the immediate suspension, pending a hearing on revocation,
of any license issued under this division.
(d) Except in the case of a suspension pending a hearing on revocation, a revocation or suspension of a
license by the council shall be preceded by a public hearing. The hearing notice shall be given at
least ten days prior to the hearing, shall include notice of the time and place of the hearing, and shall
state the nature of the charges against the licensee.
(e) No expiration, revocation, suspension, or surrender of any license shall impair or affect the obligation
of any preexisting lawful contract between the licensee and any pledgor.
State law reference—Similar provisions. Minn. Stats. §325J.02(e).
(f) The appropriate local law enforcement agency shall be notified by the city of any licensee whose
license has expired or been surrendered, suspended, or revoked as provided by this article.
State law reference—Similar provisions, Minn. Stats. §325,1.02(f).
(Code 1982, §724.26)
Secs. 38-323-38-340. - Reserved.
Elk River, Minnesota, Code of Ordinances>> -CODE OF ORDINANCES>> Chapter 38-LICENSES AND
BUSINESS REGULATIONS»ARTICLE VII. -PAWNBROKERS» DIVISION 1-OPERATIONAL
RESTRICTIONS AND REQUIREMENTS>>
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DIVISION 3. - OPERATIONAL RESTRICTIONS AND REQUIREMENTS
Sec.38-341.-Inspections.
Sec.38-342.-Records.
Sec.38-343.-Receipts.
Sec.38-344.-Daily reports to police.
Sec.38-345.-Hours of operation.
Sec.38-346.-Accepting property with altered serial number.
Sec.38-347.-Accepting property encumbered by security interest.
Sec.38-348.-Accepting goods from person other than owner.
Sec.38-349.-Examination of identification of persons pawning or selling property.
Sec.38-350.-Permitted charges.
Sec.38-351.-Holding period.
Sec. 38-352.-Police hold on specific items.
Sec.38-353.-Confiscation of property.
Sec.38-354.-Motor vehicle title pawn transactions.
Sec.38-355.-Effect of nonredemption of property.
Sec.38-356.-Persons authorized to redeem property:compensation for lost or damaged property.
Sec.38-357.-Manner of payment to pledgors.
Sec.38-358.-Miscellaneous prohibited acts by licensees and employees.
Secs.38-359-38-380.-Reserved.
Sec. 38-341. - Inspections.
Any licensee shall, at all times during the term of the license, allow the chief of police to enter the
premises where the licensee is carrying on business, including all off-site storage facilities as authorized in
section 38-319(b), during normal business hours, except in an emergency, for the purpose of inspecting
such premises and inspecting the articles and records therein, to locate goods suspected or alleged to
have been stolen and to verify compliance with this article or other applicable laws. No licensee shall
conceal any article in his possession from the chief of police.
(Code 1982. §724.22)
Sec. 38-342. - Records.
(a) Records relating to articles pawned or purchased. Every licensee, at the time of receipt of an article
deposited, left, sold, purchased, pledged or pawned, shall immediately record in English, in an
electronic data format or on forms approved by the chief of police, or in a book or journal which has
page numbers that are preprinted in indelible ink, the following information:
(1) A complete and accurate description of the article, including but not limited to any
manufacturer name, brand name, trademark, model number, serial number, identification
number or other identifying mark.
(2) The amount of money received by the person pawning, pledging, or selling the article,
together with the annual rate of interest and the amount required to redeem the article if it was
pawned or pledged, and, if applicable, the maturity date of the pawned transaction.
(3) The date, time and place of receipt of the article.
(4) The full name, date of birth, current address of residence, current telephone number if
possessed, and a reasonably accurate description of the person from whom the article was
received, including at a minimum sex, height, weight, and race.
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(5) The identification number and state of issue from a valid photo driver's license or photo
identification card issued by the state of residency of the person from whom the article was
received.
(6) The name or unique identifier of the licensee or employee that conducted the transaction.
(b) Photograph of persons selling or pawning articles. A pawnbroker shall take either a photograph or a
still video of each person selling or pawning any item of property. If a photograph is taken, it shall be
at least two inches in length by two inches in width and shall be immediately developed and
referenced with the information regarding the person and the item sold or pawned. The major portion
of the photograph shall include a front facial pose. The pawnbroker shall notify the person of the
photograph requirement prior to taking his photograph. If a still video photograph is taken, the video
camera shall zoom in on the person pawning or selling the article so as to include a close-up of the
person's face. The video photograph shall be referenced by time and date so as to correspond to the
merchandise sold or pawned by the person. The pawnbroker shall, by adequate signage, inform the
person that he is being videotaped. The photographs and videotape shall be kept by the pawnbroker
for four months.
(c) Records of articles redeemed, sold or disposed of. When an article of pawned or pledged property is
redeemed from a licensee, the records shall contain an account of such redemption with the date,
the interest charges accrued, and the total amount for which the article was redeemed. When an
article of purchased or forfeited property is sold or disposed of by a licensee and the licensee
receives$100.00 or more in payment therefor, the records shall contain an account of such sale with
the date, the amount for which the article was sold, and the full name, current address, and
telephone number of the person to whom sold.
(d) Inspection of records. The records referred to in this section shall be open to the inspection of the
chief of police and any other duly authorized local, state, or federal law enforcement officer at all
reasonable times and shall be retained by the licensee for at least four years.
(Code 1982, § 724.18(1)--(3))
State law reference—Records generally, Minn. Scats. §325J.05(b).
Sec. 38-343. - Receipts.
Every licensee shall deliver to the person pawning, pledging, selling, leaving or depositing any
articles a receipt numbered to correspond with the licensee's records. The receipt shall contain the
substance of the transaction and the signature of the person from whom the item was received. The receipt
shall be in duplicate form, with one copy to be retained by the licensee. All pawn tickets shall also contain
the statements required under Minn. Stats. § 325J.04, subd. 2.
(Code 1982. § 724.18(4))
Sec. 38-344. - Daily reports to police.
Each licensee shall prepare and deliver to the chief of police, by 12:00 noon the first business day
following the date of a transaction, the information required to be collected pursuant to this article, through
one of the following methods:
(1) Manual reporting. Daily reports on forms approved by the chief of police delivered in person
by the licensee or an employee.
(2) Electronic reporting. Daily reports maintained in an electronic data format meeting
specifications established by the chief of police and delivered in person by the licensee or an
employee on electronic data storage media approved by the chief of police.
(Code 1982, §724.18(5))
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Sec. 38-345. - Hours of operation.
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.
(Code 1982, § 724.20(1))
Sec. 38-346. -Accepting property with altered serial number.
No licensee shall purchase, accept, or receive any article of property which contains an altered or
obliterated serial number or an article of property whose serial number has been removed.
(Code 1982, §724.20(3))
Sec. 38-347. -Accepting property encumbered by security interest.
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, the
term "security interest" means an interest in property which secures payment or other performance of an
obligation.
(Code 1982, §724.20(4))
Sec. 38-348. -Accepting goods from person other than owner.
No licensee shall purchase, accept, or receive any article of property from any person, knowing, or
having reason to know, that such person is not the true and correct owner of the property.
(Code 1982, §724.20(5))
Sec. 38-349. - Examination of identification of persons pawning or selling property.
No licensee shall purchase, accept, or receive any article of property from any person without first
having examined a valid photo driver's license or valid photo identification card issued by the state of
residency of the person.
(Code 1982, §724.20(6))
Sec. 38-350. - Permitted charges.
(a) Notwithstanding any other ordinance or statute, rule, or regulation, or Minn. Stats. § 325J.13, a
pawnbroker may contract for and receive a pawnshop charge not to exceed three percent per month
of the principal amount advanced in the pawn transaction plus a reasonable fee for storage and
services. A fee for storage and services may not exceed $20.00 if the property is not in the
possession of the pawnbroker.
(b) The pawnshop charge allowed under subsection (a) of this section shall be deemed earned, due,
and owing as of the date of the pawn transaction, and a like sum shall be deemed earned, due, and
owing on the same day of the succeeding month. However, if full payment is made more than two
weeks before the next succeeding date, the pawnbroker shall remit one-half of the pawnshop charge
for that month to the pledgor.
(c)
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Interest shall not be deducted in advance, nor shall any loan be divided or split so as to yield greater
interest or fees than would be permitted upon a single, consolidated loan or for otherwise evading
any provisions of this section.
(d) Any interest, charge, or fees contracted for or received, directly or indirectly, in excess of the amount
permitted under this section shall be uncollectible and the pawn transaction shall be void.
(e) A schedule of charges permitted by this section shall be posted on the pawnshop premises in a
place clearly visible to the general public.
State law reference—Similar provisions, Minn. Slats. §325J.07.
Sec. 38-351. - Holding period.
Any item sold or pawned to a pawnbroker for which a report to the police is required shall not be sold
or otherwise transferred for 30 days after the date of the sale or pawn. However, an individual may redeem
an item pawned 72 hours after the item was received on deposit by the pawnbroker, excluding Sundays
and legal holidays. During the 30-day holding period, licensees are prohibited from allowing redemption of
any article of property by anyone other than:
(1) The person to whom the receipt was issued;
(2) Any person identified in a written and notarized authorization to redeem the article of property
identified in the receipt;
(3) A person identified in writing by the pledgor at the time of the initial transaction,which
authorization shall be signed by the pledgor; or
(4) A person who has the approval of the chief of police.
Written authorization for release of articles of property to persons other than the original pledgor must be
maintained along with the original transaction record.
(Code 1982, § 724.18(6))
Sec. 38-352. - Police hold on specific items.
Whenever the chief of police notifies a licensee not to sell or permit to be redeemed an article of
property in the licensee's possession, the article may not be sold, redeemed or removed from the premises
by the licensee. The police hold shall be confirmed in writing within 72 hours and will remain in effect for 90
days from the date of notification unless the chief of police determines the hold is still necessary and
notifies the licensee in writing. When a police hold is no longer needed, the chief of police shall so notify the
licensee.
(Code 1982.§724.18(8))
Sec. 38-353. - Confiscation of property.
If an article of property in a licensee's possession is determined to be stolen, it may be confiscated
and seized as evidence by any police officer. A request for restitution from any person charged in regard to
the stolen property confiscated shall be made on behalf of the licensee. When an article of property is
confiscated, the person doing so shall provide identification upon request of the licensee, and shall
complete a confiscation report providing at a minimum the name and telephone number of the confiscating
agency and investigator, and the case number of the police report related to the confiscation. The
confiscation report shall be included with the daily reports to police submitted by the licensee, for review by
the chief of police.
(Code 1982, §724.18(9))
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Sec. 38-354. - Motor vehicle title pawn transactions.
(a) In addition to the other requirements of this article, a pawnbroker who holds a title to a motor vehicle
as part of a pawn transaction shall:
(1) Be licensed as a used motor vehicle dealer under Minn. Stats. § 168.27, and post such
license on the pawnshop premises;
(2) Verify that there are no liens or encumbrances against the motor vehicle with the state
department of public safety; and
(3) Verify that the pledgor has automobile insurance on the motor vehicle as required by law.
(b) A pawnbroker may not sell a motor vehicle covered by a pawn transaction until 90 days after
recovery of the motor vehicle.
State law reference—Similar provisions. Minn. Stats. §325J.095.
Sec. 38-355. - Effect of nonredemption of property.
(a) A pledgor shall have no obligation to redeem pledged goods or make any payment on a pawn
transaction. Pledged goods not redeemed within at least 60 days of the date of the pawn
transaction, renewal, or extension shall automatically be forfeited to the pawnbroker, and qualified
right, title, and interest in and to the goods shall automatically vest in the pawnbroker.
(b) The pawnbroker's right, title, and interest in the pledged goods under subsection (a)of this section is
qualified only by the pledgor's right, while the pledged goods remain in possession of the
pawnbroker and not sold to a third party, to redeem the goods by paying the loan plus fees and/or
interest accrued up to the date of redemption.
(c) A pawn transaction that involves holding only the title to property is subject to Minn. Stats. ch. 168A
or 336.
State law reference—Similar provisions, Minn. Scats. §325J.06.
Sec. 38-356. - Persons authorized to redeem property; compensation for lost or damaged
property.
Any person to whom the receipt for pledged goods was issued, or any person identified in a written
and notarized authorization to redeem the pledged goods identified in the receipt, or any person identified
in writing by the pledgor at the time of the initial transaction, which authorization shall be signed by the
pledgor, shall be entitled to redeem or repurchase the pledged goods described on the ticket. If the goods
are lost or damaged while in possession of the pawnbroker, the pawnbroker shall compensate the pledgor,
in cash or replacement goods acceptable to the pledgor, for the fair market value of the lost or damaged
goods. Proof of compensation shall be a defense to any prosecution.
State law reference—Similar provisions, Minn. Stets. §325J.09.
Sec. 38-357. - Manner of payment to pledgors.
Payment of more than $100.00 by any 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.
(Code 1982, § 724.18(10))
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Sec. 38-358. - Miscellaneous prohibited acts by licensees and employees.
A pawnbroker and any clerk, agent, or employee of a pawnbroker shall not:
(1) Make any false entry in the records of pawn transactions;
(2) Falsify, obliterate, destroy, or remove from the place of business the records, books, or
accounts relating to the licensee's pawn transactions;
(3) Refuse to allow the appropriate law enforcement agency, the attorney general of the state, or
any other duly authorized state or federal law enforcement officer to inspect the pawn records
or any pawn goods in the person's possession during the ordinary hours of business or other
times acceptable to both parties;
(4) Fail to maintain a record of each pawn transaction for three years;
(5) Accept a pledge or purchase property from a person under the age of 18 years;
(6) Make any agreement requiring the personal liability of a pledgor or seller, or waiving any
provision of this article, or providing for a maturity date less than one month after the date of
the pawn transaction;
(7) Fail to return pledged goods to a pledgor or seller, or provide compensation as set forth in
section 38-356, upon payment of the full amount due the pawnbroker, unless either the date
of redemption is more than 60 days past the date of the pawn transaction, renewal, or
extension and the pawnbroker has sold the pledged goods pursuant to section 38-355, or the
pledged goods have been taken into custody by a court or a law enforcement officer or
agency;
(8) Sell or lease, or agree to sell or lease, pledged or purchased goods back to the pledgor or
seller in the same or a related transaction;
(9) Sell or otherwise charge for insurance in connection with a pawn transaction; or
(10) Remove pledged goods from the pawnshop premises or other storage place approved by the
city at any time before unredeemed, pledged goods are sold pursuant to section 38-355
State law reference—Similar provisions, Minn. Stats. §325J.08.
Secs. 38-359-38-380. - Reserved.
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