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HomeMy WebLinkAbout03 - Amending Chapter 5.20 of the NBMC Entitled Pawnbrokers, Secondhand Dealers and Junk DealersPORT CITY OF @_ NEWPORT REACH City Council Staff Report July 12, 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, jshort@nbpd.org PHONE: 949-644-3778 TITLE: Introduction of Ordinance No. 2016-10 Amending Chapter 5.20 of the NBMC Entitled Pawnbrokers, Secondhand Dealers and Junk Dealers ABSTRACT: The City of Newport Beach ("City") currently regulates pawnbrokers, secondhand dealers and junk dealers pursuant to Chapter 5.20 of the Newport Beach Municipal Code ("NBMC") through a City permit/license process. Ordinance No. 2016-10 amends NBMC Chapter 5.20 to eliminate outdated requirements and reflect the new requirements found in recently adopted State legislative provisions. 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) Introduce Ordinance No. 2016-10, 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'; and pass to second reading on July 26, 2016. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION: The City currently regulates pawnbrokers, secondhand dealers and junk dealers pursuant to Chapter 5.20 of the NBMC through a City permit/license process. The City also accepts the California Department of Justice ("DOJ") permit applications and fees on DOJ's behalf for pawnbroker and secondhand dealer applications as well as application renewals. The application and fees are then mailed to the DOJ. The City's 3-1 Introduction of Ordinance No. 2016-10 Amending Chapter 5.20 of the NBMC Entitled Pawnbrokers, Secondhand Dealers and Junk Dealers July 12, 2016 Page 2 Police Department is responsible for keeping records of any pawnbroker and secondhand dealer transactions from establishments in the City and Newport Beach residents conducting pawn and secondhand dealer transactions in other jurisdictions. NBMC Chapter 5.20 also regulates how certain pawnbroker and secondhand dealer transactions must be reported to the City, how long pawnbroker and secondhand dealer records and articles must be kept, and the hours of operation of pawnbrokers and secondhand dealers. In August 2012, Governor Brown signed Assembly Bill No. 391 (Pan) ("AB 391") into law. AB 391 requires that the City's Chief of Police accept applications for and grant licenses for pawnbrokers and secondhand dealers, and sets forth the instances when the Chief of Police may revoke or refuse to issue such licenses. AB 391 also mandated that DOJ develop and implement a single, statewide, uniform electronic reporting system for pawnbroker and secondhand dealer transactions, which has come to be known as the California Pawn & Secondhand Dealer System ("CAPSS"). CAPSS is paid for, implemented and maintained by fees paid to the DOJ by pawnbrokers and secondhand dealers pursuant to the provisions of AB 391. CAPSS requires licensed pawnbrokers and secondhand dealers to register their business, obtain specific equipment (computer with Internet access, fingerprint scanner and an electronic signature pad) and report tangible personal property transactions all through its online system. In October 2015, the Police Department and licensed pawnbrokers and secondhand dealers were notified by the DOJ that the CAPSS was being implemented in Orange County. The Police Department is in favor of the CAPSS program. One of the goals of the CAPSS is to replace the current paper reporting method for transactions with a statewide electronic reporting system, which greatly reduces storage costs of paper reports. CAPSS also helps law enforcement agencies in their investigatory efforts related to the identification and location of stolen property. CAPSS accumulates information statewide, unlike the current hard copy system where police employees only have access to information specific to the City of Newport Beach. CAPSS streamlines the entire reporting process, making it much easier to find information. Given the newly implemented State law requirements of pawnbrokers and secondhand dealers promulgated by AB 391 and the changes to the new reporting requirements through the CAPSS, the City has updated its regulations of pawnbrokers and secondhand dealers and junk dealers found in NBMC Chapter 5.20. The purpose of Ordinance No. 2016-10 is to update the City's regulations of pawnbrokers, secondhand dealers and junk dealers to correspond with recent updates to state law and to remove outdated requirements throughout Chapter 5.20. By adopting the Ordinance, Chapter 5.20 will regulate pawnbrokers, secondhand dealers and junk dealers in a manner consistent with State law and modern police practices (Attachment A). Attachment B is the redline version of the proposed changes to the ordinance. 3-2 Introduction of Ordinance No. 2016-10 Amending Chapter 5.20 of the NBMC Entitled Pawnbrokers, Secondhand Dealers and Junk Dealers July 12, 2016 Page 3 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 3-3 Introduction of Ordinance No. 2016-10 Amending Chapter 5.20 of the NBMC Entitled Pawnbrokers, Secondhand Dealers and Junk Dealers July 12, 2016 Page 3 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 Attachment B - Redline of Ordinance 3-3 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 facility 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 tax evasion."; and 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, operating, and maintaining CAPSS; and (4) require applicants for a licensure to submit 3-4 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. 5.20.110 Reserved. `r� 3-5 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 Pawnshop Defined. The term "pawnshop" means any room, store, or place in which 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. K 3-6 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. El 3-7 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 fall, 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 other offense involving stolen 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.- 1. earing: 1. 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" cW 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 or Call for Review. Any person aggrieved by the action of the Chief of Police in the denial of an application for permit or renewal 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 or call for review and notice of such hearing shall be given to the appellant in the same manner as provided in subsection (G) of this section for notice of hearing on revocation. The decision of the City Manager on such appeal or call for review 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 PermitfUcense 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 0 3-9 applying to carry on the business of pawnbroker, junk dealer, or 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 Justice to the Department of Justice. 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. 5.20.070 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 21606 or any successor statute thereto on the form prescribed by the Department of Justice, including Form BCIA 127 "Record of Junk Sale or Purchase" or any successor form thereto. 7 3-10 5.20.080 Records Required to be Kept. 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. E 3-11 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 business of pawnbroker, secondhand dealer, or junk dealer, 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 or Sunday, and the hour of seven o'clock in the forenoon of the following day. 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 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 0 3-12 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, subsections, sentences, clauses or phrases be declared 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 10 3-13 DIANE B. DIXON, MAYOR APPROVED AS TO FORM: THE CITY ATTORN Y'S OFFICE 'z�`j�t3f AARON C. HARP, CITY ATTORNEY ATTEST: LEILANI I. BROWN, CITY CLERK 11 3-14 ATTACHMENT B 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 facility 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 tax evasion."; and WHEREAS, California Business and Professions Code Section 21638 provides that Galdforn'a Business and Professions Code seGtieR 21625 et seq.'s regulations of senonidhanld dealers de not nrehihit the City of Newport Beach ("City") may enact regulations of secondhand dealers and pawnbrokers that are from enontinn omeRdinn or enfordRq anyfocal erd+oa-noe 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 GaR processes requests for licenses to engage in the business of pawnbroker,- s define �'�-ii a', COG�SeGtie -24899; and WHEREAS, California Business and Professions Code Section 21600 et seq. regulates ^rp-S Eertain state law regulations of - ens sof- junk dealers Galifernia Business and Professions (Fede SeGti r 'l-rvvT 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"), w�hiGh beEa„me-offeEti�' '2 (Pan) �, 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 3-15 ("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, operating, and maintaining CAPSS; 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 intente of this Ordinance is to update the City's regulations of pawnbrokers, secondhand dealers, and junk dealers to implement the Legislature's+, I liqht of such— ' 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. 04 3-16 5.20.080 Records Required to be Kept. 5.20.090 Failure to Comply Unlawful. 5.20.100 Disposition of Articles. 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 Pawnshop Defined. The term "pawnshop" means any room, store, or place in which 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 et 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 3 3-17 and receiving a permit or license (hereinafter referred to as "permit") therefor from the Chief of Police. 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 0 3-18 whether or not the requirements of this Chapter have been satisfied. 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 fall, 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 other offense involving stolen 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: 1. 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 0 3-19 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" 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 or Call for Review. Any person aggrieved by the action of the Chief of Police in the denial of an application for permit or renewal 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 or call for review and notice of such hearing shall be given to the appellant in the same manner as provided in subsection (G) of this section for notice of hearing on revocation. The decision of the City Manager on such appeal or call for review 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 3 3-20 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 secondhand dealer, as a separate business.gn4—te= Gl4eGt— � transmi# 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 GGIIeGt and transrng 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 Justice to the Department of Justice. 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. 5.20.070 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 7 3-21 California Business and Professions Code Section 21606 or any successor statute thereto on the form prescribed by the Department of Justice, including Form BCIA 127 "Record of Junk Sale or Purchase" or any successor form thereto. 5.20.080 Records Required to be Kept. 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 3-22 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. 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 business of pawnbroker, secondhand dealer, or junk dealer, 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 or Sunday, and the hour of seven o'clock in the forenoon of the following day. 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 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. 7 3-23 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 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, subsections, sentences, clauses or phrases be declared 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 1240th day of July", 2016, and adopted at a regular meeting of the City Council of Newport Beach, held on the 2624th day of July", 2016, by the following vote, to wit: AYES, COUNCILMEMBERS 10 3-24 NOES, COUNCILMEMBERS ABSENT COUNCILMEMBERS DIANE B. DIXON, MAYOR APPROVED AS TO FORM: THE CITY ATTORNEY'S OFFICE AARON C. HARP, CITY ATTORNEY ATTEST: LEILANI I. BROWN, CITY CLERK 11 3-25 July 12, 2016 Item No. 3 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 fax evasion. and 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, operating, and maintaining CAPSS; 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. 2 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. . awnshop Defined. 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 et 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. 3 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 theapplicant 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. 13 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 -other- offense--involving—stolen — ---- 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: 1. 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" I 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 renewal _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 C 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 Justice_ to the Department of Justices._ 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. 5.20.070 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 21606 or any successor statute thereto on the form prescribed by the Department of Justice, including Form BCIA 127 'Record of Junk Sale or Purchase" or any successor form thereto. 7 5.20.080 Records Required to be Kept. 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. `1 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 --business of pawnbroker, secondfiand- dealer, or Junk dealer, 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 0 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,_subsections,_sentences, _clauses or phrases be declared 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, COUNCILMEMBE ABSENT COUNCILMEMBERS 10 DIANE B. DIXON, MAYOR APPROVED AS TO FORM: THE CITY RNEY'S OFFICE �r AARON C. HARP, CITY ATTORNEY ATTEST: LEILANI I. BROWN, CITY CLERK 11 AMENDED REDLINE ATTACHMENT B 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 and jYRk r^fleGt0r Defined. 5.20.050 Permits/Licenses. 5.20.060 Permit/License Fees. 5.20.070 Reports to Police. Reporting of Transactions. 5.20.080 Records Required to be Kept. 5.20.090 Failure to Comply Unlawful. 5.20.100 Disposition of Articles. 5.20.110 Exempt T-FaRSaGt;^„S.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. e 0 e C too. -*e-_ The term "pawnbroker"ng as is defined in California••- • 111 or successor statute thereto 5.20.020 Pawnshop Defined. The term "pawnshop" means any room, store, or place in which business or activity described in Section 5.20.010 is engaged in, carried on., or conducted. 5.20.030 Secondhand Dealer Defined. A. Definition. term "secondhand dealer" shall have the same meaning as that term is defined and limited in California Business and Professions Code SeetoonSections 21626 and 3-26 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 et seq. or successor statutes thereto shall also be exemat from beina considered a "secondhand dealer" by this Chapter. 3-27 ib w*1 •••, ••_• e e •- e .. MIN 11_ - .... -- 1 11 _ 3-27 • 11 - •—th • 1 1-p—r-liftlo e e - .• b. - • • • • • - . • • • - M22 r2T21Mff.-.r-qWM—MT-1M2-1 • • • . • W. 5.20.040 Junk Dealer and junk Collector 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. A. Requirement. No person shall engage in, conduct, manage or carry on the business of a pawnbroker, junk dealer, i„nl, ^011e^+.,r 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 city MaRagor. Sand permit chafe 0ssued by the �v Ma Ragor but only offer having r^^ ied a repGT4 rr.��'�-vy-crrc-� ��vrarrug.., , c._,r-nrsvrrrg� ccei�rca-cTTcpvrc of investigation from the Chief of Police. 3-28 e e - .• r M22 r2T21Mff.-.r-qWM—MT-1M2-1 MW1, 1 ME • r •WINV 11, 1- • • • - • r.TZ&7- 5.20.050 Permits. A. Requirement. No person shall engage in, conduct, manage or carry on the business of a pawnbroker, junk dealer, i„nl, ^011e^+.,r 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 city MaRagor. Sand permit chafe 0ssued by the �v Ma Ragor but only offer having r^^ ied a repGT4 rr.��'�-vy-crrc-� ��vrarrug.., , c._,r-nrsvrrrg� ccei�rca-cTTcpvrc of investigation from the Chief of Police. 3-28 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 The lengof}ime for whiGh a permit ic��iTcd; 43. A statement as to whether or not the applicant holds or has held aany 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; 54. 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 1 i 3-29 b siRess resnensihilit i of the -a-p-pliGa ;t}h � nacrtable arR mae'tlga}er to nrenerly evalua}LLS,U,nh�Meral GharaaGteF-aarRd b iciness respOrlsihilib 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.MaRageF shall forthwith re of '• :• • applicant'sdesignee shall cause to be made such investigation of th of th deems ReGeSsary for the .. -: an -application for•- GIANA, 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; within a reasonable torne- and shall make a written report to the City Manager within thirty (30) days arld shall Ger}ify in sand repo within ninety (90) that certifies whether or not the b is ss respensihility of the oapnpliGaRt is sati�UG e requirements of this Chapter have been satisfied. 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 fall, refuse or neglect to do so. Manager11 In F. Revocation or Refusal. A 1—Y - by the Gity Managerrenewal Of SUGh permit may be refused by the Gity determines after n0tiGe and h 3-30 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 other offense involving stolen 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 Dermit may be Drohibited if the Chief of Police determines after notice and hearina: That the business was not carried on onlv 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 desianated on the Dermit onlv 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 Dattern 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" 3-31 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 a t er-permit holder has violated aRy-of } ti Ft statut�� Stateof C-Alifernia relatiR to the aGtiviti .. engaged in by the appliGant; not fully and truthfully filed a renewal application and paid the permit renewal fee specified by the City. GG. Appeal or Call for Review. Any person aggrieved by the action of the Chief of Police in the denial of an application for permit or renewal 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 or call for review and notice of such hearing shall be given to the appellant in the same manner as provided in subsection (G) of this section for notice of hearing on revocation. The decision of the City Manager on such appeal or call for review 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 3-32 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. RTAI M. -. ranymm .. 2MM.M.WA -. . -._. .._ ._ , - 5.20.060 Permit/License Fees. Every person eea g or carryingentity applying to conduct or carry on the business of a pawnbroker, junk dealer, ;,ink G011e +^r or secondhand dealer, as a separate business, shall pay an annualinitial license application fee asto 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 secondhand dealer, as a separate business the fee charged by the Department of Justice for its processing of the application. The Cites 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 3-33 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 apDlication. The Citv shall transmit the fee charaed by the Department of Justice to the Department of Justice. 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. 5.20.070 Reports to PolliceReporting of Transactions. A. Reaortina Reauirement 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 anv successor statutes thereto. WAR - ill I!- lie. •• e e - e - e ._ _. .. 5.20.070 Reports to PolliceReporting of Transactions. A. Reaortina Reauirement 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 anv successor statutes thereto. B. Confidentiality. The Chief of Police shall cause all reports received pursuant to the terms of this se«oosubsection (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. 3-34 true and GE)rnplete 111,11,111111 11"I'Midl U,, - ill B. Confidentiality. The Chief of Police shall cause all reports received pursuant to the terms of this se«oosubsection (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. 3-34 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 21606 or any successor statute thereto on the form prescribed by the Department of Justice, including Form BCIA 127 "Record of Junk Sale or Purchase" or any successor form thereto. 5.20.080 Records Required to be Kept. Unless federal or state law requires a shorter time period, €every pawnbroker; and secondhand dealer, junk dealer and junk GGlleGtGF 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 anv 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, jURk dealer or junk Eettec-terdealer, 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 3-35 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 makina the authorization. B. No junk dealer OF jURk GGlleGtG 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 er i„nl, GGlleGter for a period of three days from the date of pledge or purchase thereof. 5.20.110 Exempt Transacti^"-sReserved. ikf ax calm! fax orrn,& hoc hoon reg stered in California as required by law RecaY\/Pri 5.20.120 Hours of Operation. No person engaged in, conducting, managing or carrying on the business of pawnbroker, secondhand dealer, junk dealer or junk G„Il�ordealer, 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 f^�;mornin of the following Monday, or between the hour of seven o'clock in the afternoon of any day, other than Saturday or Sunday, and the hour of seven o'clock in the forenoon of the following day. 3-36 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 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 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. 3-37 July 12, 2016 Item No. 3 ATTACHMENT B 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 facilitatefaGility 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."; and 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, operating, and maintaining CAPSS; 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 and junk Gehl^+„r Defined. 5.20.050 Permits/Licenses. 5.20.060 Permit/License Fees. 5.20.070 Reports to Pei ice. Reporting of Transactions. 5.20.080 Records Required to be Kept. 5.20.090 Failure to Comply Unlawful. 5.20.100 Disposition of Articles. 5.20.110 Exempt TFansa tions 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. IZI - --- ONE The term "pawnbroker" shall have the same meani• as that ter is defined in California••- Section 21000 or arM successor statute thereto 5.20.020 Pawnshop Defined. 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. A. Definotmen. 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 anv successor statutes thereto. Anv Derson or entitv exempt from being considered a "secondhand dealer" pursuant to California Business and Professions Code Section 21625 et seg. or successor statutes thereto shall also be exempt from being considered a "secondhand dealer" by this Chapter. ic. - 5.20.040 Junk Dealer and junk ColleGtor Defined. The term "junk dealer" shall have the same meaning as that term is defined in California Business and Professions Code Section 21601 or anv successor statute thereto. .. ._ .. .. .. .. ... _.. ._ Ilk . . _ pr_ r . A11114,1111410 MI-11111111,11, 1 11 • MUM.HIM I WIN _ #1 ~1'1 11 _ � r [-TS1111WIT_• ._ . u • •_ •. . _ 5.20.040 Junk Dealer and junk ColleGtor Defined. The term "junk dealer" shall have the same meaning as that term is defined in California Business and Professions Code Section 21601 or anv successor statute thereto. 5.20.050 Permits. A. Requirement. No person shall engage in, conduct, manage or carry on the business of a pawnbroker, junk dealer, junk ^^"o^+.,r 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 Git„ Manager. Said permit shelve 0s shh ued am+ e City Manager, t ^pl after havingTeGeived a recPOA Of ip„estigation frem the Chief of Police. 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. The IeRgth f time fer hiGh a permit is desire 43. A statement as to whether or not the applicant holds or has held aany 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 _ r . ------ WE_ 5.20.050 Permits. A. Requirement. No person shall engage in, conduct, manage or carry on the business of a pawnbroker, junk dealer, junk ^^"o^+.,r 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 Git„ Manager. Said permit shelve 0s shh ued am+ e City Manager, t ^pl after havingTeGeived a recPOA Of ip„estigation frem the Chief of Police. 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. The IeRgth f time fer hiGh a permit is desire 43. A statement as to whether or not the applicant holds or has held aany 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; 54. 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 business responsihilib 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 City Manager forthwiths,halrefer the c-aTntfer agormit to the—Chief of Police whoor his or her designee shall cause to be made such investigation of the applicant's moral GharaaGter and business responsibility ty ashe application for he applinant'c rn.. business responsibility has previously been determine, 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, within a -reasonable time and shall make a written report to the Gity Manager within thirty (30) days and shall nertify in sand repo rtwithin ninety (90) that certifies whether or not the moral GharaGter and business rresponsibility of the annliGant is satisfaeteryE quirements of this Chapter have been satisfied. 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 failfaf4, refuse or neglect to do so. F. Bevocation or Refusal. A permit issued hereunder may hM- KA 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 other offense involving stolen property or that the permit holder engaged in any act which the rmit holder knows to be in violation of this Chaoter 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 followina 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 Dermit may be prohibited if the Chief of Police determines after notice and hearing: 1. 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 That the Dermit or a coav thereof, issued by the Newport Beach Police Department, was not displayed on the premises in Dlain view of the Dublic: 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" 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 iudgment 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 anv successor statute thereto; or 5. That the appliGant or permit holder has vielate d any !,f the —statutec�State of GaUGFnia relatingto the aGtivitie-s engage' in by the applicant; ernot fully and truthfully filed a renewal application and paid the permit renewal fee specified by the City. GG. Appeal. Any person aggrieved by the action of the Chief of Police in the denial of an application for permit or renewal 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. Every person conducting or carryingentity applying to conduct or carry on the business of a pawnbroker, junk dealer, junk rnllon+nr or secondhand dealer, as a separate business, shall pay an a-R-n-u-aflnitial license application fee asto 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 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 Deaartment of Justice to the Deaartment of Justice. 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. 5.20.070 Reoorts to o„li„eRer)ortina of Transactions. A. Reaortina Reauirement 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 anv successor statutes thereto. a �oll m�Le ni t Jnr: deliver to the DnliGDepe�rtment a full, true and Gernnplete report the form and Gentents of which ri Gerriply with provisions of California Business and Drnfessienss, CedeCede Gt `J1628 nnrl 21621 The repert_shall he submitted as eCtl��i—c-ry � i-rcr�Tvv�rriti-r`_' �r' `_' �. �_ shall �.urrrn�t��rrrrrr rens -d by SeGtinn 21632 B. Confidentiality. The Chief of Police shall cause all reports received pursuant to the terms of th-i ii -e fasubsection (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 21606 or any successor statute thereto on the form prescribed by the Department of Justice, including Form BCIA 127 "Record of Junk Sale or Purchase" or any successor form thereto. 5.20.080 Records Required to be Kept. Unless federal or state law requires a shorter time period, €every pawnbroker; and secondhand dealer, ii ink dealer and junk nellenter 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 iunk dealer shall comply with the records preservation requirements of California Business and Professions Code Section 21607 or anv 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, junk dealer or junk GolleGtordealer, 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. B. No junk dealeror�k GelleEte 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 or junk collector for a period of three days from the date of pledge or purchase thereof. 5.20.110 Exempt Transa^*i^"c Reserved. RPCPrx/P_rl 5.20.120 Hours of Operation. No person engaged in, conducting, managing or carrying on the business of pawnbroker, secondhand dealer, junk dealer or junk ^^"�tordealer, 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 foreneenmorning of the following Monday, or between the hour of seven o'clock in the afternoon of any day, other than Saturdayor Sunday, and the hour of seven o'clock in the morning#ereneen 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. .. RPCPrx/P_rl 5.20.120 Hours of Operation. No person engaged in, conducting, managing or carrying on the business of pawnbroker, secondhand dealer, junk dealer or junk ^^"�tordealer, 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 foreneenmorning of the following Monday, or between the hour of seven o'clock in the afternoon of any day, other than Saturdayor Sunday, and the hour of seven o'clock in the morning#ereneen 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 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, subsections, sentences, clauses or phrases be declared 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 DIANE B. DIXON, MAYOR APPROVED AS TO FORM: THE CITY ATTORNEY'S OFFICE AARON C. HARP, CITY ATTORNEY ATTEST: LEILANI I. BROWN, CITY CLERK