HomeMy WebLinkAbout2016-10 - Amending Newport Beach Municipal Code Chapter 5.20 Entitled “Pawnbrokers, Secondhand Dealers and Junk Dealers”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"
WHEREAS, California Business and Professions Code Section 21625 reflects the
intent of the California Legislature to regulate pawnbrokers and secondhand dealers "to
curtail the dissemination of stolen property and to facilitate the recovery of stolen property
by means of a uniform, statewide, state -administered program of regulations of persons
whose principal business is the buying, selling, trading, auctioning, or taking in pawn of
tangible property and to aid the State Board of Equalization to detect possible sales tax
evasion.'; 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.;
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;
WHEREAS, California Business and Professions Code Section 21600 et seq.
regulates junk dealers;
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;
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;
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
Ordinance No. 2016-10
Page 2 of 10
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.
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.
Ordinance No. 2016-10
Page 3 of 10
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 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.
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.
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;
Ordinance No. 2016-10
Page 4 of 10
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.
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
Ordinance No. 2016-10
Page 5 of 10
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" 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
Ordinance No. 2016-10
Page 6 of 10
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 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.
Ordinance No. 2016-10
Page 7 of 10
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.
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
Ordinance No. 2016-10
Page 8 of 10
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 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, and
the hour of seven o'clock in the morning of the following day, other
than Sunday.
Ordinance No. 2016-10
Page 9 of 10
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.
Ordinance No. 2016-10
Page 10 of 10
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 Council Member Peotter, Council Member Duffield,
Council Member Selich, Council Member Curry, Council Member Petros,
Mayor Pro Tem Muldoon, Mayor Dixon
NAYS
ABSENT
J
IANE B. DIXON, MAYO
ATTEST:
YflVV\--
CLERK
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
4—r
AARON C. HARP, CITY ATTORNEY
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the
whole number of members of the City Council is seven; that the foregoing ordinance, being Ordinance
No. 2016-10 was duly and regularly introduced on the 12th day of July, 2016, and adopted by the City
Council of said City at a regular meeting of said Council, duly and regularly held on the 26th day of July,
2016, and that the same was so passed and adopted by the following vote, to wit:
AYES: Council Member Peotter, Council Member Duffield, Council Member Selich,
Council Member Curry, Council Member Petros, Mayor Pro Tem Muldoon,
Mayor Dixon
NAYS: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of
said City this 27th day of July, 2016.
c
PO
Leilani I. Brown, MMC
O4 City Clerk
>- City of Newport Beach, California
s `
P (Seal)
COLI F0
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, LEILANI I. BROWN, City Clerk of the City of Newport Beach, California, do hereby certify that
Ordinance No. 2016-10 has been duly and regularly published according to law and the order of the City
Council of said City and that same was so published in The Daily Pilot, a newspaper of general circulation
on the following dates:
Introduced Ordinance: July 16, 2016
Adopted Ordinance: July 30, 2016 �,�,
In witness whereof, I have hereunto subscribed my name this / V! day of
2016.
SEW Pp
lip c r(
n Leilani I. Brown, MMC
U City Clerk
City of Newport Beach, California
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(Seal)