Goleta Municipal Code Ch. 5.03 Secondhand Dealer Regulations

These secondhand dealer regulations are established pursuant to the authority granted to the City pursuant to Article XI, Section 7 of the California State Constitution and Section 21638 of the California Business and Professions Code.

(Ord. 02-01 § 1)

The regulations contained in this chapter shall apply to all persons who hold a secondhand dealer permit in the City issued pursuant to California Business and Professions Code Section 21641 (hereinafter “permittee”) and to their employees and agents. Secondhand dealers shall include, but not be limited to, pawnbrokers.

(Ord. 02-01 § 1)

The following definitions shall govern the construction of this chapter:

“Pawnbroker”

means every person engaged in the business of receiving goods in pledge as security for a loan, or as otherwise defined in Financial Code Section 21000.

“Person”

includes individuals, co-partnerships, firms and corporations.

“Police Chief”

means the Goleta Police Chief.

“Secondhand dealer”

means any “person” whose principal business is primarily that of engaging in buying, selling, trading, taking in pawn, accepting for sale on consignment, accepting for auctioning or auctioning secondhand tangible personal property; any person who engages in the business of buying or selling secondhand tangible personal property in excess of 20% of the gross sales and purchases of goods or merchandise sold or purchased in the regular course of business; but not including persons performing the services of an auctioneer for a fee or salary; provided that this definition shall be automatically amended to conform to amendments in Business and Professions Code Sections 21626 and 21626.5.

(Ord. 02-01 § 1)

A. Every permittee shall ensure compliance by his or her employees or agents with these regulations. Violation of these regulations by the permittee, or by an employee or agent of the permittee, is grounds for administrative action against the permittee as provided for in this chapter.

B. No person under the age of 18 shall be allowed to pledge, sell or trade any item of property.

C. Any person who desires to pawn, sell or trade any item of property must, before said transaction is complete, display acceptable identification. Only the following forms of identification are acceptable:

1. Valid driver’s license; or

2. Valid identification card issued by the California Department of Motor Vehicles; or

3. Valid identification issued by a federal, state or local government or agency which contains a photograph or complete physical description of the issuee.

a. The evidence of identification must contain a complete address of the issuee. Identification which contains a post office box only is insufficient for purposes of these regulations.

b. The secondhand dealer permittee, employee or agent who serves a customer shall ensure that the identification proffered by the customer reasonably substantiates the identity of the customer in that the evidence of identity and the physical description of the customer proffering the identification appear to agree.

c. If the customer does not have any of the types of identification listed in subdivisions 1 through 3 of this subsection, then the secondhand dealer permittee, employee or agent may accept a social security card as identification, provided the customer proffering the social security card is personally known to the secondhand dealer permittee, employee or agent.

d. When the customer’s identity has been established by the secondhand dealer permittee, employee or agent, in accordance with this subsection, the customer shall be required to give, and the pawnshop permittee, employee or agent serving the customer shall obtain, before the transaction is completed, a plain fingerprint impression of the right index finger or, if the customer’s right index finger is missing, another of his or her fingers with a designation of which finger is used. The fingerprint impression shall be placed on the second copy of the report of property which is required to be submitted to the Police Department.

D. No item of property shall be accepted by the permittee, employee or agent, by way of pledge, purchase or trade, from which the serial number appears to have been removed or altered.

E. All pledges, purchases and trades, and all items of property accepted on consignment, shall be entered in a permanent record, on the transaction slips and on the report of property which is submitted to the Police Department. This requirement applies both to items received on the permittee’s premises and to items received off the premises, but within the City.

F. The permittee shall number each pledge, purchase, consignment or trade consecutively, in order of date and time of receipt.

G. Every item of property received by way of pledge, purchase, consignment or trade, whether received on or off the permittee’s premises but within the City, shall be reported monthly to the Police Department on approved forms.

1. This report shall be completed in full, legible, and in the English language.

2. An exact duplicate of the form shall be kept on the permittee’s premises.

3. The description of the property on the report shall contain the following, if applicable, to the extent ascertainable:

a. Type of item;

b. Manufacturer’s name;

c. Trade name;

d. Serial number (if none, enter “no serial number”);

e. Model number;

f. Inscriptions, if any;

g. If jewelry, approximate number of carats;

h. If jewelry, type and color of stone;

i. If jewelry, type of mounting;

j. If jewelry, type and color of metal;

k. If jewelry, type of cutting;

l. If jewelry, length and thickness of chain or bracelet;

m. Any other peculiarity which may serve to identify the item.

4. No permittee shall receive, hold or keep on his or her premises any item of property which is not or was not reported to the Police Department within 24 hours after receipt.

H. Pursuant to Section 21203 of the California Financial Code, every permittee shall keep a record of each sale of an item of property which shall include the information required in subsection (G)(3) of this section.

I. Every permittee shall display, in a conspicuous location on his or her premises, the following:

1. Current, valid license;

2. Secondhand dealer permit; and

3. Interest rates charged. This information shall be in letters at least two inches in height.

J. The permanent record, all transaction slips, and all reports of property received shall be completed legibly.

K. The permanent record, all transaction slips, and all reports of property received shall be maintained on the permittee’s premises, in such a way that access to a particular record is not unreasonably difficult or time-consuming, for a period of three years. All such records shall be open to inspection, during regular business hours, upon demand by any police officer or enforcement officer.

L. Pursuant to Section 21206 of the California Financial Code, each permittee shall allow any police officer or enforcement officer, during normal business hours, to conduct an inspection and/or audit of any property and all business records on the premises, pertaining to the secondhand dealer business.

M. Each borrower shall be given a copy of the written contract of pledge.

N. Regulations in subsections C through H of this section shall not apply to property purchases of permittee for which he or she has an original invoice from the distributor or manufacturer.

(Ord. 02-01 § 1)

In addition to any other remedy provided by law, any permittee who violates, or whose employees or agents violate, any of the foregoing regulations may subject the permittee to suspension or revocation of his or her secondhand dealer’s permit by the City.

(Ord. 02-01 § 1)

If the City desires to suspend or revoke the permit of a secondhand dealer, the following process shall apply:

A. Notice. The City shall give a notice of intention to revoke or suspend a secondhand dealer’s license to the permittee and the City Manager in writing by mailing or delivering a copy of such notice to the permittee specifying the reasons for suspension or revocation in sufficient detail to fully inform the permittee of the reasons which have caused the notice to be given. The notice shall specify the date, time, and place at which a hearing will be held by the City. The hearing shall be conducted not less than seven days after the date of the notice, unless the permittee consents to a shorter period of time. Unless the permittee consents to a longer period of time, a hearing must be held within 10 days of a suspension. Pending a revocation hearing, the City may suspend a secondhand dealer’s permit to operate upon a determination of reasonable cause to believe the permittee has violated any of the provisions this chapter, Business and Professions Code Section 21642, or other applicable provision of state law.

B. Hearing Procedure. The permittee and the City shall each have the right to be represented by counsel, to call and examine witnesses, and to argue their respective positions. The proceedings shall be informal, and strict rules of evidence shall not apply. All evidence shall be admissible which is of the kind that reasonably prudent persons rely on in making decisions.

C. Decision. The Hearing Officer shall render the decision in writing and include the reasons therefor. The decision shall notify the permittee and the City Manager of their rights to appeal. An appeal does not stay the decision.

D. Appeal. The permittee or City Manager may appeal the decision on suspension or revocation to the City Council by filing an appeal in writing within 15 days after such decision. After receipt of an appeal, the City Clerk shall set a date, time and place within 30 days after receipt of the appeal (or such longer period as to which the appellant consents) to hear the matter. The City Clerk shall notify the permittee and the City representative, of the date, time and place of the hearing.

E. Conduct of Appeal Hearing. The City Council may issue subpoenas as provided in Government Code Section 25170 at the request of either the permittee or the City, for witnesses to appear at the hearing, with or without specified documents. All testimony at the hearing shall be given under oath or affirmation. The permittee and the City shall have the right to be represented by counsel. Permittee and City shall each have the right to call and examine witnesses, cross-examine witnesses, and argue their respective positions. The proceeding shall be informal and the strict rules of evidence shall not apply, and all evidence shall be admissible which is of the kind that reasonably prudent persons rely on in making decisions.

(Ord. 02-01 § 1)