Los Altos Municipal Code Ch. 4.32 Secondhand Dealers

The purpose and intent of this chapter are to require a permit and the reporting of transactions involving identifiable secondhand tangible personal property by persons, partnerships, or corporations who, in the course of their business, buy, sell, trade, auction, take in pawn, or take on consignment any secondhand tangible personal property. This chapter is intended to supplement and be consistent with Article 4 of Chapter 9 of Division 8 of the Business and Professions Code of the state, as amended from time to time, or successor legislation.

(Prior code § 6-4.01)

It shall be unlawful for any person, partnership, or corporation to engage in, conduct, manage, or carry on the business practice, profession, or occupation of secondhand dealer as defined in this chapter without first applying for and receiving an annual secondhand dealer's permit from the city. The possession of a valid license under Article 4 of Chapter 9 of Division 8 of the Business and Professions Code of the state, as amended from time to time, or successor legislation, shall be deemed compliance with this section and Sections 4.32.040 and 4.32.050 of this chapter. It shall be unlawful for any permittee or licensee to violate any of the provisions of this chapter.

(Prior code § 6-4.02)

For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:

A.

"Secondhand dealer" shall mean and include every person who engages in the business of auctioning, buying, selling, taking in pledge or pawn, loaning money upon, trading, or exchanging, whether as a separate business or in connection with other business, secondhand property (such as business machines defined in Section 21628.5 of the Business and Professions Code of the state), jewelry, precious stones, gold or silver utensils or articles, valuables, cameras, watches, or firearms, bearing serial numbers or personalized initials or inscriptions, or which bear evidence of having had such identification thereon. "Secondhand dealer" shall not include secondhand automobile dealers, automobile wrecking establishments, and gift exchange establishments whose business consists exclusively of the exchanging of new and unused personal property for some other type of new and unused personal property, with or without the payment of a reasonable fee for the exchange services rendered, banks, savings and loans, finance companies, and other organizations regulated by law.

B.

"Permit" or "permittee" shall mean and include a permit and the holder thereof, under this chapter, and a license or a licensee under Article 4 of Chapter 9 of Division 8 of the Business and Professions Code of the state, as amended from time to time, or successor legislation.

(Prior code § 6-4.03)

An applicant desiring a permit required by this chapter shall file a written application with the finance department on a form furnished by the city, setting forth the information listed thereon, and shall also pay a nonrefundable fee of one hundred dollars ($100.00). Thereafter, an annual fee of fifty dollars ($50.00) shall be due and payable before the renewal of such permit.

(Prior code § 6-4.04)

A.

Upon receiving an application for a permit to engage in business as a secondhand dealer, the finance director shall refer the application to the chief of police or his designee for an investigation.

B.

The chief of police or his designee shall conduct an investigation, which may include an interview. A permit will be issued if the applicant is in full compliance with this chapter and is not in violation of any provision of this code.

(Prior code § 6-4.05)

Any permit issued, together with the privileges conferred thereby, to a person to engage in business as a secondhand dealer shall be nontransferable, and any attempt to transfer such permit to any other person, business, corporation, or organization shall be void and shall be cause for the revocation of such permit.

(Prior code § 6-4.06)

No permit required by this chapter shall be deemed to authorize the conduct of such business at any location other than the specific location set forth in the application for such permit. The conduct of any such business at a location other than that specified in such application shall be unlawful. No permit will be renewed for a location other than that for which the previous permit was issued without prior notification to the chief of police.

(Prior code § 6-4.07)

Any secondhand dealer's permit application pursuant to this chapter may be denied by the chief of police or his designee after a notice and hearing for any of the following reasons:

A.

Fraud, misrepresentation, or a false statement in the application for the permit;

B.

Fraud, misrepresentation, or a false statement made in the course of carrying on the business regulated by this chapter prior to the application being made;

C.

The applicant has been convicted of a misdemeanor or felony within the past three (3) years if the misdemeanor or felony is substantially related to the qualifications, functions, or duties of a secondhand dealer. In all cases where a permit is denied, the chief of police or his designee shall notify the applicant in writing of the grounds for denial, and the applicant shall have the right to appeal in accordance with this chapter; and

D.

Any violation of any of the provisions of this chapter or of any other provision of this code relating to any of the business activities conducted or carried on by a secondhand dealer.

(Prior code § 6-4.08)

Every person managing, maintaining, or conducting the business of secondhand dealer in the city shall keep at the permitted place of business:

A.

A permanently bound book containing a record in which shall be legibly entered in the English language, in ink, at the time of every purchase, sale, exchange, pledge, pawn, or other transfer or possession of any article, or loan thereon, a description of such article received or delivered in such transaction sufficient to identify the article, including all particular or prominent marks or identification which may be found on such property, the printed name, signature, age, sex, residence, and accurate description of the vendor or person from whom received, the amount of money paid or received in such transaction, the rate of interest, if any, and the date and time such transaction occurred; or

B.

A hard copy computer printout containing the same information as required by subsection A of this section may be substituted for the bound book. The printout shall be preserved in chronological order by date or transaction number.

(Prior code § 6-4.09)

In addition to the maintenance of a permanent record, every permittee, at the time of taking or receiving any secondhand goods, shall place the description of the article pledged, received, or taken in the appropriate spaces provided on the blank secondhand dealer report provided by the state. The description shall be complete and accurate so as to reasonably aid the police in finding a victim in cases of theft. The permittee shall fill in all appropriate blank spaces as appear on the form. A separate form shall be provided and used for each such article pledged, received, or taken. On such blank form there shall be printed or typewritten the pledger's name and complete street address. No person pledging, pawning, selling, or trading any article shall sign any name other than his true name or give any address other than his true and complete street address.

(Prior code § 6-4.10)

The permittee shall fill in the proper type form for each article pledged, bought, or received. On every business day, on or before the hour of 11:00 a.m., all of such form cards shall be delivered to the chief of police or his designee. The mailing of report forms shall not be compliance with this section.

(Prior code § 6-4.11)

The holding or reporting requirements set forth in this chapter shall not apply to transactions involving coins, monitized bullion, or commercial grade ingots of gold, silver, or other precious metals, nor to purchases from other dealers, provided the provisions of Section 21629 of the Business and Professions Code of the state are met.

(Prior code § 6-4.12)

During all business hours, and at all other reasonable times, the record book and cards shall be open to inspection by the chief of police or any of his designees.

(Prior code § 6-4.13)

A.

All articles purchased, received, exchanged, pledged, or otherwise taken into possession by any permittee shall be segregated, held, and made available for inspection by the police department in the place of business of the permittee for a period of thirty (30) days immediately following the receipt of the same before being sold, exchanged, or removed from the place of business where they were received or delivered, or otherwise disposed of, except that such articles may be delivered or returned to the true owner or to his authorized agent at any time providing no hold has been placed on such articles by any peace officer of the state.

B.

Upon an application, and for good cause shown, the chief of police may authorize the sale, release, or transfer of any article held by a permittee under this section.

(Prior code § 6-4.14)

No permittee shall take or receive any goods, articles, or things from any person without first determining that the person presenting the item for sale, purchase, pledge, or exchange is the owner. The permittee shall require the person to present adequate evidence of authority to dispose of the same. Bills of sale, receipts, bills of lading, and invoices shall be adequate evidence of authority for the purposes of this section providing they identify the owner and describe the item presented. A "Declaration of Ownership Form" provided by the police department may be substituted for a receipt provided the identification requirements of Section 4.32.170 of this chapter are met. A verbal response from the person stating that he is the owner of the item, standing alone, shall not be adequate proof of ownership.

(Prior code § 6-4.15)

No permittee shall take or receive any goods, articles, or things from any person who is in an intoxicated condition, a known receiver of stolen property, or a minor under eighteen (18) years of age.

(Prior code § 6-4.16)

A.

Each permittee shall require one of the following forms of identification from any person from whom he receives or purchases any item or material required to be reported on any secondhand dealer report or recordkeeping required by this chapter. No permittee, employee, or agent shall receive any goods or take any goods in pledge unless he has required and has examined one of the means of the following identification and unless the identification presented does, in fact, match the person presenting it:

A valid driver's license with photograph issued by the state;

A valid California Identification Card with photograph issued by the Department of Motor Vehicles of the state; or

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

B.

The evidence of identification shall contain the complete street address of the issuee. A Social Security card or identification showing only a post office box shall not be in compliance with this section.

(Prior code § 6-4.17)

Any secondhand dealer permit issued pursuant to the provisions of this chapter may be suspended for not more than ninety (90) days, or revoked, for any of the following reasons:

A.

Fraud, misrepresentation, or a false statement contained in the application for the permit;

B.

Fraud, misrepresentation, or a false statement made in the course of carrying on the business regulated by this chapter;

C.

Any violation of this chapter or of any other provision of this Code relating to any of the business activities conducted or carried on by the permittee;

D.

Any violation of any provision of federal, state, or local laws;

E.

The conviction of a felony by a holder of such permit during the period for which the permit was issued;

F.

Anything which would authorize the denial of a new permit if one were applied for; or

G.

Falsification of a secondhand dealer permit or any other document required by this chapter.

(Prior code § 6-4.18)

Any person whose permit has been suspended or revoked, or whose application has been denied, shall have the right to an administrative appeal before the chief of police or his designee. Any unfavorable decision by the chief of police may be appealed in writing, stating the grounds therefor, within ten (10) days after such decision to the city manager. The city manager may hold a hearing at his sole discretion. The decision of the city manager shall be final.

(Prior code § 6-4.19)

Every permittee shall ensure compliance by his manager, employees, or agents with the provisions of this chapter. Any violation of this chapter by an apparent manager, employee, or agent of the permittee shall be grounds for administrative action against the permittee.

(Prior code § 6-4.20)

Every permittee shall post the following in a conspicuous location on his business premises:

A.

A valid State Department of Justice Secondhand Dealer's License or a valid City Secondhand Dealer's Permit; and

B.

The annual interest rates charged. Such information shall be in letters at least two inches in height.

(Prior code § 6-4.21)

It shall be the responsibility of the permittee to purchase the State Department of Justice Transaction Reporting Forms from said Department on an as-needed basis. Failure to utilize an approved State

Department of Justice Reporting Form shall be unlawful.

(Prior code § 6-4.22)