Legislature(2001 - 2002)
04/10/2002 01:18 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 472 - PAWNBROKERS/SECONDHAND DEALERS Number 0991 CHAIR ROKEBERG announced that the last order of business would be HOUSE BILL NO. 472, "An Act relating to persons who buy and sell secondhand articles and to certain persons who lend money on secondhand articles." [Before the committee was CSHB 472(L&C).] Number 1021 LAURA ACHEE, Staff to Representative Joe Green, Alaska State Legislature, sponsor, on behalf of Representative Green, said that under current statute, all secondhand dealers - which is defined as anyone in the business of buying and selling secondhand articles or lending money on secondhand articles - are required to keep a record of every item that they purchase or take in pawn, and as part of that record, they are required to obtain the name, age, address, and signature of the person selling the item. She explained that HB 472 requires that businesses regulated under this proposed statute provide weekly reports of those records to their local police departments. She said the reason Representative Green sponsored HB 472 is that items stolen in a particular community don't always stay there - sometimes items go to other communities; therefore, it is necessary to institute a statewide law. Number 1100 DAVID HUDSON, Captain, Administrative Services Unit, Central Office, Division of Alaska State Troopers (AST), Department of Public Safety (DPS), testified via teleconference in support of HB 472. He said that HB 472 will benefit law enforcement: "It will allow us to increase our ability to track stolen property and ultimately identify a person last in possession of those items." He briefly mentioned that an amendment discussed in a prior committee pertained to defining secondhand brokers, adding that he has not yet seen that language. CHAIR ROKEBERG relayed that a few years ago he had an item stolen from his home. He said that he had difficulties: at that time there was only a "half a person" at the Anchorage Police Department (APD). He asked Captain Hudson what level of manpower he intends to devote to "a detail" to handle this type of crime in the future, and what level is available now. CAPTAIN HUDSON said that currently there is no detail that tracks [stolen property]; there is not a specific person assigned to this task, and the AST does not anticipate assigning anyone to it in the future. What the AST is expecting out of passage of this legislation, he added, is that the information gathered will at least be forwarded to law enforcement so that they can use it when the need arises. CHAIR ROKEBERG asked whether the AST has sufficient hardware and software to "be able to track this if it is not on a diskette or DVD." CAPTAIN HUDSON said that according to his understanding, it has not yet been determined what specific format will be used in forwarding the information to local law enforcement; therefore, he is unable to say at this time whether the AST has the sufficient hardware/software. CHAIR ROKEBERG explained his biggest concern: We're throwing the net out and including a lot of secondhand stores that really haven't had to have [reporting] requirements before, ... whereas pawnshops, usually under municipal ordinance, have them. But secondhand stores like antique shops, secondhand books, although they're excluded, I believe, under the bill -- there's a litany of other types of secondhand shops. ... Are secondhand or used automobiles in any way tracked, currently? CAPTAIN HUDSON said that secondhand vehicles will be exempt from the provisions of HB 472, and are not currently tracked specifically for the purpose of determining whether they are stolen goods. He noted, however, that all vehicles, including secondhand vehicles, are tracked through the Division of Motor Vehicles' registration process, which allows law enforcement to determine whether a vehicle is stolen. Number 1318 DAVE ADAMS testified via teleconference in support of HB 472. He posited that an experience he had ties into the genesis of the bill. He elaborated: My office was burglarized in August of 2000. And I believe that if the bill was in effect at that time, that we may have solved a crime - the theft of some property from my office which is irreplaceable. The appraised value of the theft was about $14,000. I've been talking off and on with ... Anchorage Detective Balega ever since that theft, and one of the problems that he noted was he'd felt like the merchandise had left the city of Anchorage and the pawn records that would work in Anchorage for them to trace the property were not in effect statewide; [the property] probably went to the peninsula or to Palmer/Wasilla area. If the reporting was in effect, we could have traced the material down. ... This is the first time anybody's heard this out loud, what I'm going to say now: Two very personal and valuable items were stolen that are irreplaceable, they cannot be replaced, no amount of money or an act of God could replace these items. However, the criminals saw fit to take some other item with them - and I will not describe it anywhere outside of talking to the police - [that] is highly traceable. And we had hoped over the intervening months that that item would have been taken to a pawnshop. We could've, by finding that item, found our way back to the irreplaceable items that I'll probably never see again. MR. ADAMS concluded: So the scope of a bill like this is much greater than meets the eye. So, I would encourage you to support it. Yes, there may be some cost. If it costs the business people something, well, how many thefts, how [much cost] must the public, like myself - $14,000 - have to bear; if you tracked all of the lost value in un-recovered property, I believe this bill would pay for itself to the public in recovered property. Secondly, it may provide a deterrent effect; these criminals are smart enough to leave Anchorage with the things that they steal here. Well, that's because of the ... [ordinance]. If the ... [concept of the ordinance] goes statewide, there's a good possibility that ... [it'll] have a deterrent effect on the professional criminal that we believe struck my office and property. Number 1487 CHAIR ROKEBERG thanked Mr. Adams for his testimony, and said to him: I'd also like to share with you the fact that a few years back, my wife's engagement ring and her mother's wedding ring and engagement rings were stolen from my household, we think by domestic help. And even though we knew who stole it, and I hired a private detective to run them down, ... I had a great deal of frustration with the Anchorage Police Department because they had a half person assigned.... ... We verified later that my suspicions were correct, but the rings and the jewelry - ... worth in excess of $20,000 - was not recoverable because they dealt them right away for drugs. ... So, those, too, were irreplaceable because of sentimental value.... CHAIR ROKEBERG said that he did not share Mr. Adams's faith that enacting HB 472, only to have the records just sit in a corner of someone's office, will be that helpful, adding that if the proposed reporting requirements could be incorporated into an automated system, he might feel a lot more comfortable with the bill. MR. ADAMS remarked that if Chair Rokeberg were to talk to Detective Balega, he would share that Mr. Adams has a high degree of perseverance regarding this [issue]. "I would go myself and look at those records, as I'm sure at the time you would have also gone to look at the records, even if the department's weren't staffed to do it; the problem is, there's no place for this information to come into one point," he said. Even today, he added, he would gladly go sit down and look at all the records if they'd be brought together. CHAIR ROKEBERG said that is a good point, particularly if "they" could be automated and entered into a database that could be sorted. Number 1574 JERRY CLEWORTH testified via teleconference. He said Word of this bill is just starting to circulate in Fairbanks, and for a lot of us that ... come under this new definition of secondhand dealer, there's a lot of concern. I'll just give you my case. I own a coin shop here in Fairbanks; a lot of the business that I do is bullion-related. This bill in front of you calls for a mandatory 30-day holding period. I think you can imagine what would happen ..., on a day that I buy tens of thousands' worth of bullion. If I can't liquidate it or trade it ... [on] the same day, then there is no point in me buying it, because if I have to hold it for 30 days, one, I'll go broke [and], two, I'm gambling on the price of gold or any other precious metal that's out there. It just can't be done. Buying (indisc.) many of you, I'm scared of the bill because that's about half of my business; I can't operate under such strict restrictions.... Too, if I buy an estate, and a lot of estates are very large, it states in here that if it has a $75 value or more, that I have to itemize each item. I literally can't do that; I don't have the time to do that - run a shop and sell, and then turn that in weekly [to the] local police departments. That presents very severe problems for small businesses. The sponsor statement that you folks have received from Representative Green talks only about pawnbrokers, which I found interesting; it doesn't refer to secondhand dealers at all. MR. CLEWORTH concluded: I've been in business 22 years, and [in] all those years I have only had two instances where I have known of stolen property; both those situations [were] between a child and a parent, [and] ... we interceded for them and recovered [the item]. That is it, [in] 22 years. And we're the only coin shop here in town. This is not a chronic problem that I [can] see. If the idea here is to get pawnbrokers to submit information that could be put on some kind of a computer format that [the] police department can draw up so they can see what was stolen in various parts of Alaska, then I think that's a noble [effort]. But to drag a lot of us into this thing, [there's] some repercussions that I hope that the sponsor of this did not intend. CHAIR ROKEBERG said he shared Mr. Cleworth's concerns regarding the 30-day holding period. To any businessperson, he said, it's like holding and putting your inventory in cold storage for 30 days." It just doesn't work, he added; business owners can't afford to do that. He mentioned that the sponsor [is willing] to create some exemptions, but added that he has concerns should "somebody" be missed. Number 1729 MARGE THOMPSON, Co-owner, Alaskan Photographic Repair Service, testified via teleconference. She said that HB 427 will have a severe impact on her life. Although the aim of HB 427 is to stem the illegal purchase of stolen goods, the broad scope the bill will affect a variety of secondhand shops reselling items such as firearms, watches, cameras, sporting goods, antiques, paintings, boats, and computer equipment. The list will be virtually endless, she warned. If the police and the AST are having trouble shutting down those businesses that buy stolen goods, why then, she asked, are secondhand dealers of all commodities with a $75 retail value also being targeted? MS. THOMPSON said that she did not believe that the paperwork required of the purchaser of secondhand goods is at all reasonable. To have to keep these records on hand for a year and be subject to inspection by law enforcement at any time, she opined, is akin to being treated like a criminal. She posited that the vast majority of secondhand dealers are honest and above reproach. The requirement that she keep goods on hand for a period of 30 days before selling them, she added, will eat up her income substantially; her business is based on turning inventory around quickly. She pointed out that there are many folks who buy merchandise on the Internet; those folks would have no way to gather the information required by HB 472, and no way of verifying past ownership or identity. Internet secondhand businesses would have an unfair advantage over her business, she noted. MS. THOMPSON, in closing, said that she didn't think that the state can afford the process of attempting to enforce this legislation, reiterating that her business cannot afford it either. "Please don't tie our hands behind our back," she asked; stiffer penalties or requirements should apply to those convicted of trafficking in stolen goods, not the honest business owners. "Don't take the honest folks [in] society and make policemen of us all," she added. Number 1832 BEN CARPENTER, Owner, Ben's Super Store, testified via teleconference. He said: I own a large secondhand store in Fairbanks known as Ben's Super Store. I recently learned of [HB 472] and I am extremely disturbed about one section of the bill. I would like to address the 30-day holding period for purchased secondhand merchandise. The 30 days that I would be required to hold this merchandise would cause undue financial hardships and excessive [recordkeeping] and storage problems for my store and all other [secondhand] businesses. I have contacted several fellow business owners here in Fairbanks to discuss our views and concerns. I have spoken to a coin shop operator ...; a used sporting-good storeowner; several jewelry stores; a gold dealer; ... a stamp collectible shop; an antique dealer; a clock and watch repair shop; and numerous recreational [vehicle] dealers including sellers of snow machines, "four wheelers," boat dealers, and jet ski dealers. After talking with my fellow business owners, I would like to explain the financial hardships we would be facing with the 30-day holding period. When dealers acquire [secondhand] items such as snow machines, off-road vehicles, and all boats and watercraft ... midseason, for example, July or early August, and [the items] are held for 30 days - to about the first part of September - the season is over. The items have to be carried over to the next season, approximately mid-May. The season for these vehicles is about four and a half months here in Fairbanks. Taking 30 days out of [that] timeframe to sell an item is a crippling financial disadvantage. The depreciation factor on these items is high, resulting in several hundreds of dollars in lost depreciation. Number 1925 MR. CARPENTER continued: The 30-day holding period has the same disadvantage to coin dealers, as Mr. [Cleworth] has explained; when they are locked into a 30-day period, they cannot sell and the fluctuation of gold prices [puts] them at high risk and can result in a monetary loss. The storage and extra bookkeeping will be a major problem for most stores. [In] my store, the storage space will be a huge problem. We do not have the space to store 30- days worth of merchandise. We deal in many bulky items such as furniture, exercise equipment, and appliances. We may [be] forced to stop handling these items, which are a good portion of our business, if we [have] to hold them for more than 30 days, ... due to the lack of storage. We feel that the 30-day holding period is [unnecessary]. The [secondhand] storeowners are members of this community. As property owners, we are very concerned about stolen property, and we have always cooperated [with] law enforcement's attempts to recover stolen property [and] prosecute (indisc.) Fairbanks. We are very vigilant in our efforts to not deal in stolen property. We business owners haven't had enough time and opportunity to express our concerns pertaining to [HB 472]. We strongly urge you to seek more input from all concerned citizens. Please do not rush this bill until you have fully heard our side of the story and have all the facts. As for our present business practices, my store has been complying with present Alaska law regulating [secondhand] stores, and have no problem with it. We have been getting full names, addresses, phone numbers, Alaska driver's license or state ID [identification] numbers, plus [a] full description of the merchandise purchased with serial numbers, as well as signature of the seller. We have purchase invoices filed for the past ten years; they have always been available for inspection. Including a 30-day holding period is overkill and unjustified. Number 2018 MR. CARPENTER concluded: Over the past ten years [we've] owned this [secondhand store], Ben's Super Store, I can recall only one incident when stolen property was sold before it was deemed stolen. It was a bicycle, and it was recovered and the purchaser received [a] refund. The incident rate of stolen property received by [secondhand] stores is not as high as perceived by some people. The national rate of stolen property that is sold at [secondhand] stores is about one-half of 1 percent. The Fairbanks percentage rate is lower than the national average, at approximately [one-quarter] of 1 percent, based on my [store's] experience. We strongly urge you to take your time to get the facts and statistics before you [act] on [HB 472]. We urge you to seek more input from secondhand [storeowners]; we will be affected by the 30-day holding period. We are very [concerned] about the future of our [companies] if this holding period becomes law. Number 2072 DAN HOFFMAN, Lieutenant, Fairbanks Police Department (FPD), City of Fairbanks, testified via teleconference in support of the intent of HB 472. He said that it will better allow the FPD to track stolen property. He noted, however, that he can certainly appreciate the concerns of the secondhand storeowners that "seem to be getting drug into this." He opined that the state needs to take a close look at who to include into the bill. He offered that from his original discussions with the APD and other law enforcement, HB 472 was being looked at primarily as a way to assist in regulating pawnbrokers. Mr. Hoffman remarked that Chair Rokeberg makes a valid point in that it would be ridiculous if the information gathered merely sat in corner collecting dust. He suggested that HB 472 ought to be considered the forerunner of a way for law enforcement across the state to be able to access, perhaps through a single web page, all the information, which ought to be collected in a uniform manner, provided by every pawnshop. He noted that such a system will never be realized until statewide legislation regulating pawnshops is implemented. CHAIR ROKEBERG asked Mr. Hoffman whether he would be disturbed if secondhand dealers were "deleted" from HB 472. MR. HOFFMAN said that personally, he would not be too disturbed, noting that if the bill initially focuses on pawnshops and it is later found that some types of secondhand venues need to be regulated in the same fashion, they could be added as appropriate. He said that he hopes that the "secondhand issue" doesn't bog the bill down entirely. CHAIR ROKEBERG said that the committee fully supports a "criminal justice MIS (management information system) system that would be statewide." He asked whether the City of Fairbanks currently has a "pawnbroker reporting requirement." MR. HOFFMAN said yes, adding that one of the major problems is that it currently relies on 19th century technology, with all of the pawnbrokers filling out paper tickets. He explained: We don't have the manpower resources to go around, physically pick up shoeboxes full of paper tickets, and have people go through and hand-sort those things. But if we were to try and change our city ordinance and force our local pawnbrokers to go to a computerized system, it would be too easy for those folks to argue that, "Well, the people in North Pole don't have to do that," or, "The people down in the valley don't have to do that." As I said, that's why we need a statewide standard, so that if you want to make a local change, it will come up to that standard. Number 2202 NORM BLAKELEY testified via teleconference, noting that he owns a pawnshop/secondhand store in Soldotna and has owned it for approximately 20 years. He said: About two or three years ago, a police officer from the [Alaska State] Troopers met with the police chief in Soldotna with a bunch of the local brokers, and we all sat down and discussed the issues that you're talking about at the present time: ... about doing weekly [reports] and having them turned in. Most of the pawn dealers, excluding me, didn't want to do it and refused to do it. And I told them that I would ... try to comply with what they wanted - see how it worked and what went on with it. So, my shop - I only had myself and one other employee - did do this. We did it for about three or four months, and finally Officer Donnelly (ph) said that it was too cumbersome, [and] that they didn't have time to pick up the reports. I think they looked at it once in the four- month period; we did a lot of work - nothing ever happened with it. And so he suggested that we just do away with it. ... I don't believe he's in this area now; he was with the [Alaska State] Troopers. And so the idea of doing this [was] tried at our place. The [Alaska State] Troopers didn't have the manpower to do it, and couldn't do it. Our records are open, continuously, to anyone that has the authority, meaning the [Alaska State] Troopers or law enforcement officers, that want to look at our records. ... Actually, in our area, I think [we] have a great reputation. We have helped Kmart [Corporation] ... [catch] people that worked for them that were taking merchandise, that they never knew, the [Alaska State] Troopers never knew, or anyone else never knew about. One of the incidences ... [involved merchandise] in excess of [$80,000 or $90,000] that we notified them about, and they told us it couldn't be happening, and they looked into it and it was happening, and they did bring that to a conclusion, and some people went to jail for that. Number 2289 MR. BLAKELEY continued: Part of the problem that I see you having is ... [that] people don't only go from our location to Anchorage or other places; they are fencing the stuff at yard sales now, all types of places. I think they think secondhand dealers and pawnshops are watched a lot closer than they used to be. I think the dealers have become more reputable; ... we would not intentionally, in anyway, take anything [stolen]. And, in fact, we try to help the community: ... anything that we think is suspicious is ... [turned] in. A lot of the articles that you're talking about are unidentifiable - ... rings, jewelry, things like that - and the fact [is] that there's a lot of them that are manufactured [that] look a lot alike, [though] I understand a lot of them aren't. The gentleman that talked ... from Anchorage that said that he had his business broke into, I think if Anchorage maybe could have notified us, as dealers separately, that we would have been more than happy to try to help him, and to try to help recover his property. Myself I have had merchandise stolen out of my shop; I had [a] snow machine stolen from the shop - the chain cut and driven off when we were there. So I can empathize with how he's feeling. As far as him being able to go [through] the records if they were complied in a place where he could do that, I think there's a lot of people that do business with me that would not want the everyday public going through their records and seeing their names. I have dealt with attorneys, doctors, all kinds of people in my business, because, I feel, I have a great reputation: they trust and understand me. So I think that's an issue that if you would even [think] about, that wouldn't be acceptable. A lot of the problems we have with stolen merchandise are related to relatives: children - thieves - stealing things from their folks and bringing them in. And we try to work with the parents, and we don't take any merchandise ... from anybody that isn't 18 years of age. They have to have a positive identification - pictured ID - such as a driver's license or state ID; we don't accept anything other than that. [In] our area we have a hard time even getting the City of Soldotna, [City of] Kenai, and the [Alaska State] Troopers to help us try to figure out what's going on with stolen merchandise. So, to try to put this on [a] statewide basis and have the state do it, I think is really more cumbersome than what you would think it would [be]. If the cities want to pass their own ordinances to do this, I think that's a better way to look at it than to probably put it in a state perspective. TAPE 02-47, SIDE B Number 2363 CYNTHIA BRIDGES, Detective, Anchorage Police Department (APD), Municipality of Anchorage (MOA), testified via teleconference, noting that Anchorage has been monitoring its pawnshops for several years. She said: It works out really well. But those records are not public records. ... We don't give out that doctors pawn their property, or anything like that. That's not public record. ... The purpose of having that record is, when we are looking for stolen property, we can identify who has pawned stolen property, or, if someone has an article stolen and they may have a suspect, we can run that name and determine ... whether or not that person pawned something. But ... that's not information that goes out to the general public. There are a couple of things that I specifically wanted to address. We had a burglary ... last summer, and the guys involved in this burglary pawned some of the property. And we caught them doing a burglary, and when we ran ... their names through our pawn system, [we] were able to tie them to several burglaries and were able to subsequently return a lot of stolen property that we would not have necessarily been able to return had we not known the name of a potential burglar. Also, as far ... secondhand shops ... [having] a problem with this bill, I had a case where a lady stole some property from an elderly couple that she was [caretaker] for. She stole their property, she pawned some of it at a pawnshop; some of the property that she pawned at a pawnshop she retrieved from the pawnshop and then took to a coin dealer and sold it to the coin dealer. I found out from the pawnshop that this is what she had done; by the time I contacted [this company], ... within a week or two, ... they'd already disposed of the property. Number 2265 MS. BRIDGES said: So, ... if they're going to take in secondhand property ... - I'm not saying that they know that it's stolen, and they have no expectation that it's stolen - ... there is potential that it could be stolen. And with jewelry it's very difficult to distinguish items; [with] jewelry specifically, what the problem is, is [that] it is not always going to the pawnshop. And if our criminals find out that the jewelry stores will take this jewelry, and there's virtually no way that they can get caught, they're going to start doing it. And there is nothing to say that they haven't already. It will create a lot more work for me and the [people] that work with me who enter this information if we do start collecting this information from secondhand stores like jewelry shops and computer stores, but in the situation where they're taking this kind of stuff, there's got to be some kind of monitoring, because that's where the stuff's going to be going. Number 2228 MS. BRIDGES addressed a couple of concerns about the bill: One of the biggest concerns is ... there's a line in there that says if items are sold in [lots of] ten or more, ... like DVD movies or CDs [compact discs] or video games and things like this, you only have to report them if they're sold in a bunch of that many or more. Well, if our criminals find out that they're not being reported unless there's ten or more, they're going to start going from pawnshop to pawnshop. ... I had a case where a gentleman, in the span of six months, pawned 2,700 DVDs - the movies. Now, if you do the math, and you buy each one for $15 from a store, that's ... [$40,500] worth of DVDs in six months. Now, he didn't get that much for them from the pawnshop; ... he didn't always pawn ten or more at a time, he would pawn three or four here, go to another pawnshop [and pawn] five or six. And if we have no way of tracking something like that, then we have a big problem with that also. So, I kind of have a problem with that. But if [removing] that particular line hinders the bill, then I would say leave it in; if it doesn't hinder the bill, then I would say take it out. CHAIR ROKEBERG asked whether it is the MOA's ordinance that dictates what information pawnbrokers have to report. MS. BRIDGES said that it is the MOA's ordinance that dictates that pawnbrokers must report everything. For anything that pawnbrokers take in, whether they buy it outright or loan on it, they have to report; there is no stipulation pertaining to serial numbers, value, or quantity. If they fail to report, they are in violation, she added. CHAIR ROKEBERG asked how pawnbrokers report. Number 2141 MS. BRIDGES explained: The majority of our pawnshops e-mail us; we have [an] e-mail address, and they e-mail it to us. And then we download it to our system, and it's rewritten in a form that our computers can read. And I have two clerks that work for me, and they download the information and modify it slightly to go into our system, and then it's downloaded to the state for [an] APSIN [Alaska Public Safety Information Network] check for stolen property - serialized property. I do have two pawnshops that still report with tickets; we have hand tickets that we provide to the pawnshops, and they fill them out, and I pick them up once a week, and my clerks enter them into our system. And then some of the pawnshops ... report via disk; they download the information to a disk, I pick it up on a weekly basis, and it's downloaded to our system. So ... there are several different ways to report. And a lot of it has to do with what the pawnshops' ability to report is. One of the reasons why we would like to see this go on and get the whole state to report is because what we're seeing is a lot of our stolen stuff is going either out to the valley or down to the Kenai. And we don't have the ability to access that information. Our jurisdiction is Anchorage and ... we can't just hop in our car and run down to Kenai to see if any of our stolen stuff shows up in the pawnshop down there. So there's no way for us to track the outside agencies' jurisdictions to see if our stuff is showing up down there. Now, if they were online, similar to us, ... it's possible in the future that we would be able to communicate with each other via computer, and they would be able to download our information (indisc.) and us theirs. And that's kind of what we're hoping for but in order to do that, we have to have a bill where the state, or different municipalities other than Anchorage, actually have their pawnshops reporting to them. CHAIR ROKEBERG announced that HB 472 would be held over.
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