Legislature(2001 - 2002)
04/19/2002 02:00 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 472 - PAWNBROKERS/SECONDHAND DEALERS Number 0037 CHAIR ROKEBERG announced that the first 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 0099 LAURA ACHEE, Staff to Representative Joe Green, Alaska State Legislature, sponsor, on behalf of Representative Green, said that a proposed committee substitute contains the requirement that any retailer who takes in an item with the intent of selling it or holding it as collateral for a loan shall provide a report biweekly to his/her local police agency. There is also a requirement that pawnbrokers, but not secondhand dealers, hold items for 30 days. A third change notes that the Department of Public Safety (DPS) is responsible for establishing the form or format of the report made to the local police agencies. CHAIR ROKEBERG remarked that the latter change is intended to provide for a consistent method of communication between law enforcement agencies. Number 0191 REPRESENTATIVE MEYER moved to adopt the proposed committee substitute (CS) for HB 472, version 22-LS1519\O, Bannister, 4/18/02, as a work draft. There being no objection, Version O was before the committee. REPRESENTATIVE BERKOWITZ, referring to Section 1, asked what would happen if the pawnbroker or secondhand dealer doesn't record all the items listed, one of which is the eye color of the person selling/pawning the item. MS. ACHEE indicated that a person who is guilty of "knowingly" violating [Section 1-3] of Version O would be subject to a class A misdemeanor. She mentioned that the language used in Section 4, regarding that penalty, was recommended by the drafter. REPRESENTATIVE BERKOWITZ mentioned he'd received comments from someone who had concerns about the 30-day holding period. MS. ACHEE, after acknowledging that those concerns did come up a lot, relayed that law enforcement's position is: What's the point of having a reporting requirement if an item could be taken in on one day and sold the next day. She noted that the position of the business owners is that it costs them to hold items. The compromise proposed by Version O requires only pawnbrokers to hold items for 30 days, which is something they already do with pawned items. REPRESENTATIVE BERKOWITZ referred to Section 6, which contains the language regarding the 30-day holding period. He pointed out that are no exceptions to that holding period, even if law enforcement were to acknowledge that a particular item was not a stolen item. MS. ACHEE said that is correct. REPRESENTATIVE BERKOWITZ remarked that this could lead to an inequitable situation because the pawnbrokers would be stuck holding inventory for no legitimate purpose. "As I understand [it], the purpose of this bill is to make sure that you're not purveying stolen goods, and if you know that the goods aren't stolen, what's the object of requiring them to hold it for 30 days?" he asked. MS. ACHEE replied that the object would be to allow time for law enforcement to correlate the reports of stolen goods with the reports of received goods. REPRESENTATIVE BERKOWITZ posited: "So, on day 10, law enforcement comes back and says 'This is totally legitimate goods ...,' and yet the broker still has to hold it for an additional 20 days." Number 0452 MS. ACHEE said that unfortunately, that's not the way it usually works. She opined that police departments would not be able to clear an item in that short a period of time simply because they would not yet have a record of stolen items. She noted that under the existing Municipality of Anchorage ordinance, pawnbrokers currently hold items for 30 days regardless of whether the police have received a report of particular items being stolen. REPRESENTATIVE COGHILL mentioned that he, too, has concerns regarding the requirement that items "purchased or acquired" be held for 30 days. He noted that many [of these businesses] buy [wholesale] merchandise for retail sale. He asked if Section 6 would apply to this sort of item as well. MS. ACHEE said that at this time, the language in Section 6 would apply to all items. She offered that there is room to specify that Section 6 only apply to items purchased from individuals, which would exempt items purchased from other dealers or licensed wholesalers. She said that another option would be to "look directly at the 30-day provision". This provision was modeled after Anchorage's municipal ordinance, but other states use different holding requirements, ranging from 24 hours up to 30 days, she explained. REPRESENTATIVE COGHILL indicated that his concern, rather than being with the 30-day holding period itself, pertains to the fact that the holding period would also apply to items purchased wholesale. REPRESENTATIVE BERKOWITZ surmised, then, that Representative Coghill's concern pertains to pawnbrokers who might purchase items at Costco Wholesale Corporation ("Costco"), for example, and then resell those items for a slight markup; according to the current language in Section 6, those pawnbrokers would have to hold those items for 30 days before reselling them. REPRESENTATIVE COGHILL confirmed that that is his concern. CHAIR ROKEBERG suggested decreasing the holding period. REPRESENTATIVE BERKOWITZ questioned whether doing so would serve a legitimate purpose. REPRESENTATIVE KOOKESH said he agreed with Representative Coghill. He opined that a distinction should be made between items purchased wholesale and items purchased from individuals, since the purpose of HB 472 is to assist law enforcement in recovering stolen goods. There should be a distinction between what the pawnbroker does as a pawnbroker and what he/she does as a merchant, he added; it's not fair to have to hold items for 30 days if, acting as a merchant, one purchases items wholesale. REPRESENTATIVE BERKOWITZ added that such items might be perishable. Number 0742 REPRESENTATIVE COGHILL made a motion to adopt Conceptual Amendment 1, which would change the language on page 3, line 29 to read: "shall hold pawned items purchased or acquired". REPRESENTATIVE JAMES noted that sometimes items [brought in by individuals] are not "pawned"; sometimes the pawnbroker purchases those items outright. CHAIR ROKEBERG added that it is more likely that stolen goods would be sold outright rather than pawned. REPRESENTATIVE JAMES recounted that she'd had something stolen from her, and when she went to [a pawnshop] three days later to search for it, it had already been [sold]. Number 0853 REPRESENTATIVE COGHILL, after noting that he still has concern about requiring items purchased wholesale to be held for 30 days, withdrew Conceptual Amendment 1. CHAIR ROKEBERG mentioned that one option would be to delete Section 6. REPRESENTATIVE BERKOWITZ said that one of the problems with the 30-day holding requirement in Section 6 is that it doesn't provide for any exceptions for items that have "a chain of legitimate custody" established. Number 0939 CHAIR ROKEBERG made a motion to adopt a new Conceptual Amendment 1 to page 3 [line 29-30]: "shall hold a purchased or acquired item for 30 days if purchased or acquired from an individual, but not from a retail or wholesale business". REPRESENTATIVE JAMES stated she may have a conflict of interest. Number 0995 CHAIR ROKEBERG noted that there were no objections to the new Conceptual Amendment 1. Therefore, Conceptual Amendment 1 was adopted. REPRESENTATIVE BERKOWITZ asked whether there is anything in HB 472 that would prohibit or encourage public access to the information that pawnbrokers have. How does the public get at this information? MS. ACHEE said that that issue is not specifically addressed in HB 472. She added that other states do have statutory provisions that specifically state that for the purposes of the Freedom of Information Act, "these are not considered public records." In response to another question, she said that if someone has something stolen, it is the responsibility of the local law enforcement agency to search pawnbroker records. CHAIR ROKEBERG pointed out that [Section 3] says, "A pawnbroker or secondhand dealer shall make all records required by this chapter, whether entered by handwriting or in a computer, available for inspection by a law enforcement officer at all reasonable times". He added that according to his understanding, this information is not available to the general public. MS. ACHEE relayed that the Anchorage Police Department does not consider these records public. Number 1133 REPRESENTATIVE MEYER moved to report the proposed committee substitute (CS) for HB 472, version 22-LS1519\O, Bannister, 4/18/02, as amended, out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, CSHB 472(JUD) was reported out of the House Judiciary Standing Committee.