Legislature(2001 - 2002)

04/19/2002 02:00 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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
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                                                               
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                                                               
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                                                               
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                                                               
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.                                                                                                   

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