HB 472-PAWNBROKERS/SECONDHAND DEALERS    CHAIRMAN STEVENS announced HB 472 to be up for consideration. MS. LAURA ACHEE, staff for Representative Joe Green, sponsor of HB 472, said that he has prepared a committee substitute that she would explain. She explained that there is a statute right now that requires anyone who buys a secondhand article with the intent of reselling it or takes a secondhand article as collateral on a loan, not including banks, to keep a record of every single article they take in including the name of the person that they purchased it from. The bill lists what the articles would be rather than saying any article - like articles with a serial number, article with a resale value greater than $75 or article presented in a lot of 10 or more, which would cover CDs and DVDs. The biggest change in the bill is that in addition to keeping the records now the secondhand dealers and contractors who conduct these transactions would have to provide weekly reports to their local police agency or to the state troopers if they are outside of a municipality. The version that passed out of the House has every two weeks for reporting. After speaking with law enforcement personnel, Representative Green felt that every two weeks was not frequent enough to track stolen articles. Representative Green wants to make it clear that the intent of this bill is not as some people have supposed - that we found that there's a big problem with dishonest shopkeepers out there. In fact, that's not the problem. We've found every shopkeeper we've spoken to has been very honest and upfront about the fact that they check I.D. s and they don't want stolen property in their stores. There are plenty of theft laws on the books that will help law enforcement shut down any shop keepers that were known to be taking in hot items and fencing them. What we're trying to do is make it easier for police to get the items that are stolen back to the people to whom they belong and to also have a record of folks who are repeatedly stealing and selling items to be used during prosecution. She said the next change from the version that passed out of the House is in Section 6, the property-holding requirement. The House version says that pawn brokers have to hold items for two weeks before they could sell them allowing them time to correlate the reports of items taken in with the reports of stolen items. The CS backs the holding period down a little bit to 72 hours from the time that the report is submitted so they would have to hold from the time they take it in until 72 hours after the report is submitted. They have included secondhand dealers in the holding provisions. The next change is in part (b) of this section where it's made really clear that in the case of a pawned item, the person who pawned it may redeem that item within the hold period and not be held to the hold period. AS 08.76.760 has an exemption. In Alaska especially a lot of people own shops that cover a range of services like secondhand dealers, pawn brokers, thrift stores, etc. and they want to make it clear that if a dealer purchases an item from another dealer, purchases it at auction or purchases it wholesale, are not subject to the reporting laws, because they are not items that are likely to be stolen or if they are secondhand goods that come from another dealer, they're presumed to have been reported in the original transaction. Another change in the CS is in section 1, the House version, which said that they would record 'items' that fall in these categories. The CS makes it clear that it refers to secondhand items. SENATOR AUSTERMAN asked if they know what percentage of pawned secondhand items are hot. MS. ACHEE replied that she didn't know that. SENATOR AUSTERMAN moved to adopt the CS to HB 472 for discussion purposes. There were no objections and it was so adopted. SENATOR AUSTERMAN said he assumed there was a big problem with secondhand stores that requires these reporting restrictions. MS. ACHEE explained that this bill came from the fact that the Municipality of Anchorage has a law that requires pawn brokers to make weekly reports and it has been helpful in tracking stolen items. They have a constituent who had a number of items stolen and the Anchorage Police Department checked the local stores and couldn't find them. They then thought the items had gone out of Anchorage to the Valley and sent an officer out once or twice to check the records and all of the stores. Ultimately, the items were never recovered even though they had an idea of where they went. This constituent thought a statewide reporting system would improve the process. In Anchorage, alone, there is one police officer whose entire job is checking pawn shops and secondhand stores looking for stolen items. SENATOR TORGERSON said the only part of the bill he doesn't like is the reporting every week to the Police Department. He asked why they can't just go in and inspect the records, which existing statute allows them to do. MS. ACHEE replied that he was correct about the records already being open to law enforcement agencies, but there is a manpower issue and they don't have the time. SENATOR TORGERSON asked how many pawnbrokers and secondhand stores are in Alaska that are required to report. Another question he has was what happens when you have the municipal police and the borough state troopers who both need it then. It sounds to him like it's a never-ending thing where everyone needs to report. MS. ACHEE replied that with regard to reporting, it would be to the presiding jurisdiction. And if an item has to be recorded when it's taken in and that's the only time it has to be recorded. The volume of information going to police departments isn't going to change if you're reporting it weekly versus reporting it every two weeks. It's going to be the same number of transactions being recorded. It's just how frequently the reports come in. In a situation, especially with hold requirements that in the version that came out of the House were identical to the reporting times, it gives the law enforcement no time to correlate their reports for stolen property with these reports of items that have been pawned or sold to see if any matches occur unless the frequency is greater. SENATOR TORGERSON said he understands the situation, but he thought it was an over-burdened position to put pawn brokers and secondhand dealers in when their books are already open for inspection. "Also, this information is going to pile up in a corner somewhere. I can't think they're going to have a dedicated person look through this stuff to see if somebody's serial number or item shows up on a list. Maybe they will." MR. NORM BLAKELY, Alaska Trading and Loans on the Kenai Peninsula, said he had some questions about this bill. He voluntarily does this in his shop on the Peninsula for about three or four months and finally their officer told them that they just didn't have the manpower to take care of the reports and go through them. So they no longer needed to do it. He said that his was the only shop that volunteered to do the reports and that there were others that didn't. He didn't see how this would work. MR. BLAKELY also said that most of the time what happens in these cases that he can see are family disputes. He thought they should think this bill through and make it a little more equitable for everyone. SENATOR TORGERSON asked if he gave his information to the troopers as well as the City of Soldotna. MR. BLAKELY replied that Chief Gifford was in the loop they were working with and the troopers were supposed to come by and pick them up, but they didn't have the time to do it. Nobody came by to pick the reports up and it was time consuming to do. LIEUTENANT JULIE GRIMES, Department of Public Safety, said she thought the bill was "a step in the right direction." People who are victims of theft would benefit from the way this bill is written and law enforcement will definitely have an easier time in doing their job identifying stolen property that has been pawned and then trying to get it back to the rightful owner, but more importantly actually identifying who has the professional stolen items and trying to make arrests and do a good case investigation. We do believe it is a step in the right direction. SENATOR TORGERSON asked if his concern about the volume of information that might be coming was a concern of hers. LIEUTENANT GRIMES replied: I'm not going to represent that we have scads of resources that could be dedicated to it right now, but at the same time, it is not something that will sit in the corner. I understand your concern. The information, for instance, I think there's four or five shops in Mat-Su Valley, the information that they would provide would come in electronically or by hard copy paper to the trooper office and it would be - it's not a big chore to categorize and file it - and those troopers working burglaries would certainly have access to that. We'd be going through it. When you've got a case going and you're trying to determine where the property might be, that's just part of your investigation - is to check that stuff. So, it's certainly not going to go away. That information is real valuable and it would be attended to by the troopers or other law enforcement departments that have active… SENATOR TORERGSON said that it is a class A misdemeanor if the guy knowingly violates that section. "I just have a problem with that." CHAIRMAN STEVENS said the bill says a lot of the recording will now be done by data based management and asked if that would help them access the information with less manpower. "Do you envision developing some sort of data based management for that?" LIEUTENANT GRIMES replied that right now the Department doesn't have the resources to actually create a state wide information management system, but it is something they could work towards in the future. "For now we would probably use just a hard copy file and a trooper actually reviewing those files looking for his evidence." SENATOR AUSTERMAN asked how she anticipated the interaction between the Anchorage Police Department and the Alaska State Troopers. LIEUTENANT GRIMES replied that she didn't think the interaction between the law enforcement agencies was a problem. Currently, property crimes investigators all over the state network with each other, because they realize how quickly stolen items can leave their city and be pawned in another city. SENATOR AUSTERMAN asked if she knew the percentage of hot items that is involved. LIEUTENANT GRIMES replied that she couldn't give him an accurate answer. SENATOR LEMAN said it would be to everyone's advantage to have a web page with the standardized format so people could submit this information electronically. I can't imagine getting all this hard copy…I think you'd be better off to pay the secondhand dealers in the pawn shops $1 if they submit a report electronically according to the right format to provide an incentive to them and be money ahead. He said he knows they mean well. CHAIRMAN STEVENS said he thought that was a valid point. MS. ACHEE said she thought Representative Green would whole heartedly support a data based system, but this just isn't the right fiscal year to be asking for more money. SENATOR AUSTERMAN said he didn't see where it says they need to maintain the records for one year and it talks about a seven-day period. He asked if that was for the new items. MS. ACHEE replied that new items are not explicitly stated, but that's not the intent, which is that only the new records since the last report need to be recorded. She said that could be clarified. MR. BLAKELY commented that he had no problem with Representative Green's concern that families get their property returned to them, but if then they need to think about restitution for the people who have purchased the property. This has been a real problem that should be addressed. MS. ACHEE responded that without this bill, if an individual finds an item in a store that they can legitimately claim belongs to them and the police recover it, they'll get it back and the shop keeper will unfortunately be out the money. Under this bill the shop owner could bring a civil action against the person who took it and gave him their name and age. SENATOR AUSTERMAN said he was having a hard time with this bill especially if it stays in the same form it's in now. I think it steps too far out on the limb of creating new laws that create new work that are a burden on everybody. Unless they can show me that this is really a big problem that we need to address through creating new laws, I'm going to have a hard time moving this out of committee. CHAIRMAN STEVENS said they would hold the bill.