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First Substitute H.B. 192

Representative Rebecca D. Lockhart proposes the following substitute bill:


             1     
PROPERTY TRANSACTION AMENDMENTS

             2     
2008 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Rebecca D. Lockhart

             5     
Senate Sponsor: Jon J. Greiner

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Pawnshop and Secondhand Merchandise Transaction Information
             10      Act regarding functions of the Division of Consumer Protection and exemption of
             11      certain businesses.
             12      Highlighted Provisions:
             13          This bill:
             14          .    directs the Division of Consumer Protection to by rule exempt from regulation
             15      specific classes of businesses that deal in secondhand goods;
             16          .    directs the division to consult with the board when making the administrative rules
             17      to exempt the specified types of businesses that deal in secondhand goods; and
             18          .    requires that prior to November 30, 2008, the Division of Consumer Protection
             19      report to the Legislature regarding issues considered and actions taken by the
             20      division and by the Pawnshop and Secondhand Merchandise Advisory Board during
             21      the year.
             22      Monies Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None


             26      Utah Code Sections Affected:
             27      AMENDS:
             28          13-32a-102, as last amended by Laws of Utah 2007, Chapter 352
             29          13-32a-102.5, as enacted by Laws of Utah 2005, Chapter 256
             30          13-32a-104, as last amended by Laws of Utah 2007, Chapter 352
             31          13-32a-112, as last amended by Laws of Utah 2007, Chapter 352
             32          13-32a-113, as last amended by Laws of Utah 2006, Chapter 290
             33      ENACTS:
             34          13-32a-112.5, Utah Code Annotated 1953
             35     
             36      Be it enacted by the Legislature of the state of Utah:
             37          Section 1. Section 13-32a-102 is amended to read:
             38           13-32a-102. Definitions.
             39          As used in this chapter:
             40          (1) "Account" means the Pawnbroker and Secondhand Merchandise Operations
             41      Restricted Account created in Section 13-32a-113 .
             42          (2) "Antique item" means an item:
             43          (a) that is generally older than 25 years;
             44          (b) whose value is based on age, rarity, condition, craftsmanship, or collectability;
             45          (c) that is furniture or other decorative objects produced in a previous time period, as
             46      distinguished from new items of a similar nature; and
             47          (d) obtained from auctions, estate sales, other antique shops, and individuals.
             48          (3) "Antique shop" means a business operating at an established location and that
             49      offers for sale antique items.
             50          (4) "Board" means the Pawnshop and Secondhand Merchandise Advisory Board
             51      created by this chapter.
             52          (5) "Central database" or "database" means the electronic database created and
             53      operated under Section 13-32a-105 .
             54          (6) "Division" means the Division of Consumer Protection in Title 13, Chapter 1,
             55      Department of Commerce.
             56          (7) "Identification" means a form of positive identification issued by a governmental


             57      entity and that:
             58          (a) contains a numerical identifier and a photograph of the person identified; and
             59          (b) may include a state identification card, a state drivers license, a United States
             60      military identification card, or a United States passport.
             61          (8) "Local law enforcement agency" means the law enforcement agency that has direct
             62      responsibility for ensuring compliance with central database reporting requirements for the
             63      jurisdiction where the pawnshop is located.
             64          (9) "Misappropriated" means stolen, embezzled, converted, obtained by theft, or
             65      otherwise appropriated without authority of the lawful owner.
             66          (10) "Original victim" means a victim who is not a party to the pawn transaction.
             67          (11) "Pawnbroker" means a person whose business engages in the following activities:
             68          (a) loans money on one or more deposits of personal property;
             69          (b) deals in the purchase, exchange, or possession of personal property on condition of
             70      selling the same property back again to the pledgor or depositor;
             71          (c) loans or advances money on personal property by taking chattel mortgage security
             72      on the property and takes or receives the personal property into his possession, and who sells
             73      the unredeemed pledges;
             74          (d) deals in the purchase, exchange, or sale of used or secondhand merchandise or
             75      personal property; or
             76          (e) engages in a licensed business enterprise as a pawnshop.
             77          (12) "Pawn and secondhand business" means any business operated by a pawnbroker
             78      or secondhand merchandise dealer, or the owner or operator of the business.
             79          (13) "Pawn ticket" means a document upon which information regarding a pawn
             80      transaction is entered when the pawn transaction is made.
             81          (14) "Pawn transaction" means an extension of credit in which an individual delivers
             82      property to a pawnbroker for an advance of money and retains the right to redeem the property
             83      for the redemption price within a fixed period of time.
             84          (15) "Pawnshop" means the physical location or premises where a pawnbroker
             85      conducts business.
             86          (16) "Pledgor" means a person who conducts a pawn transaction with a pawnshop.
             87          (17) "Property" means any tangible personal property.


             88          (18) "Register" means the record of information required under this chapter to be
             89      maintained by pawn and secondhand businesses. The register is an electronic record that is in a
             90      format that is compatible with the central database.
             91          (19) (a) "Secondhand merchandise dealer" means an owner or operator of a business
             92      that:
             93          (i) deals in the purchase, exchange, or sale of used or secondhand merchandise or
             94      personal property; and
             95          (ii) does not function as a pawnbroker.
             96          (b) "Secondhand merchandise dealer" does not include:
             97          (i) the owner or operator of an antique shop;
             98          (ii) any class of businesses exempt by administrative rule under Section 13-32a-112.5 ;
             99          [(ii)] (iii) any person or entity who operates auction houses, flea markets, or vehicle,
             100      vessel, and outboard motor dealers as defined in Section 41-1a-102 ;
             101          [(iii)] (iv) the sale of secondhand goods at events commonly known as "garage sales,"
             102      "yard sales," or "estate sales";
             103          [(iv)] (v) the sale or receipt of secondhand books, magazines, or post cards;
             104          [(v)] (vi) the sale or receipt of used merchandise donated to recognized nonprofit,
             105      religious, or charitable organizations or any school-sponsored association, and for which no
             106      compensation is paid;
             107          [(vi)] (vii) the sale or receipt of secondhand clothing and shoes;
             108          [(vii)] (viii) any person offering his own personal property for sale, purchase,
             109      consignment, or trade via the Internet;
             110          [(viii)] (ix) any person or entity offering the personal property of others for sale,
             111      purchase, consignment, or trade via the Internet, when that person or entity does not have, and
             112      is not required to have, a local business or occupational license or other authorization for this
             113      activity;
             114          [(ix)] (x) any owner or operator of a retail business that receives used merchandise as a
             115      trade-in for similar new merchandise; or
             116          [(x)] (xi) an owner or operator of a business that contracts with other persons or
             117      entities to offer those persons' secondhand goods for sale, purchase, consignment, or trade via
             118      the Internet.


             119          Section 2. Section 13-32a-102.5 is amended to read:
             120           13-32a-102.5. Administration and enforcement -- Report to Legislature.
             121          (1) The division shall administer and enforce this chapter in accordance with the
             122      authority under Title 13, Chapter 2, Division of Consumer Protection.
             123          (2) The attorney general, upon request, shall give legal advice to, and act as counsel
             124      for, the division in the exercise of its responsibilities under this chapter.
             125          (3) Reasonable attorney's fees, costs, and interest shall be awarded to the division in
             126      any action brought to enforce the provisions of this chapter.
             127          (4) The division shall on or before November 30, 2008, report to the Business and
             128      Labor and Law Enforcement and Criminal Justice Legislative Interim Committees regarding
             129      the following activities during the calendar year 2008:
             130          (a) the number of meetings held by the board during the year;
             131          (b) the number of training sessions conducted by the board under Section 13-32a-112
             132      and the number of persons who attended the training;
             133          (c) the exemptions requested and exemptions granted by the division under Section
             134      13-32a-112.5 , including the names and locations of the businesses;
             135          (d) the number of enforcement issues considered by the division; and
             136          (e) a description of the action taken by the division regarding each enforcement issue.
             137          Section 3. Section 13-32a-104 is amended to read:
             138           13-32a-104. Register required to be maintained -- Contents -- Identification of
             139      items.
             140          (1) Every pawnbroker or secondhand merchandise dealer shall keep a register of each
             141      article of property a person pawns or sells to the pawnbroker or secondhand merchandise
             142      dealer, except as provided in Subsection 13-32a-102 (19)(b) [regarding secondhand
             143      merchandise dealers]. Every pawn and secondhand business owner or operator, or his
             144      employee, shall enter the following information regarding every article pawned or sold to the
             145      owner or employee:
             146          (a) the date and time of the transaction;
             147          (b) the pawn transaction ticket number, if the article is pawned;
             148          (c) the date by which the article must be redeemed;
             149          (d) the following information regarding the person who pawns or sells the article:


             150          (i) the person's name, residence address, and date of birth;
             151          (ii) the number of the driver license or other form of positive identification presented
             152      by the person, and notations of discrepancies if the person's physical description, including
             153      gender, height, weight, race, age, hair color, and eye color, does not correspond with
             154      identification provided by the person;
             155          (iii) the person's signature; and
             156          (iv) a legible fingerprint of the person's right thumb, or if the right thumb cannot be
             157      fingerprinted, a legible fingerprint of the person with a written notation identifying the
             158      fingerprint and the reason why the thumb print was unavailable;
             159          (e) the amount loaned on or paid for the article, or the article for which it was traded;
             160          (f) the identification of the pawn or secondhand business owner or the employee,
             161      whoever is making the register entry; and
             162          (g) an accurate description of the article of property, including available identifying
             163      marks such as:
             164          (i) names, brand names, numbers, serial numbers, model numbers, color,
             165      manufacturers' names, and size;
             166          (ii) metallic composition, and any jewels, stones, or glass;
             167          (iii) any other marks of identification or indicia of ownership on the article;
             168          (iv) the weight of the article, if the payment is based on weight;
             169          (v) any other unique identifying feature;
             170          (vi) gold content, if indicated; and
             171          (vii) if multiple articles of a similar nature are delivered together in one transaction and
             172      the articles do not bear serial or model numbers and do not include precious metals or
             173      gemstones, such as musical or video recordings, books, or hand tools, the description of the
             174      articles is adequate if it includes the quantity of the articles and a description of the type of
             175      articles delivered.
             176          (2) A pawn or secondhand business may not accept any personal property if, upon
             177      inspection, it is apparent that serial numbers, model names, or identifying characteristics have
             178      been intentionally defaced on that article of property.
             179          Section 4. Section 13-32a-112 is amended to read:
             180           13-32a-112. Pawnshop and Secondhand Merchandise Advisory Board --


             181      Membership -- Duties -- Provide training -- Records of compliance -- Rulemaking.
             182          (1) There is created within the division the Pawnshop and Secondhand Merchandise
             183      Advisory Board. The board consists of 11 voting members and one nonvoting member:
             184          (a) one representative of the Utah Chiefs of Police Association;
             185          (b) one representative of the Utah Sheriffs Association;
             186          (c) one representative of the Statewide Association of Prosecutors;
             187          (d) three representatives from the pawnshop industry and three representatives from the
             188      secondhand merchandise business industry, who are all appointed by the director of the Utah
             189      Commission on Criminal and Juvenile Justice [(CCJJ)] and who represent three separate
             190      pawnshops, and three separate secondhand merchandise dealers, each of which are owned by a
             191      separate person or entity;
             192          (e) one law enforcement officer who is appointed by the board members under
             193      Subsections (1)(a) through (d);
             194          (f) one law enforcement officer whose work regularly involves pawn and secondhand
             195      businesses and who is appointed by the board members under Subsections (1)(a) through (d);
             196      and
             197          (g) one representative from the central database, who is nonvoting.
             198          (2) (a) The board shall elect one voting member as the chair of the board by a majority
             199      of the members present at the board's first meeting each year.
             200          (b) The chair shall preside over the board for a period of one year.
             201          (c) The advisory board shall meet quarterly upon the call of the chair.
             202          (3) (a) The board shall conduct quarterly training sessions regarding compliance with
             203      this chapter and other applicable state laws for any person who owns or is employed by a pawn
             204      or secondhand business [in] subject to this chapter.
             205          (b) Each training session shall provide not fewer than two hours of training.
             206          (4) (a) Each pawn or secondhand business in operation as of January 1 shall ensure one
             207      or more persons employed by the pawn or secondhand business each participate in no fewer
             208      than four hours of compliance training within that year.
             209          (b) This requirement does not limit the number of employees, directors, or officers of a
             210      pawn or secondhand business who attend the compliance training.
             211          (5) The board shall monitor and keep a record of the hours of compliance training


             212      accrued by each pawn or secondhand business.
             213          (6) The board shall provide each pawn or secondhand business with a certificate of
             214      compliance upon completion by an employee of the four hours of compliance training under
             215      Subsection (4).
             216          (7) (a) Each law enforcement agency that has a pawn or secondhand business located
             217      within its jurisdiction shall ensure that at least one of its officers completes four hours of
             218      compliance training yearly.
             219          (b) [This requirement] Subsection (7)(a) does not limit the number of law enforcement
             220      officers who attend the compliance training.
             221          Section 5. Section 13-32a-112.5 is enacted to read:
             222          13-32a-112.5. Division may exempt certain businesses by rule.
             223          (1) (a) The division may exempt specific classes of businesses from regulation under
             224      this chapter by rules made under Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
             225          (b) The division shall consult with the board in determining which classes of
             226      businesses to exempt under this section.
             227          (2) Businesses the division may exempt are classes of commercial enterprises clearly
             228      defined by administrative rule and that do not involve transactions in property that is
             229      recognized by law enforcement as regularly subject to theft and subsequent efforts to pawn or
             230      sell.
             231          Section 6. Section 13-32a-113 is amended to read:
             232           13-32a-113. Pawnbroker and Secondhand Merchandise Operations Restricted
             233      Account.
             234          (1) There is created within the General Fund a restricted account known as the
             235      Pawnbroker and Secondhand Merchandise Operations Restricted Account.
             236          (2) (a) The account shall be funded from the fees and administrative fines imposed and
             237      collected under Sections 13-32a-106 , 13-32a-107 , 13-32a-110 , and 13-32a-111 . These fees
             238      and administrative fines shall be paid to the division, which shall deposit them in the account.
             239          (b) The Legislature shall appropriate the funds in this account:
             240          (i) to the board for the costs of providing training required under this chapter, costs of
             241      the central database created in Section 13-32a-105 , and for costs of operation of the board; and
             242          (ii) to the division for management of fees and penalties paid under this chapter.


             243          (c) The board shall account to the division for expenditures.
             244          (d) The board shall account separately for expenditures for:
             245          (i) training required under this chapter;
             246          (ii) operation of the database;
             247          (iii) operation of the board; and
             248          (iv) costs of operation of the board.


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