Legislature(2009 - 2010)BELTZ 105 (TSBldg)

04/02/2010 01:30 PM Senate JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved SCS CSHB 101(JUD) Out of Committee
Heard & Held
Heard & Held
                       SB 292-PAWNBROKERS                                                                                   
CHAIR FRENCH announced the consideration  of SB 292. It was heard                                                               
1:55:48 PM                                                                                                                    
JOSH  TEMPEL, Staff  to Senator  Charlie Huggins,  sponsor of  SB
292,  provided  a  sectional   analysis.  Sections  1-4  separate                                                               
pawnbroker  regulations  from those  that  apply  to second  hand                                                               
stores  and address  electronic record  keeping. Responding  to a                                                               
question,  he   explained  that   the  Department   of  Commerce,                                                               
Community   and  Economic   Development  (DCCED)   would  provide                                                               
regulatory oversight.                                                                                                           
Section 5 adds new sections to  AS 08.76. Sec. 08.76.100 and Sec.                                                               
08.76.110 relate to how pawnbrokers  are licensed. Sec. 08.76.130                                                               
relates  to  withdrawal  of a  pawnbroker  application  and  Sec.                                                               
08.76.140 relates  to the  duration and  renewal of  a pawnbroker                                                               
license, including  a penalty for  late renewals.  Sec. 08.76.160                                                               
maintains  the  current $500  limit  on  pawn transactions.  Sec.                                                               
08.76.170 limits pawnbroker transactions  to persons who are over                                                               
18  years  of age,  not  under  the  influence  of alcohol  or  a                                                               
controlled  substance,  [and  with  valid  identification.]  Sec.                                                               
08.76.180 and  Sec. 08.76.190 relate  to the  record requirements                                                               
for   pawnbroker   transactions.   Sec.  08.76.200   requires   a                                                               
pawnbroker  to  provide   the  seller  with  a   receipt  of  the                                                               
transaction.  Sec. 08.76.210-76.230  relate to  interest and  fee                                                               
restrictions on transactions.                                                                                                   
CHAIR FRENCH asked  if this would limit the amount  of interest a                                                               
pawnbroker could charge.                                                                                                        
MR. TEMPEL  replied the bill  maintains the current  limit, which                                                               
is  20 percent  for  each  30-day period.  The  fee structure  is                                                               
changed slightly. A maximum $5  per transaction processing fee is                                                               
allowed as is a $5 firearm processing fee.                                                                                      
1:59:15 PM                                                                                                                    
CHAIR FRENCH asked  if the firearm processing fee  is in addition                                                               
to the interest charged on the loan.                                                                                            
MR. TEMPEL said that's correct.                                                                                                 
SENATOR  COGHILL asked  why there's  also a  governmental fee  on                                                               
MR.  TEMPEL explained  that the  state doesn't  currently license                                                               
firearms  but the  governmental fee  was included  to accommodate                                                               
that future eventuality.                                                                                                        
Continuing with  sectional analysis, he said  that Sec. 08.76.240                                                               
deals with redeeming pledged property.  Sec. 08.76.250 deals with                                                               
extending pawn  agreements if  the pledgor  isn't able  to redeem                                                               
their property after the agreed  time. This provides an automatic                                                               
30-day extension  with a negotiated  agreement beyond  that time.                                                               
Sec.  08.76.260  deals  with  the  safe  and  secure  storage  of                                                               
property  left in  the pawnshop.  Sec. 08.76.270  deals with  the                                                               
redemption of  property and  paying the  financed amount  and the                                                               
finance  fee. Sec.  08.76.280 deals  with the  military exemption                                                               
and aligns with the Civil Relief Act.                                                                                           
2:02:02 PM                                                                                                                    
CHAIR  FRENCH added  that this  provision  basically freezes  the                                                               
interest charges  for military personnel  who are called  away to                                                               
MR. TEMPEL agreed; when a  service member deploys interest on the                                                               
pawned item freezes  until [60 days after] he or  she returns, at                                                               
which time the prior agreement is in effect.                                                                                    
Sec.  08.76.290-76.310 talks  about  who pawnshops  can hire  and                                                               
prohibits  waivers  of  consumer   rights  that  are  granted  in                                                               
statute. Sec.  08.76.320-76.400 talks  about stolen  property and                                                               
hold  orders that  police and  courts can  issue. Sec.  08.76.410                                                               
requires  pawnshops  to  report  their  inventory  to  local  law                                                               
enforcement on  a weekly basis.  Sec. 08.76.430 gives  police the                                                               
ability  to  inspect  pawnshops   and  their  books  when  deemed                                                               
necessary.  Sec.  08.76.440  provides disciplinary  measures  for                                                               
pawnbrokers. Sec.  08.76.460 talks  about how to  bring municipal                                                               
pawnbroker  regulations into  compliance with  the new  statutory                                                               
requirements. [Sec. 08.76.590] contains definitions.                                                                            
2:04:31 PM                                                                                                                    
Section  6 defines  pawnbroker for  the Uniform  Commercial Code.                                                               
Section 7  repeals the electronic  recording requirements  [in AS                                                               
08.76.010(b) and 08.76.040.] Section  9 talks about transitioning                                                               
municipal licensing  the state. Sections  11 and 12  establish an                                                               
effective date of July 1, 2011.                                                                                                 
CHAIR  FRENCH recalled  that  during the  2007  crime summit  the                                                               
Wasilla  police chief  argued for  electronic  pawn reporting  to                                                               
help  deal  with  stolen  property issues.  Noting  that  a  bill                                                               
instituting  that was  passed the  next year,  he asked  what the                                                               
feedback had been and why that should be rolled back.                                                                           
MR. TEMPEL  said the sponsor  is willing  to return to  what this                                                               
committee  passed   in  2007,  but   the  bill  was   written  to                                                               
accommodate  those pawnbrokers  who  run an  honest business  but                                                               
quite simply don't  like using computers and don't  want to spend                                                               
$7,000-$10,000  for  an electronic  system.  He  added that  most                                                               
pawnbrokers in the state already  use electronic reporting and by                                                               
most accounts the police are happy with the relationship.                                                                       
2:07:28 PM                                                                                                                    
MR. TEMPEL noted that he  contacted the Wasilla Police Department                                                               
and the  current investigator indicated  that things  are working                                                               
fairly  well  in the  Mat-Su  Valley.  The investigator  supports                                                               
electronic  reporting in  the future,  but  doesn't believe  that                                                               
it's essential right now.                                                                                                       
CHAIR FRENCH  asked what's included  in an electronic  report and                                                               
if it's in spreadsheet format.                                                                                                  
MR. TEMPEL  said the report is  a list of everything  in the shop                                                               
in a  format similar  to a spreadsheet.  The program  that tracks                                                               
the items is expensive and  it's necessary if the pawnbroker does                                                               
electronic reporting.                                                                                                           
SENATOR EGAN referenced Sec. 08.76.190  on page four and asked if                                                               
pawnbrokers could record items electronically.                                                                                  
MR. TEMPEL replied it can be done either way right now.                                                                         
2:10:06 PM                                                                                                                    
SENATOR WIELECHOWSKI observed that the  language on page 2, lines                                                               
7-10, must be very old since  it doesn't include any reference to                                                               
TVs  or  computers.  He  asked  if  the  sponsor  had  considered                                                               
amending that language.                                                                                                         
ME.TEMPEL agreed that  it's old language, but  it isn't exclusive                                                               
so  anything with  an identifying  number could  be included.  He                                                               
noted that  this section applies  to second hand  articles rather                                                               
than pawned items.                                                                                                              
SENATOR WIELECHOWSKI  pointed out that there  is similar language                                                               
in Section 5 on page 4, lines 8-11.                                                                                             
MR. TEMPEL  said the sponsor would  be happy to add  to the list,                                                               
but  it's difficult  to know  where to  stop list.  He reiterated                                                               
that the current language isn't exclusionary.                                                                                   
SENATOR   WIELECHOWSKI  asked   if  it's   common  practice   for                                                               
pawnbrokers to record identifying numbers for the pawned item.                                                                  
MR. TEMPEL answered yes.                                                                                                        
SENATOR WIELECHOWSKI  asked if  pawnbrokers are  legally required                                                               
to record  identifying numbers  on all  items because  he doesn't                                                               
read it that way.                                                                                                               
MR. TEMPEL read  the language on page 4, lines  8-11, and said it                                                               
includes a firearm, a watch,  a camera, or optical equipment, but                                                               
it's not limited to those items.                                                                                                
2:13:29 PM                                                                                                                    
SENATOR EGAN agreed with Senator Wielechowski's interpretation.                                                                 
MR. TEMPEL said  the sponsor would be happy to  add items if it's                                                               
not clear.                                                                                                                      
CHAIR  FRENCH said  he sympathetic  to people  who don't  want to                                                               
work with computers, but he'd  hate to go backwards on electronic                                                               
SENATOR EGAN asked  for confirmation that Sec.  08.76.460 on page                                                               
12,  line  24, says  that  municipal  regulations can't  be  more                                                               
restrictive than state regulations.                                                                                             
2:16:28 PM                                                                                                                    
MR.  TEMPEL  explained  that  this   removes  the  licensing  and                                                               
regulating  burden  from  municipalities and  provides  statewide                                                               
SENATOR  EGAN  asked if  municipalities  would  adopt this  under                                                               
CHAIR  FRENCH  said  a  municipality  could  elect  to  adopt  an                                                               
ordinance  but it  couldn't be  more restrictive  than the  state                                                               
SENATOR EGAN opined  that including the section  didn't make much                                                               
SENATOR WIELECHOWSKI agreed that it's a little unusual.                                                                         
2:19:16 PM                                                                                                                    
CHAIR FRENCH announced he would hold SB 292 in committee.                                                                       

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