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File #: 110384    Version:
Type: Ordinance Status: Passed
File created: 7/6/2011 In control: LICENSES COMMITTEE
On agenda: Final action: 5/22/2012
Effective date: 6/12/2012    
Title: A substitute ordinance relating to regulation of precious metal and gem dealers.
Sponsors: ALD. DAVIS
Indexes: LICENSES, PERMITS
Attachments: 1. City Attorney Opinion, 2. Amendment by Ald. Davis, 3. Hearing Notice List, 4. Hearing Notice List 3-5-12, 5. Hearing Notice List 5-7-12, 6. Memo, 7. Notice Published 6-11-12
Date Ver.Action ByActionResultTallyAction DetailsMeeting DetailsVideo
6/11/20123 CITY CLERK PUBLISHED   Action details Meeting details Not available
6/1/20123 MAYOR SIGNED   Action details Meeting details Not available
5/22/20123 COMMON COUNCIL PASSEDPass12:0 Action details Meeting details Not available
5/7/20122 LICENSES COMMITTEE HELD TO CALL OF THE CHAIRPass3:0 Action details Meeting details Not available
5/7/20122 LICENSES COMMITTEE RECONSIDEREDPass3:0 Action details Meeting details Not available
5/7/20122 LICENSES COMMITTEE SUBSTITUTED

Minutes note: Individual appearing: Ald. Joe Davis, 2nd Aldermanic District Ald. Coggs moved substitution of the file with Proposed Substitute A. (Prevailed 5-0)
Pass3:0 Action details Meeting details Not available
5/7/20123 LICENSES COMMITTEE RECOMMENDED FOR PASSAGEPass3:0 Action details Meeting details Not available
3/5/20122 LICENSES COMMITTEE HELD TO CALL OF THE CHAIR

Minutes note: Ald. Hamilton joined the committee at 8:47 a.m.
Pass4:0 Action details Meeting details Not available
2/29/20122 LICENSES COMMITTEE HEARING NOTICES SENT   Action details Meeting details Not available
2/13/20121 LICENSES COMMITTEE AMENDED

Minutes note: Individuals appearing: Ald. Joe Davis, 2nd Aldermanic District Officer Jeff Thiele, Milwaukee Police Department District 2 Richard Withers, Legislative Reference Bureau Ald. Davis gave an explanation on the intent of the proposed ordinance. His office received neighborhood complaints about individuals approaching residents, driving through neighborhoods, and distributing advertisements to purchase precious gold. This mobile or door to door secondhand jewelry business endeavor is not being regulated and records of purchases are not being kept. Such a black market and unstable atmosphere of burglary and unlicensed individuals or businesses are not desired. Assistant City Attorney Adam Stephens has helped create a legal and enforceable legislation before the committee. Ald. Kovac moved acceptance of the text amendment submitted by Ald. Davis. There were no objections. Ald. Kovac moved to amend the text amendment, submitted by Ald. Davis, to changed “Gen” under 92-10 to “Gem.” There were no objections. Ald. Coggs said that this ordinance makes it legal for people to drive around and be engaged in purchasing gold. Atty. Stephens gave background information and a summary of the proposed ordinance. He received complaints from the 12th aldermanic district office about businesses engaged in buying gold from people’s homes or from door to door. There is a significant loop hole in the ordinance that, as long as there was no fixed place of business, one could buy gold from door to door with no regulation. The current ordinance regulates only fixed businesses engaged in precious metal and gem dealings. The new ordinance requires anyone engaged in the buying or selling of secondhand gold or jewelry be licensed and operate from a fixed location where all transactions be recorded and kept. In addition, it requires applicants to submit a plan of operation on their application to the committee for review and approval at its discretion. Lastly, the ordinance enables the committee to deny an applicant or licensee in cases where there exists a congregation of persons in illegal activity or disruptive behavior associated to such precious metal gem dealer business. Ald. Bohl said that the proposed ordinance allows a person to go door to door, but he/she must adhere to record keeping requirements, NEWPRS requirements, and the maintenance of a fixed place for his/her business. Ald. Bohl asked was concerned that the registered fixed location of business could have no formal office hours, no one present at the site, and no established phone number for contact purposes. He asked if there were provisions or penalties in the proposed ordinance that addresses these concerns. Atty. Stephens replied that one’s Plan of Operation application will describe to the committee his/her business plans of the fixed place of business and operating hours. The committee has the discretion to review the Plan of Operation application. Ald. Davis said he was not opposed to Ald. Bohl’s suggestions to amend the proposed legislation to address those concerns. Ald. Coggs expressed concern that legalizing mobile precious gem dealers would still present issues in neighborhoods. She does not encourage this type of business extending to being mobile. She asked if Ald. Davis looked into prohibiting door to door previous metal and gem sales as oppose to regulating them. Ald. Davis responded that he didn’t want for the legislation to be prohibitive for new businesses but rather requiring business owners to responsibly operate by the rules that are in place. Officer Thiele gave a summary on an investigation conducted in the Walker’s Point area in the 12th aldermanic district. An individual papered the entire neighborhood, on cars and home doors, advertising to buy gold and anything people had. The police wanted to meet with this individual, but he did not want to meet in public place. An undercover operation led this individual to meeting with undercover police officers that led to an arrest of the individual. With his consent, police went to his house and found about five to six thousand dollars in cash, twenty thousand dollars worth of gold, and ledgers of purchases for last two years. Tickets were issued to him based on him not having a license. Officer Thiele said that having a fixed store front is extremely important for precious metal and gem dealings. Without such a regulation in place, the individual would have taken the unregulated and undocumented gold to Chicago and make money. Also, an attempted robbery of a man engaging in door to door purchases and sales of gold occurred in the 2nd aldermanic district. Being mobile would cause problems for people who are trying to do it right and for those skirting the system. It also is not safe for the community. From a burglary aspect, officers cannot investigate and retrieve stolen items without any records to look at. Officer Thiele, in his opinion, said that he preferred to make a requirement for a precious metal and gem business to have a fixed storefront and make door to door sales illegal. Ald. Bohl was concerned that such a broad and prohibitive measure may be illegal in terms of restraint of trade. Ald. Hamilton questioned the illegal activity that the individual was ticketed on in the undercover operation. Officer Thiele replied that about one hundred thousand dollars worth of tickets were issued to this person for having a valid license. Through his dealings, this person lacked declarations of ownership, identification checks, ledger or computer records to describe the gold, and NEWPRS transactions. Ald. Hamilton asked what additional requirements would result form the legislation. Ald. Bohl responded that the changes will result in one engaged in precious metal and gem dealings to need a license, have a fixed location listed, get contact information of customers, check identification, sign for transactions, take the items back to the fixed location, download and enter transactions in NEWPRS, hold items for thirty days, and allow for the police to investigate or search for stolen items. Sgt. Raden said that his department has seen a lot of these door to door dealings. Most of the persons going from door to door buying gold or jewelry are from outside the city or state. They would come for two weeks and leave the city. Most are from Chicago, and they come with their vans. These persons are not really from the city itself or from licensed locations in the city. Officer Thiele said that restricting this type of business to be legal from only a fixed location would not hinder new businesses wanting to purchase or sell gold or used jewelry. He said that since 2009, new fixed locations have emerged with their licenses and operated. Police will not regulate rummage sales, but be focused on door to door or mobile persons. Ald. Coggs said that people will not abide by the rules and license requirements even with this proposed legislation in place. People can skirt the ordinance in many ways. There can be BOZA issues, and people can just choose an acceptable fixed location for application purposes and not operate from there. Officer Thiele added that using a residential home as the fixed location of business could result in issues, such as traffic and congregation of people in a residential area. Ald. Bohl said that it becomes a slippery slope to prohibit this type of businesses in residential units with other businesses trades that can operate from a residential home. Ald. Bohl requested that this matter be redrafted and an opinion be given in advance from the City Attorney’s office to determine if making this type of business legal from only a fixed location is legal and enforceable and not break restraint of trade. Ald. Hamilton moved to hold to the call of the Chair. (Prevailed 5-0)
Pass5:0 Action details Meeting details Not available
2/13/20122 LICENSES COMMITTEE HELD TO CALL OF THE CHAIRPass5:0 Action details Meeting details Not available
2/13/20121   AMENDED

Minutes note: Individuals appearing: Ald. Joe Davis, 2nd Aldermanic District Officer Jeff Thiele, Milwaukee Police Department District 2 Richard Withers, Legislative Reference Bureau Ald. Kovac moved to accept the text amendment submitted by Ald. Davis. There were no objections. Ald. Kovac moved to amend the accepted text amendment to change the word "Gen" to "Gem" on page 2. There were no objections.
 5:0 Action details Meeting details Not available
2/8/20121 LICENSES COMMITTEE HEARING NOTICES SENT   Action details Meeting details Not available
2/8/20121 LICENSES COMMITTEE HEARING NOTICES SENT   Action details Meeting details Not available
7/11/20110 LICENSES COMMITTEE HELD TO CALL OF THE CHAIR

Minutes note: Not acted on.
Pass5:0 Action details Meeting details Not available
7/8/20110 LICENSES COMMITTEE HEARING NOTICES SENT   Action details Meeting details Not available
7/8/20110 LICENSES COMMITTEE HEARING NOTICES SENT   Action details Meeting details Not available
7/8/20110 LICENSES COMMITTEE HEARING NOTICES SENT   Action details Meeting details Not available
7/8/20110 LICENSES COMMITTEE HEARING NOTICES SENT   Action details Meeting details Not available
7/6/20110 COMMON COUNCIL ASSIGNED TO   Action details Meeting details Not available
Number
110384
Version
SUBSTITUTE 3
Reference
 
Sponsor
ALD. DAVIS
Title
A substitute ordinance relating to regulation of precious metal and gem dealers.
Sections
92-10-1-c  am
92-10-2  rc
92-10-3-e  rn
92-10-3-e  cr
92-10-5-a  am
92-10-5-d  rn
92-10-5-d  cr
92-10-5-e  rn
92-10-5-e  cr
92-10-6-c  am
92-10-6-j  cr
92-10-8  am
Analysis
This ordinance requires a precious metal and gem dealer licensed by the city to maintain a fixed place of business in the city at which all records of transactions conducted within the city are kept. Factors relating to the suitability of the business premises may be considered in decisions to authorize issuance of a new license and in decisions to renew, suspend or revoke a license.
 
The ordinance includes the same exceptions as s. 134.71, Wis. Stats., regulating secondhand article and jewelry dealers.  
 
The ordinance clarifies procedures for application for and, renewal, suspension and revocation of, a precious metal and gem dealer license.
 
The ordinance also requires that an application include a plan of operation which requires disclosure of the following:
 
1.  The principal location of the applicant's business within the city at which all required records are kept and available for inspection.
 
2. The location or locations at which the applicant will conduct business as a precious metal and gem dealer within the city; and
 
3. If transactions involving the sale, purchase or exchange of precious metals or gems are conducted at locations in addition to the identified business premises, a description of the manner in which such transactions will be conducted including whether transactions will occur at temporary locations, door-to-door or otherwise.
 
Body
The Mayor and Common Council of the City of Milwaukee do ordain as follows:
 
Part 1. Section 92-10-1-c of the code is amended to read:
 
92-10. Precious Metal and Gem Dealer's License. 1. DEFINITIONS.
 
c. "Precious metal and gem dealer" means any person, corporation, partnership or association which engages in any transaction of buying, selling or receiving secondhand jewelry, sterling silverware or gold or silver coins or bullion to and from the public [[within the city from a fixed and regular place of business]]. "Precious metal and gem dealer" does not include a business which smelts, refines, assays or manufactures precious metals, gems or valuable articles and has no retail operation open to the public.
 
Part 2. Section 92-10-2 of the code is repealed and recreated to read:
 
2. LICENSE REQUIRED. a. No person, corporation, partnership or association shall engage in the business of dealing in, selling and exchanging secondhand jewelry, sterling silverware or gold and silver coins or bullion without having first obtained a license as provided in this section or without having first obtained a license issued by another municipality as provided in s. 134.71, Wis. Stats.
 
b. The requirements of this section shall not apply to:
 
      b-1. Any transaction at an occasional garage or yard sale, an estate sale, a gun, knife, gem or antique show or a convention.
 
      b-2. Any transaction with a licensed secondhand jewelry dealer.
 
      b-3. Any transaction entered into by a person while engaged in a business of smelting, refining, assaying or manufacturing precious metals, gems or valuable articles if the person has no retail operation open to the public.
      b-4. Any transaction between a buyer of new jewelry and the person who sold the jewelry when new which involves the return of the jewelry or the exchange of the jewelry for different, new jewelry.
 
      b-5. Any transaction as a purchaser of secondhand jewelry from a charitable organization if the secondhand jewelry was a gift to the charitable organization.
 
      b-6. Any transaction as a seller of secondhand jewelry which the person bought from a charitable organization if the secondhand jewelry was a gift to the charitable organization.
 
Part 3. Section 92-10-3-e of the code is renumbered 92-10-3-f.
 
Part 4. Section 92-10-3-e of the code is created to read
 
e. A plan of operation that includes, in addition to the information required in pars. a to d, the following:
 
e-1. The principal location of the applicant's business within the city at which all records required under s. 92-12 are kept and available for inspection.
 
e-2. The location or locations at which the applicant will conduct business as a precious metal and gem dealer within the city.
 
e-3. If transactions involving the sale, purchase or exchange of precious metals or gems are conducted at locations in addition to the identified business premises, a description of the manner in which such transactions shall be conducted, including whether transactions will occur at temporary locations, door-to-door or otherwise.
 
e-4. The hours of business operation.
 
e-5. The status of all permits relating to occupancy and business operations upon business premises.
 
e-6. Plans the applicant has to ensure that business is not conducted with minors, except as provided in sub. 6-h.
e-7. Plans the applicant has to provide security for the business premises, for business records and for transactions and transportation involving precious metals and gems conducted at locations other than identified business premises.
 
e-8. A description of the anticipated proportion of the business, in volume of sales or monetary value, that will involve transactions in precious metals and gems during the license period, and the proportion of any transactions by percentage that will constitute sales, purchases or other exchanges of gold.
 
e-9. Identification of any other licenses held by the applicant or attached to the premises.
 
Part 5. Section 92-10-5-a of the code is amended to read:
 
5. ISSUANCE; TERMS. a. The common council may authorize or deny the license
>> and, upon authorizing issuance of a license, may require amendment of a plan of operation for promotion and protection of the health, welfare and safety  of the public<<.
 
Part 6. Section 92-10-5-d and e of the code is renumbered 92-10-5-f and g.
 
Part 7. Section 92-10-5-d and e of the code is created to read:
 
d. In authorizing the issuance, denial, nonrenewal or revocation of a license, or conditioning the issuance of a license upon amendment to the plan of operation, the common council may consider factors affecting the health, welfare and safety of the public that include probative evidence of factors provided in s. 85-4-4-c relating to activities of persons who congregate or may congregate on or around the business premises.
 
e. No new or renewal license may be granted to an applicant if the application does not include the plan of operation required in sub. 3-f.
 
Part 8. Section 92-10-6-c of the code is amended to read:
 
6. REGULATIONS.
 
c. Recordkeeping. Every licensed precious metal and gem dealer shall keep a transaction description record as stipulated in s. 92-12 for any property purchased or exchanged>> and shall maintain required records at the location identified in the application and plan of operation<<.
 
Part 9. Section 92-10-6-j of the code is created to read:
 
j. Changes to be reported. Any change to information contained in the application or plan of operation shall be reported to the city clerk within 10 days.
 
Part 10. Section 92-10-8 of the code is amended to read:
 
8. PENALTY. a. Any person, firm or corporation violating this section shall, upon conviction for a first offense, forfeit not less than $50 nor more than $1,000, together with the costs of prosecution and, in default of payment, [[shall be imprisoned in the house of correction or county jail not to exceed 6 months, or until such forfeiture costs are paid in full]] >>may be imprisoned as provided by law<<.
 
b. Any person, firm or corporation violating this section shall upon conviction for the second and subsequent offenses, forfeit not less than $500 nor more than $2,000, together with the costs of prosecution, and in default of payment, [[shall be imprisoned in the house of correction or county jail not to exceed 6 months, or until such forfeiture costs are paid in full]]>>may be imprisoned as provided by law<<.
 
LRB
APPROVED AS TO FORM
 
 
____________________________
Legislative Reference Bureau
Date:  ______________________
Attorney
IT IS OUR OPINION THAT THE ORDINANCE
IS LEGAL AND ENFORCEABLE
 
 
____________________________
Office of the City Attorney
Date:  ______________________
 
Requestor
 
Drafter
LRB128741-3.0
Richard L. Withers
5/3/2012