Agenda Item 4A
October 14,2014
Action
MEMORANDUM
October 10, 2014
,
TO:
FROM:
County Council
Josh Hamlin, Legislative
Attorn~
\
SUBJECT:
Action: Bill 38-14, Secondhand Personal Property - Definitions - Payment
Public Safety Committee recommendation (2-0): enact Bill 38-14 as introduced.
Bill 38-14, Secondhand Personal Property - Definitions - Payment, sponsored by the
Council President at the request of the County Executive, was introduced on July 29. A public
hearing was held on September 16 and a Public Safety Committee worksession was held on
October 2.
Bill 38-14 would exclude certain items of personal property with resale value below a
certain dollar amount from the definition of secondhand personal property. The threshold
amount would be set by method (3) regulation. The bill would also permit a secondhand
personal property dealer to pay to purchase secondhand personal property by store credit.
Current law requires payment by check.
Background
The County's Secondhand Personal Property Law, Chapter 44A of the County Code, was
first enacted in 1983 and provides law enforcement officials with a tool necessary to recover
stolen property and identify suspects who commit crimes in the County. The law requires a
dealer in secondhand personal property to obtain a license from the Office of Consumer
Protection, report all transactions to the Police, and hold all property received for a certain period
of time after reporting the transaction. The Police can then check stolen property reports against
the list of secondhand personal property received or sold by dealers.
"Personal property" is defined in Chapter 44A as follows:
Personal property
includes radios and other audio equipment;
televisions and other video equipment; photographic, optical and
computer equipment; typewriters, calculators and other electronic
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or electrical home or office appliances, machines or equipment;
fireanns; bicycles; jewelry; furs, leather goods; watches; paintings;
fine or historic china, crystal, glass or porcelain; objets d'art; power
tools; carpets and rugs; musical instruments; and any item
serialized, marked for identification purposes, or engraved.
The current definition of "secondhand personal property" is as follows:
Secondhand personal property
means previously owned personal
property offered for sale or as collateral .by any person, other than
the manufacturer, wholesale distributor, or original retail seller,
acting in the ordinary course of business. Secondhand personal
property does not include personal property purchased at a public
sale.
In addition
to
the licensing, reporting, and retention requirements in the law, Chapter
44A-9 requires that a dealer "pay for each item of secondhand personal property by check,
except as permitted by regulation under method (3)." The applicable regulation, 44A.03.01.06,
requires that a dealer pay for all secondhand personal property by check, unless the total amount
paid does not exceed $10.00 for each transaction.
Public Hearing and Correspondence
Captain Terrence Pierce of the Montgomery County Police Department was present at the
public hearing to answer any questions the Councilmembers might have that related to the
memorandum in support of the Bill from Chief Manger. See ©13. There were no questions for
Captain Pierce, and there were no other speakers at the September 16 public hearing.
In addition to the memorandum from Chief Manger, correspondence supporting the Bill
was received from Laura Bishop, Vice President of Public Affairs for Best Buy (©14), Gerard
Keegan of CTIA-The Wireless Association (CTIA) (©15), and Nancy Kline, Owner of Uptown
Cheapskate in Rockville (©16). Best Buy supports the Bill because it would allow the company
to offer its Best Buy Trade-in Program, which allows customers to trade in old consumer
electronics in exchange for gift cards. Similarly, CTIA, a non-profit corporation that represents
the interests of the wireless communications industry, supports the Bill because the change in
method of payment would expressly allow the exchange of mobile phones for credit towards new
ones, a practice common
in
the wireless industry.
In
its letter, CTIA also requested an additional
amendment to the bill specifically excluding a wireless service provider, its agents, and its
retailers, from the defmition of "dealer" in the Secondhand Personal Property Law. Nancy Kline
of Uptown Cheapskate also generally supports the Bill, but requests an amendment to the
defmition of "secondhand personal property" concerning the dollar threshold for exclusion from
the definition.
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Issues for Committee Discussion
1.
Should items with a resale value below a certain dollar threshold be exempt from
the Secondhand Personal Property Law's requirements?
Under current law, secondhand personal property dealers must maintain, and provide to
police, records containing specific information for
each
item of secondhand personal property
bought or received (see ©9), and must retain each
item
of secondhand personal property for at
least 21 days after it is bought or received (see ©9-10). These requirements include thrift stores
which routinely receive and resell items within the law's definition of secondhand personal
property. The items sold by thrift stores are generally donated, and often of low monetary value,
but the recordkeeping and retention requirements still apply. In such instances, the requirements
place a burden on the seller while having minimal to no impact on furthering the objectives of
the law. In his letter, Chief Manger indicates that reducing the number of items entered into the
pawn-tracking software used by the Police Department would allow the Department to expedite
review of secondhand personal property transactions and compare them to items reported stolen.
2.
Should dealers be permitted to pay for secondhand personal property by store
credit?
Existing law requires payment for secondhand personal property to be made by check.
Since the enactment of the law, the practice of exchanging older electronic items for store credit
toward a new one has become widespread. Chief Manger indicates that the retail industry has
stated that this practice allows for the tracking of the identity of the person to whom a gift card or
store credit is issued in a manner that is sufficient for the Police Department to pursue a criminal
investigation, if necessary. This proposed change to the law only provides for an additional
means of payment for secondhand personal property; the recordkeeping and retention
requirements would remain the same.
3.
Should a wireless service provider, its agents, and its retailers be excluded from the
definition of "dealer?"
CTIA, in its letter supporting the Bill, has requested an additional amendment to the
Secondhand Personal Property law. The requested amendment would expressly exempt "a
wireless service provider, its agents or retailers ..." from the law's definition of "Dealer." CTIA
contends that transactions involving wireless service providers are governed by the federal
Stored Communications Act (SeA), and that the requested amendment is necessary to avoid
having County law preempted.
Congress enacted the SCA, 18 U.S.C. 121,
§§
2701-2712, in 1986 as Title II of the
Electronic Communications Privacy Act of 1986. Under the SCA, "a provider of ... electronic
communication service to the public shall not knowingly divulge a record or other information
pertaining to a subscriber or customer of such service ... to any governmental entity" unless a
statutory exception applies.
It
is possible that some of the information included in the record
provided to police by a dealer under County law may be subject to the SCA's prohibitions on
disclosure. However, it does not appear that the recordkeeping and retention requirements of the
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County law
generally
conflict with the SCA. Thus, a wholesale exemption of wireless service
providers and their agents or retailers may not be necessary to avoid potential conflict with the
SCA. If such a change to the County law is necessary, it should
be
made after full consideration
by the Police Department and the Office of Consumer Protection.
Council staff recommendation:
Because such a change could have a significant impact on the
ability of County law enforcement to investigate possible crimes related to these transactions,
staff recommends not making the amendment requested by CTIA to Bill 38-14, unless requested
by the Executive branch. If the Committee wishes to clarify that the County law does not require
the disclosure of information that is subject to the SCA's prohibitions on disclosure, it could do
so with the following amendment:
Add a new paragraph after line
13
at
~
2
as follows:
Sec. 44A-3. Required books and records; reporting requirements.
@
Nothing in this Section requires
~
dealer to give to the Police any information that
is prohibited from disclosure under applicable State or federal law.
*
*
*
*
4.
*
*
Should the dollar threshold for exclusion from the defmition of "secondhand
personal property be "resale value" or "amount paid by the reseUer?
In her letter, Nancy Kline, owner of the Uptown Cheapskate store in Rockville requested
that the Bill be amended to provide that the dollar threshold for items to
be
excluded from the
defmition of "secondhand personal property" be dependent on the price paid by the reseUer
rather than on the "resale value," as the Bill currently provides. The Police are generally
concerned with the "street value" of secondhand personal property, so the price at which
it
is
resold appears to be to proper measure. Additionally, making the exclusion dependent on the
price paid by the reseller would complicate enforcement, because that amount, unlike the resale
price, is not easily available to law enforcement.
Council staff recommendation:
Do not amend the Bill to provide that the dollar threshold for
items to be excluded from the definition of "secondhand personal property" be dependent on the
price paid by the reseUer rather than on the "resale value."
Committee DiscussionlRecommendation
The Public Safety Committee considered Bill 38-14 on October 2,2014. The Committee
heard an overview of the value of the Secondhand Personal Property law to the Police
Department in solving crimes, and discussed the issues raised in the packet. The Committee (2­
0, Councilmember Berliner absent) recommended enactment of Bill 38-14 as introduced.
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This packet contains:
Bi1138-14
Legislative Request Report
Memo from County Executive
Fiscal and Economic Impact statement
County Code Chapter 44A (excerpt)
Chief of Police Support Memo
Best Buy letter
CTIA letter
Nancy Kline letter
Circle
#
1
3
4
5
8
13
14
15
16
F:\LAW\BILLS\I438 Secondhand Personal Property\Action Memo.Doc
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Bill No.
38-14
Concerning: Secondhand
Personal
Property - Definitions - Payment
Revised:
07/0912014
Draft No. _2_
Introduced:
July 29,2014
Expires:
January 29,2016
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _--::-:_ _ _ _ _ __
Sunset Date:
.....!N~o~n~e
_ _ _ _ __
ChI _ _, Laws of Mont Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the request of the County Executive
AN ACT to:
(1)
(2)
(3)
exclude certain items of personal property with resale value below a certain dollar
amount from the deftnition of secondhand personal property;
permit payment by store credit; and
generally amend the secondhand personal property law
By amending
Montgomery County Code
Chapter 44A, Secondhand Personal Property
Sections 44A-l and 44A-9
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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Bill
No.
38-14
1
2
Section
1.
Sections 44A-l and 44A-9 are amended as follows:
44A-l.
Definitions.
...
3
4
When used in this Chapter:
*
...
5
6
7
Secondhand personal property
means previously owned personal property
offered for sale or as collateral by any person, other than the manufacturer,
wholesale distributor, or original retail seller, acting
in
the ordinary course of
business. Secondhand personal property does not
include~
8
9
10
ill
ill
personal property purchased at public sale[.]; or
items of personal property that have
~
resale value below
~
dollar
threshold specified for that
trpe
of personal property in
regulation adopted under method
ill
...
~
11
12
13
14
15
16
17
*
*
44A-9.
Payments by check or store credit.
A dealer must pay for each item of secondhand personal property by check or
Qy
granting
~
credit toward the purchase of other merchandise from the dealer, except
as permitted by regulation under method (3).
18
19
Approved:
20
21
Craig Rice, President, County Council
Date
22
Approved:
23
Isiah Leggett, County Executive
Date
F:\LAW\BILLS\1438 Secondhand Personal Property\BiII2.00c
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LEGISLATIVE REQUEST REPORT
Bi1138-14
Secondhand Personal Property
-
Definitions
-
Payment
DESCRIPTION:
Exempts certain items of personal property below a certain dollar
threshold from the definition of secondhand personal property and
allows for payment by check or store credit
Amendments are needed to reflect changes in the marketplace.
Response to changes in the marketplace and address concerns
expressed by retail thrift stores and national chain retailers.
Office of Consumer Protection and Police Department
Attached
Attached
To be requested.
To be researched.
Office of Consumer Protection
Police Department
Office of the County Attorney
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
No change
f:\Iaw\bills\1438 secondhand personal property\legislative request report.do
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.. I
OFflCEOFTHECOUNTYEXECUTNE
18mb
Leggett
County Executive
ROCKVILLE, MARYLAND 20850
MEMORANDUM
June 23, 2014
TO:
Craig
Rice,
President
Montgomery County Council
lsiah Leggett, County
....
~
FROM:
SUBJECT:
Exe<;U1jv,,=-0r
--11fi62i~--­
Decision Memorandum - Proposed Legislation to Amend County Code
Chapter 44A, Secondhand Personal Property
Transmitted for your review are proposed amendments to Chapter 44A,
Secondhand Personal Property.
The proposed amendments are intended to allow merchants to: i) "pay"
consumers for secondhand personal property with a store credit rather than only by
check;
and
ii) exclude specified secondhand personal property below a certain dollar
threshold from these regulations. There is no additional expected fiscal impact to
Montgomery County associated with these proposed amendments.
If
you have any questions or would like any additional information, please
contact Eric Friedman, Director, Office of Consumer Protection, at (240) 777-3636.
IL/esf
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Fiscal Impact Statement
Legislation to Amend County Code Chapter 44A, Secondhand Personal Property
1. Legislation Sun:unary
The purpose ofthis code amendment
is
to respond to changes in the marketplace and to
address concerns expressed
by
retail
thrift
stores and national chain retailers. The .
proposed amendments are intended to allow merchants to:
i)
''pay'' consumers for
seepD.dhand personal property with store credit rather
than
only by check;
ii)
exclude
certain items ofpersonal property that have a resale value below a certain dollar threshold
from the deflnition of secondhand personal property.
The proposed changes update the code for changes in the marketplace. The changes do
not affect the current duties or responsibilities ofthe Department ofPolice or Office of
Consumer Protection.
2.
An
estimate of changes
in
County revenues and expenditures regardless of whether the
revenues or
exp~nditures
are assumed
in
the recommended or approved budget. Includes
source ofinformation" assumptions, and methodologies used..
No impact on revenues or expenditures.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
No impact on revenues or expenditures.
4.
An
actuarial analysis through the entire amortization period for legislation that would
affect retiree pension or group insurance costs.
Not Applicable
5. Later actions
that
may affect future revenue and expenditures
if
the legislation authOlizes
future
spending.
Not Applicable
6.
An
estimate of the staff time needed to implement the legisdlation.
The
staff
time for the Department of Police and Office of Consumer Protection to
disseminate information related to the changes to secondhand personal property dealers
would
be
minimal and can
be
accomplished online.
7.
An
explanation ofhow the addition of new staff responsibilities would affect other duties.
The impact will be minimal as information related
to
changes
will
be disseminated online
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·.
I
8.
An
estimate of costs when an additional appropriation is needed.
Not Applicable
9.
A description of any variable that could affect revenue
and
cost estimates.
Not Applicable
10. Ranges ofrevenue or expenditures
that
are. uncertain or difficult
to
project.
Not Applicable
11. If legislation
is
likely to have no fiscal impact, why that.
is
the case.
Not Applicable
12.
Other fiscal impacts
or
comments.
None
13.
The following contributed to and concurred with this analysis (enter name
and
dept.)
. Eric Friedman, Director, Office of Consumer Protection
Jahantab Siddiqui, Management
&
Budget Specialist, OMB
JenniferHtlghes,fbirector
Office ofManagement
and
Budget
Date
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Economic Impact Statement
Bill ##-14, Amending The Defmition Of Secondhand Personal Property
And Allowing Payment By Store Credit .
. Background:
This legislation would amend Sections 44A-I and 44A-9 of the County Code to allow
merchants to:
• Pay consumers for secondhand. personal property
with
store credit. The current
law only allows payment by check as permitted under current regulation (Section
44A-9);
• Exempt certain items of personal property that have
a
resale value below a certain
dollar threshold from the definition of secondhand personal property (Section
44A-I).
1.
The sou.'ces of information, assumptions, and methodologies used.
The source of information
in
preparation of the economic impact statement is the
Office of Consumer Protection (OCP). .
2. A description of any variable that could affect the economic impact estimates.
Bill ##-14 amends two sections of Chapter 44A - Secondhand Personal Property that
define the value of secondhand personal property under Chapter 44A and allows store
credit
as
payment to customers. Therefore, there are no economic variables that are
affected by the amendments to Chapter 44A.
3.
The Bill's positive or negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
Bill ##-14 would have no economic impact on employment, spending, saving.
investment, incomes, and property values in the County.
Bill ##-]4
allows payment
as
store
credit as well as
the
current
policy
of
payment by check. Therefore Bill
##­
14
has no affect on
business
or personal income.
4.
If
a Bill is likely to have no economic impact, why is tbat the case?
Please see paragraph #3.
5. The following contributed to or concurred with this analysis:
David Platt and Rob
Hagedoom, Finance; Eric Friedman, Director, Office of Consumer Protection.
Page 1 of
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Chapter 44A. Secondhand Personal Property.
(Excerpt)
Sec. 44A-l. Definitions.
When used in this Chapter:
Automated Purchasing Machine
means a self-service device that:
(l)
is designed to dispense payment in exchange for personal property; and
is also known as a reverse vending machine.!.
(2)
Dealer
means a person conducting the business of buying, receiving, or marketing
secondhand personal property in the County, including:
(1)
an auctioneer; and
(2)
a person who buys, receives, markets, or assists in the sale of secondhand
personal property through the Internet or another electronic method.
Director
means the Chief of Police.
Person
includes an individual, corporation, business trust, estate, trust, partnership
association, 2 or more persons having a joint or common interest, or any other legal or
commerciru entity.
Personal property
includes radios and other audio equipment; televisions and other video
equipment; photographic, optical and computer equipment; typewriters, calculators and other
electronic or electrical home or office appliances, machines or equipment; firearms; bicycles;
jewelry; furs, leather goods; watches; paintings; fine or historic china, crystal, glass or porcelain;
objets d'art; power tools; carpets and rugs; musical instruments; and any item serialized, marked
for identification purposes, or engraved.
Police
means the County Police Department or another police department having
jurisdiction.
Secondhand personal property
means previously owned personal property offered for
sale or as collateral by any person, other
than
the manufacturer, wholesale distributor, or original
retail seller, acting in the ordinary course of business. Secondhand personal property does not
include personal property purchased at a public sale.
Public sale
means a sale open to the public and held in a location open and accessible to
the public, with sufficient public notice of the time and place of the sale to give the public a
reasonable opportunity to participate.
Recyclable materials
means
recyclable solid waste
as defmed in Section 48-46.
(j)
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Sec. 44A-2. License required.
A person must not conduct the business of a dealer unless the person possesses a dealer's
license issued by the Office of Consumer Protection, which must be displayed to the public
wherever the person conducts the business of a dealer.
An
individual must not act as officer,
employee or agent, and in that capacity engage in transactions involving secondhand personal
property, for a person required to be licensed by this Chapter unless the person possesses a valid
and current dealer's license.
Sec. 44A-3. Required books and records; reporting requirements.
(a)
A
dealer must keep all records and receipts required by this section at the business
location for a minimum of
1
year from the date of the latest recorded transaction.
(b)
A
dealer must keep an electronic record, in English, of each purchase or receipt
by or on behalf of the dealer at the time of the transaction. Each transaction must be recorded in
an electronic format specified by regulation under method
(3),
which contains the following
information:
(1)
The name, date of birth, address, race, sex, physical description, and
signature of the person selling the item;
(2)
selling the item;
(3)
(4)
entry;
The driver's license number or similar proof of identification of the person
The date and time of the transaction;
The identification, including signature, of the person making the record
(5)
A full physical description of each item purchased or received by the
dealer, including but not limited to, shape, size, color, and a list of all numbers, marks,
monograms, trademarks, manufacturer's names, serial numbers, inscriptions and any other marks
of identification appearing on the item; and
(6)
(c)
and
(2)
a copy ofthe written record of each transaction required in subsection
(b)
within 7 days after the transaction.
The consideration paid for each item or set of items.
A dealer must give the Police:
(l)
electronic notice of each transaction within 24 hours after the transaction;
Sec. 44A-4. Retention of secondhand personal property.
(a)
A person must not sell, melt, change or alter (except for customary testing), take
apart, destroy, obliterate identification marks, or dispose of any secondhand personal property
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purchased or received by a dealer until 21 days after the record of the transaction is submitted to
the Police.
(b)
All secondhand personal property purchased or received by a dealer must be
stored at the dealer's business location until 21 days after the record of the transaction is
submitted to the Police, or for such additional time per any specific item as the Police require.
All stored items must be identified by a tag attached to the property numbered to correspond with
the number of the transaction record. Items purchased in bulk may be tagged in bulk. The storage
requirements in this subsection do not apply to a consignee who:
(1)
(2)
(3)
received.
(c)
Items may be stored at other locations in the County approved by the Police. The
dealer must produce these items at the business location within 1 hour after a request to do so by
the Police. A dealer who cannot comply with a request to produce an item made after regular
business hours must produce the item within 1 hour after the opening of business on the next
business day.
(d)
The requirements of subsections (a), (b), and (c) do not apply to secondhand
personal property which has been inspected and cleared for earlier disposition by the Police
under regulations adopted under method (3).
operates from a fixed place of business;
complies with the tagging requirements of this subsection; and
withholds payment for consignments for at least 30 days after each item is
Sec. 44A-S. Transactions involving minors prohibited.
A dealer must not buy or receive any secondhand personal property from a person under
18 years old.
Sec. 44A-6. Confidentiality of reports to Police.
The reports to the Police required by Section 44A-3 are confidential information for use
by law enforcement agencies for law enforcement purposes. The full physical description of
reported items may, however, be shown to private individuals to aid in identifying stolen
property.
Sec. 44A-7. Inspection by police; release of stolen property.
(a)
A dealer must permit the Police to:
(1)
examine the records required by this Chapter;
(2)
examine any personal property purchased, received, or stored at the
business location; and
(3)
require retention for an additional 30 days after the storage retention
period under Section 44A-4, of any property which the police know or believe to be missing or
stolen.
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(b)
A dealer must release to the Police an item of secondhand personal property, other
than a security or printed evidence of indebtedness, located at the dealer's place of business if:
(1)
the Police have reasonable cause to believe that the item was stolen;
the owner of the item or victim of the theft has positively identified the
(2)
item;
(3)
the owner of the item or the owner's agent or designee has provided an
affidavit of ownership;
(4)
the stolen property report describes the item by:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
a date;
initials it bears;
an insurance record;
a photograph;
a sales receipt;
a serial number;
specific damage;
the facts that show that the item is one of a kind; or
a uruque engravmg; or
.
.
(5)
the property is involved in an on-going criminal or administrative
proceeding where violations of this Chapter have occurred.
(c)
The Police must give the dealer a receipt for each item of secondhand personal
property released to the Police pursuant to subsection (b). The receipt must:
(1)
describe the item; and
(2)
notify the dealer of the right to request a statement of charges against the
individual who sold or gave the item to the dealer for theft under State law.
Sec. 44A-S. Application for license; license fee.
(a)
The Office of Consumer Protection must make available an application form for a
dealer's license that requires an applicant to certify that the information given is correct under
the penalties of perjury.
(b)
The Executive, by regulation adopted under method (3), must set a license fee in
an amount that does not exceed the estimated costs of administering and enforcing this Chapter.
(c)
The dealer must agree in the application to:
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(1)
authorize the Police to inspect the records, inventory, and premises of the
business during normal business hours;
(2)
pay for the purchase of any secondhand personal property by check; and
(3)
not cash any check, except a check issued by the dealer to pay for
secondhand personal property, or as permitted by regulation adopted under method (3).
(d)
Only individuals may apply for a dealer's license.
(1)
A license application on behalf of a corporation or limited partnership
must be applied for by and issued to the president of the corporation or one or more members of
the partnership who are authorized to act for
it.
(2)
A license application on behalf of a partnership must be applied for by and
issued to all of the partners who are authorized to act for the partnership.
(3)
Each individual who applies for a dealer's license under this section
assumes, as an individual, all responsibilities of the dealer and, as an individual, is subject to all
conditions, restrictions and requirements imposed on dealers.
Sec. 44A-9. Payments by check.
A dealer must pay for each item of secondhand personal property by check, except as
permitted by regulation under method (3).
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.:s-\-\
c...c..
SlSf
1-..1....
~~
DEPARTMENT OF POLlCE
Isiah Leggett
County Executive
t'\~
J.
Thomas Manger
ChiefofPolice
~t\
MEMORANDUM
August
13,2014
TO;
The Honorable Craig Rice, President
Montgomery County Council
J. Thomas Manger ........
~oN.L
Chief of Police
Vl
FROM:
r
..
-
\J1
SUBJECT:
Secon
d Persona) Pro e
o
The purpose of this communication is to express my support-and that of Consumer
Protection Director Eric Friedman-for bill
38-14,
"Secondhand Personal Property Definitions­
Payment."
Bill
38-14
was written in an effort to accommodate the request of the business
community, specifically secondhand-property owners and big-box stores, while still meeting the
enforcement and reporting needs to safely defend the community. The current law's original intent was
to help police stop criminals who were selling stolen merchandise to pawn shops in exchange for cash.
In
order to make it harder for the criminal element, Chapter 44A was written so that payments made to the
seller had to be in the form of a check, which wou Id allow the police an opportunity to identify the person
responsible for selling stolen items.
Changing the definition of secondhand personal property would alleviate the burden on
dealers from having to report every single item that they take in. Dealers would have fewer items to enter
into the pawn-tracking software and the police department would be able to expedite the amount of time it
takes to review all transactions and compare them to stolen items.
Nationally, large and small retail stores have policies that allow their customers to bring
in older electronic items and have them applied towards a new item. These stores also have the ability for
customers to return items for store credit or a gift card. According to the retail industry, they have the
ability
to
track the identity of the person
to
whom a gift card or store credit is issued, thus providing the
police department with an acceptable paper trail to
be
able to launch a criminal investigation should the
need arise.
The laws governing secondhand personal property are over
30
years old. BiIl38-14
would have little to no implication on how the police department is able to track these transactions.
Therefore,
I
urge you and the Montgomery County Council to pass this legislation.
JTM:mam
c: Eric Friedman,
Director/Consumer
Protection
Office of the Chief of Police
Public Safety Headquarters • 100
Edison
Park Drive· Gaithersburg, Maryland
20878
www.montgomerycountymd.gov • www.mymcpnews.com • MCPDChief@montgomerycountymd.gov
montgomerycountymd.gov/311
301-251-4850 TTY
@
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BESTBUYr..
August 25, 2014
The Honorable Craig Rice
President, Montgomery County Council
Council Office Building
100 Maryland Avenue. 5th Floor
Rockville, MD 20850
Dear Councilmembers,
o.
On behalf of our customers and our employees who work at one of the seven Best
Buy stores in Montgomery County, we would like to take this opportunity to express
our support for bill 38-14, which updates Montgomery County's secondhand
personal property law, Passage of bill 38-14 would allow Best Buy to begin offering
product trade-in services to our customers in Montgomery County.
In most markets across the county, the Best Buy Trade-In Program allows customers
to trade in and recycle their old consumer electronics (mobile phones, iPads, etc.) in
exchange for Best Buy gift cards, all while keeping these products out of public
landfills. We run a very robust program committed to preventing fraud and not
facilitating the sale of stolen property.
Due to the unique nature of Montgomery County's secondhand personal property
law which requires payment by check, we have been unable to offer the Best Buy
Trade-in program to our customers. Bill 38-14 would update the law and allow
retailers to offer store credit for secondhand personal property purchases.
We appreciate the work of the Montgomery County Executive and the Office of
Consumer Protection on this proposed law change and strongly encourage your
support for bill 38-14.
Thank you for your consideration.
82aA?1
u~
(
{1J
Laura Bishop
Vice President, Pu blic Affairs
Best Buy Corporate Campus • 7601 Penn Avenue South Richfield, MN, USA 55423-3645 • (612) 291-1000 • NYSE symbol: BBY
Sincerely,
(if)
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CTJA
The Wireless
Association~
Expanding the Wireless Frontier
September 15,2014
The Honorable Craig Rice
Montgomery Council President
Council Office Building
100 Maryland Avenue, 5th Floor
Rockville, MD 20850
Re: Bill No. 38-14
Dear Council President Rice:
On behalf of CTIA-The Wireless Association®, the trade association for the wireless communications industry, I write in
support of Montgomery County Bill No. 38-14, which would amend County Code Section 44A-9 to permit covered
businesses the option of providing store credit when purchasing second-hand property.
Wireless service providers and their authorized agents have programs for purchasing, exchanging, or otherwise acquiring
electronic devices belonging to their customers and potential customers, and such transactions ate governed by the federal
Stored Communications Act. These trade-in activities have proven to be populat with consumers, including consumers in
Montgomery County, and provide consumers with a safe and reliable way to exchange and recycle their devices. In
looking at Bill No. 38-14, it came to our attention that County Code Chapter 44A does not contain an explicit exemption
for those businesses, which is necessary to avoid having the ordinance preempted by federal law. For this reason, we
respectfully request that Bill No. 38-14 be amended to adopt the following change to the definition of "dealer" in Code
Section 44A-l:
Dealer
{iLmeans a person conducting the business of buying, receiving. or matketing secondhand
personal property in the County, including:
(1) an auctioneer; and
(2) a person who buys, receives, matkets, or assists in the sale of secondhand personal property
through the Internet or another electronic method.
(b)
does not mean a wireless service provider. its agents, or retailers whose primary business
involves:
(1)
transacting in the sale and activation of electronic devices on the wireless network; or
(2) conducting transactions involving the trade-in or other acquisition of an electronic device
when the value given is a credit that may only be redeemed with the wireless provider or its agent or
retailer.
This amendment would clarifY the existing ordinance, preventing any confusion as to the legitimacy of wireless carriers'
trade-in activity. Given the protections afforded under federal law, the amendment would simply make the current status of
these programs explicit under the ordinance, and should not have any impact on the true intent, purpose, or impacts
embodied by the ordinance.
Thank you for the opportunity to comment. Please contact me ifyou have questions or need more information at
gkeegan@ctia.orgor 202.736.3238.
Sincerely,
prf-
Geratd Keegan
Senior Director
State Legislative Affairs
cc:
Josh Hamlin, Esq.
Legislative Attorney for the County
1400 16th Street,
NI/II
Suite 600
Washington, DC 20036
Main 202.785.0081
Fax 202.785.0721
www.ctia.org
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UPTOWN
CHEAPSKATE
Council's Office of Legislative Information Services
Montgomery County Public Safety Committee
5
th
Floor
Council Office Building
100 Maryland Avenue
Rockville, MD 20850
Phil Andrews, Chair
Roger Berliner
Marc Eirich
September 22,2014
Dear Mr. Andrews, Mr. Berliner, Mr. Eirich,
This letter is to serve in lieu of verbal testimony at the work session regarding Bill 38-14,
Secondhand Personal Property - Definitions - Payment, scheduled for Oct 2,2014. Due to a
schedule conflict I am unable to attend the session.
A little background - a year ago I began communication with the Office of the Montgomery
County Executive and the Department of Police regarding the COMCOR 44A and the difficulty
the enforcement was causing in the resale community. Enclosed you will find the
communication that outline the main issues.
At this point the solution that is currently in the works seems to be mutually acceptable. The one
area that needs to be further clarified is the definition of "resale value below a dollar threshold"
that is listed in the amendment. The intent should be that this value is the amount that the
reseller is paying the person selling the personal property, in retail terms the "cost" of the item
and not the "retail price" that the item will then be resold at. Using the term "resale value" seems
a bit vague and subject to interpretation. Perhaps the wording could be amended to ... items of
personal property where the value that is being paid to the seller is below a dollar threshold ... or
something that more clearly spells out the intent.
Uptown Cheapskate :: 11102 Cattail Court, Berlin, MD 21811 :: 410.726.5754
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I understand that the value is not being set today, but I would like to take this opportunity to
encourage the committee to consider recommending that amount to be set at $100.00.
Please do not hesitate to reach out to me for any further clarification. I can be reached via
phone at 410.726.5754 or email upturn@uptowncheapkskate.com.
Respectfully Yours,
Nancy Kline
Owner, Uptown Cheapskate
Salisbury, Timonium, Rockville, MD
Uptown Cheapskate :: 11102 Cattail Court, Berlin, MD 21811 :: 410.726.5754
@
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October 4,2013
To: Montgomery County Executive and Department of Police
RE: County Regulation pertaining to Secondhand Personal Property, COM COR 44A
The purpose of this letter is to serve as communication from resale business owners whose
businesses have recently been impacted by the enforcement of COMCOR 44A Our intention
with this communication is to work with the County Executive and the Police Department to find
a mutually agreeable solution to the numerous issues 44A has raised since being enforced.
Below you will find a list of concerns, possible solutions and consideration points.
Concerns:
.:.
The personal property definitions are very vague and encompass a broad range of
merchandise. Example: Leather goods include anything with any leather on it. Jewelry
includes all inexpensive costume jewelry
o One apparel, shoe and accessories resale location could easily purchase hundreds
of pieces per day that fall into the categories of jewelry, watches, leather goods and
fur. Many of these items are purchased for under $5 - $10 .
•:.
The process of gathering the seller's personal information and entering that and each
individual item into the Rapid reporting system is burdensome. It adds time to the seller's
transaction and it costs the business owner more in payroll dollars. Many sellers feel it is
invasive.
o
Again, many of these items are being purchased for a very low dollar amount
o
It is costly to copy and mail these forms; the signature copy is on file in our stores if
needed.
o The Reporting system does not work on Mac Computers
.:.
The requirement of holding the product for 21 days before offering it for sale is very costly to
the business owner. It ties up cash flow, requires more man hours to back stock the item,
and requires back stock space which most stores do not have.
o
Again, this could easily be hundreds of items per day.
o
The resale business model is to turn merchandise quickly to generate cash flow to
purchase more merchandise.
o Stores do not have the space to hold this merchandise
.:.
The requirement of paying by check for any item over $10 is a roadblock to the business
model for several reasons.
o Many resale shops offer a cash payout or a higher amount in store credit or trade.
This requirement does not allow either of these options for the seller.
o
This delays the payment for the honest seller or it takes money from them if they
wanted to take the store credit option and use it to purchase items, many sellers sell
over time and then use their credit for a larger purchase.
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o It is burdensome to the business owner to issue the checks and deal with the
bookkeeping aspects. This is very costly and time consuming (Ink, paper, checks,
postage and banks may charge for each check)
.:. Transactions involving minors are prohibited
o
Since many teens embrace the resale concept it is detrimental to our business model
to not allow young adults under 18 sell to a resale store
o
It is their own property they are selling, they should not be discriminated against
Possible solutions:
.:. Any leather goods, furs (or fur trimmed items), watches, costume jewelry (excludes
precious metals) where the compensation is under $150 per item is excluded from the
regulation. (not reportable, does not need to be held for 21 days or paid for by check)
.:. Any leather goods, furs (or fur trimmed items), watches, costume jewelry (excludes
precious metals) where the compensation is over $150 is required to be reported
electronically within 24 hours, hard copy mailed within 7 days, paid by check and held for
7 days before being sold. Perhaps the hard copy does not need to be mailed; the stores
would keep it on file.
o
Perhaps digital photos of the items would allow the hold time frame to shorten .
•:. Eliminate the prohibition of not allowing minors to sell to resale stores.
Points to Consider:
.:. The intent of recording the secondhand item is to have a record of the transaction in
case the item is stolen. Can a pair of secondhand 9 West brown pumps in size 7.5 be
positively identified as the stolen ones?
.:. This regulation not only impacts business owners but also Montgomery County
Residents looking for a way to pass on their gently used clothing and accessories .
•:. This regulation generates additional financial burden during a period where business
entities as well as municipalities are struggling to survive in light of the economy and
budget constraints .
•:. The business model for resale where the business pays upfront for the product is not
conducive to holding product. It is very detrimental to have large sums of money tied up
in product and not being able to offer it for sale. Also, most store owners do not have
adequate storage space.
•:. There is an assumption that we are dealing with criminals who steal personal property
and sell it, in reality this is the exception and not the rule. If we encounter one criminal in
3 years, how many legitimate sellers have we inconvenienced along the way?
.:. Clarify how this should work for consigned items - the payment is not made until the item
is sold - so are you required to report it when it is first consigned and then hold it for 21
days before offering it for sale? OR sell it but the customer does not take possession for
21 days? Or does this regulation not include consigned items
*:.
Perhaps other items listed in the regulation should also have a monetary threshold ­
such as glassware, carpet, rugs, objects d'art?
.:. While reaching out to resale shops in Montgomery County it was discovered that many
of the shops had not been contacted and are unaware of the regulation. It is unfortunate
that this is not being applied fairly across the board.
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We sincerely hope that these concerns, solutions and points are taken into consideration. To
say that the enforcement of this regulation has had a detrimental impact on the Montgomery
County resale business owners and residents is an understatement. It is unfortunate that the
County chooses to put up roadblocks to small business owners. It is doubtful that all businesses
can come fully into compliance and remain in business. We appreciate your time and
consideration in working with us to find a workable solution.
Sincerely,
Nancy Kline, Uptown Cheapskate
Gayle Herrmann, Mustard Seed
Wendy Ezrailson, Redzz Trading
Scott Murdoch, Boomerangs