PA 13-255—sSB 928

Public Safety and Security Committee

General Law Committee

Government Administration and Elections Committee

AN ACT CONCERNING PRECIOUS METALS OR STONES DEALERS

SUMMARY: This act expands licensed precious metals or stones dealers' (dealers) recordkeeping requirements by requiring such dealers to record and maintain additional information when acquiring property. It also:

1. requires dealers to hold property, other than bullion and coins, for at least five days after a transaction;

2. allows police officers examining records on-site to require employees to provide identification;

3. requires evidence of certain business permits before license issuance; and

4. requires dealers to maintain a place of business with a street address in Connecticut.

Prior law required only that they maintain a place of business in the state. The act generally conforms dealer requirements with pawnbroker and secondhand dealer requirements.

Those violating the new requirements are subject to fines of up to $1,000 and existing licensing penalties (i. e. , license revocation).

The act also makes technical and conforming changes.

By law, precious metals or stones dealers are (1) people primarily engaged in the business of purchasing gold or gold-plated ware, silver or silver-plated ware, platinum ware, watches, jewelry, precious stones, bullion, or coins. They must be licensed by the police chief in the town where they conduct business or, for any city or town that does not have an organized local police department, the emergency services and public protection commissioner. The license requirement does not apply to purchases from a wholesaler.

EFFECTIVE DATE: October 1, 2013

RECORDKEEPING

The act expands a dealer's recordkeeping requirements, when purchasing property. Some of the new requirements apply only to the purchase of precious metals and stones. Under existing law, dealers must record, at the time of each purchase, (1) a description of the purchased property, (2) the seller's name and address, (3) the proof of the sellers identity, and (4) the date and time the property was purchased.

The act expands what constitutes proof of identity. It eliminates a requirement that the record include the price paid and instead requires the dealer to maintain an electronic copy of the check or money order purchase for the property (see below). The act also requires dealers to keep the record in English, number the entries consecutively, and include the seller's general description. It specifies that the address dealers record must be the seller's home address and requires them to keep the records for at least two years.

Precious Metals and Stones

For gold or gold-plated ware, silver or silver-plated ware, platinum ware, watch, jewelry, and precious stone sales, the act requires the records to also contain a digital photograph of any item without identifiable numbers or markings. The number assigned to the property's entry in the recordkeeping system must be visible in the photograph and remain attached to the property until its disposition or sale.

Under the act, the record's property description must include:

1. all distinguishing marks, engravings, and etchings;

2. names of any kind, including brand and model;

3. model and serial numbers;

4. affiliation with any institution or organization;

5. dates;

6. initials;

7. color;

8. vintage; and

9. image represented.

Recordkeeping Exemptions

The act allows the licensing authority to (1) exempt dealers from any recordkeeping requirement or (2) establish additional or different description requirements depending on the nature of the property, transaction, or business, including articles sold in bulk lots or of minimal value.

Payment Records

By law, dealers may pay for acquired property only by check or money order. The act requires dealers who pay by check to retain its electronic copy or other record issued by the financial institution that processes it. The copy is subject to inspection as part of the dealer's recordkeeping system. Dealers must indicate the number or numbers associated with the property in the recordkeeping system on the checks or money orders.

Customer Receipts. By law, at the time of purchase, a dealer must provide the seller with a receipt containing the required recordkeeping information, amount paid for any property sold, and the dealer's name and address. The act requires the receipt to include the new information dealers must enter into their own records.

SALE OF PROPERTY

The act prohibits (1) dealers from selling or disposing of property, other than bullion or coins, acquired in any transaction within five days after such transaction and (2) licensing authorities from requiring dealers to hold such property for a longer period. It also allows a licensing authority to grant exemptions for good cause.

WEEKLY REPORT

Under prior law, at the licensing authority's request, dealers were required to submit weekly sworn statements with the sellers' names and addresses and a description of the property purchased. Under the act, the dealer may submit these reports more often and must also include a description of each seller and the nature and terms of each transaction. The act also specifies that reports must include each seller's home address.

The act requires the statement to be submitted in an electronic format prescribed by the licensing authority, unless the authority grants an exemption for good cause. As under prior law, the sworn statements are not public records for Freedom of Information Act purposes.

SELLER IDENTIFICATION

Under prior law, a dealer was required to demand “positive identification” from anyone selling property to him or her. The act instead requires the identification to include (1) a photograph; (2) an address, if available on the identification; and (3) an identifying number, including date of birth. It specifies that dealers are exempt from complying with this requirement if the seller is a wholesaler.

EVIDENCE OF BUSINESS PERMITS

The act requires the licensing authority to refuse to issue a license if the applicant does not provide evidence that he or she (1) holds a sales and use tax permit, (2) has a Connecticut tax registration number, and (3) is registered with the secretary of the state to do business in Connecticut.

OLR Tracking: DC: TA: JKL: RO