SENATE BILL NO. 755

January 23, 2020, Introduced by Senator LUCIDO and referred to the Committee on Regulatory Reform.

"An act to regulate and license second hand dealers and junk dealers; and to prescribe penalties for the violation of the provisions of this act,"

by amending the title and sections 5 and 6 (MCL 445.405 and 445.406), section 5 as amended by 2018 PA 329, and by adding section 6a.

the people of the state of michigan enact:

TITLE

An act to regulate and license second hand secondhand dealers and junk dealers; to provide for the disposition of allegedly misappropriated articles in the possession of secondhand dealers and junk dealers; to provide for the powers and duties of certain state and local governmental officers and entities; and to provide remedies and prescribe penalties for the violation of the provisions of this act.

Sec. 5. (1) Except as provided in subsection (2), and subject to sections 6 and 6a, a second hand secondhand dealer or junk dealer shall retain each article it purchases or receives in exchange for at least 15 days before disposing of it, in an accessible place in the building where the article is purchased and received. The dealer shall attach a tag to the article in a visible and convenient place, and write on the tag the number that corresponds with the entry number in the book or other record.

(2) A second hand secondhand dealer that operates an automated recycling kiosk may store articles acquired at the kiosk in a secure off-site location. A dealer must shall retain an article stored under this subsection for 30 days, and upon request return that article to a law enforcement officer of this state without cost.

(3) A second hand secondhand dealer or junk dealer shall prepare and deliver on Monday of each week to the local law enforcement agency of the local unit of government in which the dealer's dealer conducts business, is carried on, before 12 noon, a legible and correct paper or electronic copy, in the English language, from the book or other written or electronic record, that contains a description of each article purchased or received in exchange during the preceding week, the hour and day when the purchase or exchange was made, a description of the individual from whom it was purchased or received in exchange, and a copy of the documentation required under section 4 concerning the individual from whom it was purchased or received in exchange. The statement shall must be verified in a manner acceptable to the chief of police or chief law enforcement officer of the local law enforcement agency.

(4) This section does not apply to old rags, waste paper, and household goods except radios, televisions, record players, and electrical appliances and does not require a second hand secondhand dealer or junk dealer to retain articles purchased from a person that has a fixed place of business after those articles are reported under subsection (3).

Sec. 6. If the purchaser or receiver, by exchange or otherwise, as described in section 3, is a peddler or goes about with a wagon to purchase or obtain by exchange or otherwise, any of such articles, and Subject to section 6a, if a secondhand dealer or junk dealer does not have a place of business in a building, he need not retain such the secondhand dealer or junk dealer is not required to retain articles for 15 days before selling them, provided on disposing of them if the secondhand dealer or junk dealer does all of the following:

(a) Maintains a separate book or other written or electronic record of each article it sells or otherwise transfers to a person that includes the name and address of each person that received the article and a description of the article.

(b) On Monday of each week, he files with the chief of police or chief police officer of the city or village in which he it is located a report showing the place of business that states the name and address of the each person to whom such sale was made; that received articles from the secondhand dealer or junk dealer in the preceding week and a copy of the record required by such section to be kept in a separate book of the articles purchased or received during under subdivision (a) for the preceding week. , including a description of such articles sold, to whom sold and his place of business.

Sec. 6a. (1) If a law enforcement official has probable cause to believe that an article received by and in the possession of a secondhand dealer or junk dealer is misappropriated, or if a person files an official police report alleging misappropriation of the article, the official may place a written hold order on the article. All of the following apply to a written hold order under this subsection:

(a) The hold order shall specify a holding period. The length of the holding period shall not exceed 90 days, unless extended by court order.

(b) The law enforcement official who placed the hold order may rescind the order in writing.

(d) The hold order must include all of the following information:

(i) The name and mailing address of the secondhand dealer or junk dealer.

(ii) The name, title, and identification number of the law enforcement official who placed the hold order and, if applicable, the number assigned to the claim or report relating to the article.

(iii) A complete description of the article in the possession of the secondhand dealer or junk dealer, including model number and serial number, if applicable.

(iv) The name of the person that reported that the article was misappropriated, if applicable, unless otherwise prohibited by law.

(v) The expiration date of the holding period specified under subdivision (a).

(2) A law enforcement official who places a written hold order on an article under subsection (1) must sign and date a copy of the order as evidence that he or she placed the hold order and of the date the hold period specified under subsection (1)(a) begins.

(3) On the tenth day after a hold order placed under subsection (1) expires, if the secondhand dealer or junk dealer has not received notice from a court that it has granted an extension of the hold order on the article, title to the article vests in and is considered conveyed by operation of law to the secondhand dealer or junk dealer, free of any liability for claims and subject to the provisions of this act.

(4) A court shall not grant an extension of a hold order placed on an article under subsection (1) unless a person that claims an interest in the article that is adverse to the secondhand dealer or junk dealer has filed a report with a law enforcement agency and provided a copy of the report to the court, and a copy of that report accompanies the notice from the court that it granted the extension described in subsection (3).

(5) Except as provided in subsection (6), a secondhand dealer or junk dealer shall not release or dispose of an article that is subject to a hold order under this section unless the release or disposal is pursuant to a court order, a written release from the law enforcement official who placed the hold order, or the expiration of the holding period of the hold order specified under subsection (1)(a).

(6) While a hold order is in effect, the secondhand dealer or junk dealer shall release upon request the article that is subject to the hold order to the custody of the law enforcement official who placed the hold order for use in a criminal investigation or proceeding related to an ownership claim. The release of the article to the custody of the law enforcement official is not considered a waiver or release of the secondhand dealer's or junk dealer's property rights in, interest in, or lien on the article.

(7) A law enforcement official or any other person that obtains custody of an article under this section shall not deliver the article to any person that claims ownership of the article unless both of the following are met:

(a) The article is delivered after a hearing at which a court determines the merits of the claims to the article.

(b) If the court described in subdivision (a) finds against the secondhand dealer or junk dealer, the court orders the person that sold the article to, or exchanged the article with, the secondhand dealer or junk dealer to make restitution to the secondhand dealer or junk dealer for all money that the secondhand dealer or junk dealer paid, or the value of the property exchanged by the secondhand dealer or junk dealer for the article, together with reasonable attorney fees and costs that the secondhand dealer or junk dealer incurred in defending the action related to the disputed article.

(8) If the court after a hearing described in subsection (7)(a) finds in favor of the secondhand dealer or junk dealer, the article must be returned to the secondhand dealer or junk dealer.

(9) A secondhand dealer or junk dealer is not liable to any person for any article that is seized from the secondhand dealer or junk dealer based on the secondhand dealer's or junk dealer's inability to return the article to that person because of the seizure.

(10) As used in this section, "law enforcement official" means a sheriff or sheriff's deputy of a sheriff's department in this state, a village or township marshal of a village or township in this state, an officer of the police department of any city, village, or township in this state, or an officer of the Michigan state police.

Enacting section 1. This amendatory act takes effect 90 days after the date it is enacted into law.