STAND. COM. REP. NO. 706

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1533
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committees on Consumer Protection and Commerce and
Judiciary and Hawaiian Affairs, to which was referred H.B. No.
1533 entitled: 

     "A BILL FOR AN ACT RELATING TO PAWNBROKERS,"

beg leave to report as follows:

     The purpose of this bill is to exclude certain criminal
offenders from being licensed as pawnbrokers, and to add to the
penalties against pawnbrokers for failure to comply with their
licensing laws.  The bill also expands the penalty provisions to
apply to dealers, agents, employees, or representatives of a
licensed pawnbroker.  Violations of the section also constitute
criminal misdemeanors.

     Testimony in support of this bill was received from the
Department of Commerce and Consumer Affairs (DCCA), the Hawaii
Pawnbrokers Association (H.P.A.), and the Honolulu Police
Department (HPD).  A Maui pawnbroker made several recommendations
for amendments.
     
     Supporting testimony indicated a high degree of consensus
between H.P.A. and HPD on the need to have mechanisms to exclude
and deter criminal elements from entering the pawnbrokering
business, a business that by its nature offers many opportunities
for crimes of deceit and theft.  This bill is an attempt to begin
addressing those concerns, and the testifiers expressed a
willingness to keep working on issues raised at the hearing. 


 
 
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                                 Page 2

 
     Questions of fairness were raised over what barriers to
licensing were proper for effecting the goal of excluding people
with criminal tendencies.  The Maui pawnbroker suggested that
limiting the exclusion of felons to those convicted within ten
years prior to applying for the license would provide adequate
screening.  Other testimony indicated that drug misdemeanors
would not be particularly relevant for the pawnbrokering
business. 

      As to the penalty provisions, both HPD and H.P.A. favored
imposing the fine and forfeiture provisions directly against
agents, employees, and representatives of pawnbrokers, but also
indicated that licensed pawnbrokers ultimately should be held
responsible for the acts of their employees, agents, and other
representatives.  It was fair in their eyes that pawnbrokers
should forfeit their  licenses upon two or more violations, even
if those violations were not personally committed, since the
licensed pawnbroker must be encouraged to take measures to train
and to supervise employees, agents and representatives.  HPD
testified that upon its further review, it would recommend
removing criminal sanctions since these violations are adequately
addressed through civil penalties, would be difficult to
prosecute, and have little meaningful impact on abuses in the
pawnbrokering business.

     In light of the concerns of both law enforcement and
pawnbrokers, your Committee has amended the bill as follows:

     (1)  Defined "suitable persons" as anyone who has not been
convicted of a felon for the ten-year period prior to the date of
application for a license.
     (2)  Clarified that the prohibition on engaging in the
pawnbrokering business also applies to those merely employed in
that business.  

     (3)  For consistency with the license forfeiture provisions
after two violatons, made the business prohibition also  apply
only after two or more violations of the section; and  
     (4)  Removed all criminal penalties in the section.
     (5)  Made technical, nonsubstantive amendments for purposes
of clarity, consistency and style.

     As affirmed by the records of votes of the members of your
Committees on Consumer Protection and Commerce and Judiciary and
Hawaiian Affairs that are attached to this report, your
Committees are in accord with the intent and purpose of H.B. No.
1533, as amended herein, and recommend that it pass Second
Reading in the form attached hereto as H.B. No. 1533, H.D. 1, and
be referred to the Committee on Finance.

 
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                                 Page 3

 
                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Consumer
                                   Protection and Commerce and
                                   Judiciary and Hawaiian
                                   Affairs,

                                   
                                   
                                   
                                   
______________________________     ______________________________
PAUL T. OSHIRO, Chair              RON MENOR, Chair