Location:
LICENSING; MINING;

OLR Research Report


November 4, 2009

 

2009-R-0395

LICENSING JEWELERS AND COIN DEALERS

By: Meghan Reilly, Legislative Analyst II

You asked if any states license jewelers and coin dealers and, if so, for a sample of their licensing fees and regulations. For a summary of regulation of pawnbrokers, see OLR Report 2009-R-0181. For a summary of retention periods for precious metal dealers, see OLR Report 2008-R-0545.

SUMMARY

We were unable to identify any states that license jewelry stores devoted to 'first-hand' sale of jewelry. Fifty jurisdictions, including Connecticut, Puerto Rico, the Virgin Islands, and Washington, D.C. regulate secondhand jewelers and coin dealers, in some way, such as licensing, anti-fraud, counterfeiting, or regulation of certain activities. Many of the states require secondhand jewelry and coin dealers to obtain a permit through the municipality in which the dealer does business. The municipalities are authorized to set permit fees, but the state maintains requirements regarding recordkeeping, state and local police accessibility, and holding periods.

In Connecticut, anyone who is in the business of buying gold; silver; items plated with gold, silver, or platinum; watches; jewelry; precious stones; or coins must be licensed by the chief of police, or if there is none, the first selectman of the municipality in which they do business.  Fees are set by the licensing municipality.

CONNECTICUT LAW

Under CGS 21-100, a “precious metal and stone dealer” is anyone who is in the business of buying gold; silver; items plated with gold, silver, or platinum; watches; jewelry; precious stones; or coins. Manufacturers are exempt. The law requires that these dealers be licensed by the chief of police, or if there is none, the first selectman of the municipality in which they do business.  Licenses may be revoked for cause and licensing authorities may not issue them to anyone convicted of a felony.  The licensing authority may require an applicant to submit to state and national criminal history records checks. Unlike pawnbrokers, precious metal and stone dealers are not required to retain purchased goods for a specified period.

Precious metal and stone dealers must safeguard against receiving and disposing of stolen goods, a form of larceny.  Specifically, they must demand positive identification from sellers.  They must also keep records of each transaction, including a description of the goods, the price paid, the seller's name and address, the type of identification presented, and the day and time the goods were received.  The information must be written down at the time the transaction takes place.  Any state or municipal police officer may have access to the required records and inspect the business establishment and the goods purchased or received.

Precious metal and stone dealers cannot purchase goods from a minor who is not accompanied by a parent or guardian.  They must pay for goods by check, draft, or money order.  Cash may not be transferred to either party in the course of a transaction.  They must give sellers receipts containing the same information they are required to keep, the amount paid for the goods, and the business's name and address.

The licensing authority may require dealers to make a weekly sworn statement describing the goods received during the week.  These statements are not subject to disclosure under the Freedom of Information Act.

REGULATION IN OTHER STATES

We were able to find laws, regulations, or both regarding secondhand dealers of jewelry, precious metals, coins, or some combination of the three in all but three states. We could not identify laws in Kentucky, Montana, and Wyoming regulating secondhand dealers.

Many states require secondhand jewelry and coin dealers to obtain a permit through the municipality in which the dealer does business. In some states, like Connecticut, the municipalities are authorized to set permit fees. In others, like Kansas, the state may set fees. Kansas requires licensees to pay an annual renewal fee of $25 to the clerk in the jurisdiction in which they are licensed. License applications must be in writing stating (1) the full name and place of residence of the applicant, (2) the address of the places where the business is to be conducted, (3) the hours and days of the week during which the applicant proposes to engage in business, and (4) other information as necessary to determine the applicant's qualifications for a license. Each applicant must also submit a statement that the applicant holds a valid registration certificate issued by the director of revenue and a detailed inventory and description of all goods, wares, merchandise, precious metals, or other property held in pledge or for sale at the time of application at each place of business, indicating whether the property was received in pledge, purchased as secondhand merchandise, or precious metal purchased for resale (K.S.A. 16-707).

Generally, states can set requirements regarding recordkeeping, state and local police accessibility, and holding periods. In Washington, property bought or received on consignment by a secondhand may not be removed from the permanent place of business within 30 days, unless returned to the owner. Property must be open to inspection to any commissioned law enforcement officer of the state during all ordinary business hours (Rev. Code Wash. (ARCW) 19.60.055).

Some states regulate markings, fraud, and other activities by dealers through anti-counterfeiting statutes. For example, California law prohibits individuals from, with the intent to defraud, (1) counterfeiting any of the species of gold or silver coin or any kind or species of gold dust, gold or silver bullion, or bars, lumps, pieces, or nuggets; (2) selling, passing, or paying with counterfeit product; or (3) procuring counterfeit product to be passed. The law punishes violators with two, three, or four years' imprisonment (Cal Pen Code 477). Hawaii law prohibits manufacturers, dealers, wholesalers, and retailers of gold or silver from manufacturing, selling, importing, or exporting gold or silver stamped with any mark or word indicating that gold or silver or alloy in the article is of a greater degree of fineness than the actual fineness of quality (Haw. Rev. Stat. 482D-1).

Table 1 shows the regulated activities by jurisdiction, including the statutory or regulatory citation.

Table 1: Regulation of Secondhand Jewelry and Metals

Jurisdiction

Citation

Subject Matter

AL

Statutes:

Code of Ala. 8-14-22

Sale of Gold, Silver, Watches, Jewelry, China, etc

Regulations:

 

Ala. Admin. Code r. 810-6-2-.27

Gold, Coin, And Bullion Sales

AK

Statutes:

Alaska Stat. 27.10.090

Precious-Metal Placers

AZ

Statutes:

A.R.S. 44-1215

Salting Gold or Silver Ore to Defraud

A.R.S. 44-1601

Dealers in Precious Items

AR

Statutes:

A.C.A. 17-23-101

Buyers of Precious Metals

CA

Statutes:

Cal Pen Code 343

Gold Buyers Required to Produce Register or Exhibit Articles Pledged

Cal Pen Code 477

Counterfeiting Coin, Bullion, Bars, Lumps, or Prices; Gold or Silver Coins

Cal Bus & Prof Code 21500

Secondhand Goods; Watches

Cal Bus & Prof Code 21626

Secondhand Dealer; Coin Dealer

Cal Bus & Prof Code 21628

Reports by Secondhand Dealers and Coin Dealers

Cal Bus & Prof Code 22100 through 22181

Precious Metal Marking

Cal Fin Code 7300

Purchase and sale of gold or silver bullion and related instruments or securities

Cal Corp Code 29515

Precious Metal

Regulations:

 

4 CCR 1316

Secondhand Merchandise

18 CCR 1599

Coins and Bullion

CO

Statutes:

C.R.S. 11-37.5-126 through 11-37.5-127

Precious Metals Accounts

C.R.S. 11-61-101

Gold and Silver Coin

CT

Statutes:

Conn. Gen. Stat. 21-100 through 21-101

Purchasers of Precious Metals and Stones

Conn. Gen. Stat. 53-324 through 53-428

Articles Purporting to be Made of Gold to be Marked; Articles Made of Gold or Alloy; False Representations; Sterling Silver Defined; Penalty; Coin Silver Defined.

DE

Statutes:

6 Del. C. 3701 through 6 Del. C. 3706

Sale of Secondhand Watches

Table 1: -Continued-

Jurisdiction

Citation

Subject Matter

DC

Statutes:

D.C. Code 47-2837

Secondhand Dealers

Regulations:

 

CDCR 16-1002

Dealers Receiving Jewelry or Precious Metals

FL

Statutes:

Fla. Stat. 538.03 through 538.17

Secondhand Dealers

Fla. Stat. 831.15 through 831.19

Counterfeiting coins

Regulations:

 

12A-1.0371, F.A.C.

Sales of Coins, Currency, or Bullion

GA

Statutes:

O.C.G.A. 43-37-1 through 43-37-7

Dealers in Precious Metals and Gems

O.C.G.A. 43-49-1 through 43-49-5

Dealers In Used Watches

Regulations:

 

Ga. Comp. R. & Regs. r. 560-12-2-.108

Bullion, Coins, or Currency

HI

Statutes:

HRS 482D-1 through 482D-11

Gold and Silver Stamping

ID

Statutes:

Idaho Code 18-3607 through 18-3610

Counterfeiting Coin or Bullion; Possession of Counterfeit Coin and Apparatus

Regulations:

 

IDAPA 04.02.02.052

Precious Stones and Mineral Promotions

IDAPA 35.01.02.039

Sales and Purchases of Bullion, Coins, or Other Currency

IL

Statutes:

720 ILCS 5/17-4

Deceptive Altering or Sale of Coins

720 ILCS 290/1 through 720 ILCS 290/3

Deceptive Sale of Gold and Silver

815 ILCS 395/0.01 through 815 ILCS 395/11

Platinum Sales

815 ILCS 410/0.01 through 815 ILCS 410/5

Second-hand Watch

Regulations:

 

35 Ill. Adm. Code 307.3123 through 35 Ill. Adm. Code 307.3124

Primary Precious Metals and Mercury; Secondary Precious Metals

35 Ill. Adm. Code 307.3112

Secondary Silver

86 Ill. Adm. Code 130.1910

Antiques, Curios, Art Work, Collectors' Coins

Table 1: -Continued-

Jurisdiction

Citation

Subject Matter

IN

Statutes:

Burns Ind. Code Ann. 23-2-6-15

Precious Metal Defined

Burns Ind. Code Ann. 24-4-3-1 through 24-4-3-5

Second-Hand Watches

Burns Ind. Code Ann. 25-37.5-1-1 through 25-37.5-1-7

Valuable Metal Dealer Regulation

Burns Ind. Code Ann. 28-6.1-6-2

Buying and Selling Exchange, Coin, and Bullion

IA

Statutes:

Iowa Code 556E.1 through 556E.10

Gold and Silver Alloy

Regulations:

 

701 IAC 15.18(422,423)

Coins and Other Currency Exchanged at Greater Than Face Value

701 IAC 16.2(422)

Used or Secondhand Tangible Personal Property

701 IAC 213.5(423)

Antiques, Curios, Old Coins, Collector's Postage Stamps, and Currency Exchanged

701 IAC 18.19(422,423)

Antiques, Curios, Old Coins

KS

Statutes:

K.S.A. 16-706 through 16-722

Regulation of Pawnbrokers and Precious Metal Dealers

Regulations:

 

K.A.R. 92-19-56

Coins, Bullion, Stamps, Antiques, Collectables, Commemoratives

LA

Statutes:

La. R.S. 9:4701 through 9:4703

Jewelry, Gems, and Watches

La. R.S. 37:1864.2

Purchase of Precious Metals and Stones from Minors

Regulations:

 

LAC 13:I.547

Secondhand Items

LAC 16:III.511

Misrepresentation of Old, Used, or Secondhand Goods

ME

Statutes:

14 M.R.S. 4801

Mode of Sale for Coins

MD

Statutes:

Md. BUSINESS REGULATION Code Ann. 12-101 through 12-601

Secondhand Precious Metal Object Dealers

Md. COMMERCIAL LAW Code Ann. 14-601 through 14-608

Gold and Silver

Md. TAX-GENERAL Code Ann. 11-214.1

Precious Metal Bullion and Coins

Regulations:

 

COMAR 09.25.01.01 through 09.25.02.02

Secondhand, Precious Metals, and Gem Dealers and Pawnbrokers

Table 1: -Continued-

Jurisdiction

Citation

Subject Matter

MA

Statutes:

ALM GL ch. 266, 77 through 266, 78

Sale of Sterling, Coin Silver, and Gold

ALM GL ch. 266, 142A

Records of Purchase or Sale of Gold, Silver, and Platinum

ALM GL ch. 267, 17 through 267, 18

Counterfeiting Coin

MI

Statutes:

MCLS 205.54s

Sale of Investment Coins and Bullion

MCLS 205.94u

Investment Coins and Bullion: Storage, Use, Tax

MCLS 445.481 through 445.492

Precious Metal and Gem Dealers

MCLS 750.260 through 750.261

Coins; Counterfeiting

MCLS 750.287 through 750.288

Fraud in Sale of Sterling or Coin Silver Marked Articles

MCLS 750.537 through 750.538

Copper or Silver Ore; Barter, Transfer, or Sale; Violation as Misdemeanor; Penalty

Regulations:

 

MICH. ADMIN. CODE R 205.108

Philatelists; Antiques, Curios, and Old Coins

MN

Statutes:

Minn. Stat. 325F.73 through 325F.744

Precious Metals

Minn. Stat. 609.526

Precious Metal Dealers; Receiving Stolen Property

Regulations:

 

Minn. R. 2875.8170

Investment Gems

MS

Statutes:

Miss. Code Ann. 97-21-13 through 97-21-17

Counterfeiting Coins; Gold and Silver Coins of United States and Foreign Countries

Miss. Code Ann. 97-21-59

Uttering Counterfeit Instrument or Coin

MO

Statutes:

144.815 R.S.Mo.

Bullion and Investment Coins: Sales and Use Tax

408.010 R.S.Mo.

Silver a Legal Tender

NE

Statutes:

R.R.S. Neb. 8-1715

Precious Metal; Defined

R.R.S. Neb. 69-206

Pawned or Secondhand Goods; Restrictions on Disposition; Jewelry Defined

Table 1: -Continued-

Jurisdiction

Citation

Subject Matter

NV

Statutes:

Nev. Rev. Stat. Ann. 91.140

Precious Metal; Defined

Nev. Rev. Stat. Ann. 205.180 through 205.185

Counterfeiting, Possessing, or Receiving Gold Dust, Bars or Other Articles

Nev. Rev. Stat. Ann. 647.110

Dealers in Secondhand Materials; Record and Inspection

Regulations:

NAC 372.170

Coins and Stamps

NH

Statutes:

RSA 339:31 through 339:34

Products Marked as Sterling

NJ

Statutes:

N.J. Stat. 51:5-1 through 51:6A-8

Gold, Silver, Platinum, and Alloys

N.J. Stat. 45:22-35 through 45:22-40

Secondhand Watches

Regulations:

 

N.J.A.C. 13:47C-6.1 through 13:47C-6.3

Requirements for Security Bond for Transient Buyers of Precious Metals

NM

Statutes:

N.M. Stat. Ann. 3-18-24

Licensing and Regulating Secondhand and Junk Stores

Regulations:

 

3.19.4.9 NMAC

Value of Copper, Lead, Zinc, Gold, and Silver

NY

Statutes:

NY CLS Gen Bus 47

Secondhand Business

NY CLS Gen Bus 229-a through 229-j

Silver, Gold, and Diamonds

NY CLS Gen Bus 230 through 238

Platinum Stamping

NY CLS Gen Bus 239 through 239c

Regulation of Appraisers of Jewelry, Art, Watches, Objects Made From Precious Stones or Metals

NY CLS Gen Bus 418 through 429

Licensing of Coin Processors

Regulations:

 

20 NYCRR 528.29

Precious Metal Bullion: Sales

NC

Statutes:

N.C. Gen. Stat. 66-163 through 66-174

Regulation of Precious Metal Businesses

N.C. Gen. Stat. 80-40 through 80-44

Stamping of Gold and Silver Articles

N.C. Gen. Stat. 14-13

Counterfeiting Coin

Regulations:

17 N.C.A.C. 7B.0111

Stamps, Coins, Etc.

17 N.C.A.C. 7B.3004

Secondhand Property

Table 1: -Continued-

Jurisdiction

Citation

Subject Matter

ND

Regulations:

N.D. Admin. Code 13-04-02-13

Receipts for Collection of Currency and Coin

N.D. Admin. Code 33-24-05-230

Requirements for Recyclable Materials Utilized for Precious Metal Recovery

N.D. Admin. Code 81-04.1-01-17

Used or Secondhand Tangible Personal Property

N.D. Admin. Code 81-04.1-03-05

Sales of Legal Tender Coins, Currency, and Precious Metals

OH

Statutes:

ORC Ann. 4728.01 through 4728.99

Precious Metals Dealers

ORC Ann. 4737.011

Secondhand Dealers; Exemption for Dealers in Precious Metals or Jewels

ORC Ann. 1109.63

Coin and Bullion Transactions

ORC Ann. 1329.26 through 1329.27

Sale of Goods Marked "Sterling" or "Sterling Silver"; Sale of Goods Improperly Marked "Coin" or "Coin Silver"

Regulations:

OAC Ann. 1301:8-6-01 through 1301:8-6-06

Precious Metal Dealers

OK

Statutes:

13 Okl. St. 134

Precious Metals and Other Valuables -- Liability for Loss or Injury

15 Okl. St. 611 through 15 Okl. St. 615

Sale of Secondhand Watches

59 Okl. St. 1521 through 59 Okl. St. 1532

Precious Metal and Gem Dealers

Regulations:

O.A.C. 160:60-1-1 through 160:60-9-6

Precious Metal and Gem Dealers

O.A.C. 710:65-19-50

Coins and Bullion

O.A.C. 710:65-19-306

Secondhand Stores

OR

Statutes:

ORS 695.210 through 695.990

Watch Dealers

Table 1: -Continued-

Jurisdiction

Citation

Subject Matter

PA

Statutes:

53 P.S. 25251 through 53 P.S. 25257

Secondhand Dealers

73 P.S. 1931 through 73 P.S. 1942

Purchase and Sale of Precious Metals

Regulations:

70 Pa. Code 37.1 through 70 Pa. Code 37.2

Precious Metals

37 Pa. Code 501.1 through 37 Pa. Code 501.11

Purchase and Sale of Precious Metals

PR

Statutes:

10 L.P.R.A. 2201 through 10 L.P.R.A. 2211

Purchase and Sale of Precious Metals and Stones Regulation

RI

Statutes:

R.I. Gen. Laws 6-11-1 through 6-11-8

Gold and Silver Products

R.I. Gen. Laws 6-11.1-1 through 6-11.1-14

Purchase and Sale of Precious Metals

R.I. Gen. Laws 6-13.2-1 through 6-13.2-8

Comparison Price Advertising for Precious Metal and Stones

R.I. Gen. Laws 19-26-9

Precious Metals -- Acts Tending to Destroy Identity of Articles Pawned

Regulations:

CRIR 30-000-004

Rules and Regulations for Precious Metals

SC

Statutes:

S.C. Code Ann. 39-15-20 through 39-15-40

Fraud in Sale of Goods Marked "Sterling", "Coin" or “Coin Sterling”

S.C. Code Ann. 40-54-10 through 40-54-100

Dealers in Precious Metals

Regulations:

S.C. Code Regs. 61-79.266, SubPart F

Recyclable Materials Utilized for Precious Metal Recovery

SD

Statutes:

S.D. Codified Laws 9-34-9

Regulation of Secondhand and Junk Stores

Regulations:

ARSD 64:06:03:39

Secondhand Stores

TN

Statutes:

Tenn. Code Ann. 38-1-201 through 38-1-204

Scrap Jewelry and Metal Dealers

Table 1: -Continued-

Jurisdiction

Citation

Subject Matter

TX

Statutes:

Tex. Bus. & Com. Code 17.18 through 17.23

Regulating the Sale or Transfer of Secondhand Watches

Tex. Occ. Code 1956.051 through 1956.070

Sale of Crafted Precious Metal to Dealers

Tex. Tax Code 151.336

Certain Coins and Precious Metals

Regulations:

30 TAC 335.241

Recyclable Materials Utilized for Precious Metal Recovery

34 TAC 3.336

Gold, Silver, Coins, and Currency

UT

Statutes:

Utah Code Ann. 76-10-900.5 through 76-10-926

Regulation of Metal Dealers

Utah Code Ann. 13-32a-104

Secondhand Merchandise; Register: Contents and Identification of Items

VT

Statutes:

13 V.S.A. 1809 through 13 V.S.A. 1810

Counterfeiting Coin; Tools for Counterfeiting Coin

13 V.S.A. 1811

Making Imitation of Gold or Silver

VA

Statutes:

Va. Code Ann. 18.2-170

Forging Coin or Bank Notes

Va. Code Ann. 18.2-173

Possessing Forged Coin or Bank Notes

Va. Code Ann. 18.2-218

Failure to Indicate Goods are Seconds, Irregulars, or Secondhand

Va. Code Ann. 18.2-233 through 18.2-235

Sale of Goods Marked "Sterling" and "Sterling Silver"; Sale of Goods Marked "Coin" and "Coin Silver"; Regulating Sale of Merchandise Made of Gold

Va. Code Ann. 54.1-4100 through 54.1-4111

Precious Metals Dealers

Va. Code Ann. 59.1-131 through 59.1-136

Watches

VI

Statutes:

27 V.I.C. 308 through 27 V.I.C. 320

Traders in Gold, Silver and Other Valuable Items

WA

Statutes:

Rev. Code Wash. (ARCW) 9.16.100 through 9.16.140

Use of the Words Sterling Silver, Sterling, Coin Silver, and Gold

Rev. Code Wash. (ARCW) 18.11.075

Secondhand Property, When Exempt

Rev. Code Wash. (ARCW) 19.60.010 through 19.60.901

Secondhand Dealers

Regulations:

WAC 458-20-248

Sales of Precious Metal Bullion and Monetized Bullion

Table 1: -Continued-

Jurisdiction

Citation

Subject Matter

WV

Statutes:

W. Va. Code 61-3-51

Precious Metal and Gem Dealers; Records; Prohibited Acts

W. Va. Code 47-6-4

Silver Coin as Legal Tender

WI

Statutes:

Wis. Stat. 134.25 through 134.33

Misbranding of Gold, Gold Plated, Silver, Sterling Silver, Coin Silver, and Platinum Articles

Wis. Stat. 134.71

Pawnbrokers and Secondhand Article and Jewelry Dealers

Regulations:

Wis. Adm. Code Tax 11.78

Stamps, Coins and Bullion

Wis. Adm. Code NR 273.04 through NR 273.046

Precious Metals

Source: Lexis Nexis, 50 State Comparative Legislation/Regulations, Precious Metal and Gem Dealing (July 2009).

MR:ts