1 South Carolina General Assembly 2 116th Session, 2005-2006 3 4 S. 394 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Senator Mescher 10 Document Path: l:\s-res\wcm\007meta.kmm.doc 11 12 Introduced in the Senate on February 2, 2005 13 Introduced in the House on March 9, 2006 14 Currently residing in the House Committee on Judiciary 15 16 Summary: Precious and semi precious metals business and dealers 17 18 19 HISTORY OF LEGISLATIVE ACTIONS 20 21 Date Body Action Description with journal page number 22 2/2/2005 Senate Introduced and read first time SJ-16 23 2/2/2005 Senate Referred to Committee on Labor, Commerce and Industry SJ-16 24 3/2/2006 Senate Committee report: Favorable Labor, Commerce and Industry SJ-10 25 3/7/2006 Senate Read second time SJ-11 26 3/8/2006 Senate Read third time and sent to House SJ-28 27 3/9/2006 House Introduced and read first time HJ-5 28 3/9/2006 House Referred to Committee on Judiciary HJ-5 29 30 31 VERSIONS OF THIS BILL 32 33 2/2/2005 34 3/2/2006 35 1 Indicates Matter Stricken 2 Indicates New Matter 3 4 COMMITTEE REPORT 5 March 2, 2006 6 7 S. 394 8 9 Introduced by Senator Mescher 10 11 S. Printed 3/2/06--S. 12 Read the first time February 2, 2005. 13 14 15 THE COMMITTEE ON 16 LABOR, COMMERCE AND INDUSTRY 17 To whom was referred a Bill (S. 394) to amend Section 18 40-54-10 of the 1976 Code, relating to dealers in precious metals, 19 to provide a definition of business; to amend Section 40-54-70, 20 relating, etc., respectfully 21 REPORT: 22 That they have duly and carefully considered the same and 23 recommend that the same do pass: 24 25 GLENN F. McCONNELL for Committee. 26 27

1 [394-1] 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND SECTION 40-54-10 OF THE 1976 CODE, 12 RELATING TO DEALERS IN PRECIOUS METALS, TO 13 PROVIDE A DEFINITION OF BUSINESS; TO AMEND 14 SECTION 40-54-70, RELATING TO A DEALER’S CIVIL 15 LIABILITY FOR DAMAGES TO THE TRUE OWNER FOR 16 KNOWINGLY PURCHASING STOLEN PRECIOUS METAL, 17 TO INCLUDE THE PURCHASE OF A PRECIOUS OR 18 SEMIPRECIOUS STONE OR GEM, TO REQUIRE A 19 REASONABLE INQUIRY BY THE DEALER INTO THE TRUE 20 OWNERSHIP OF THE ITEM, AND TO PROVIDE FOR THE 21 ADDITIONAL REMEDY OF IMMEDIATE RETURN OF THE 22 ITEM UPON DEMAND BY THE TRUE OWNER; AND TO 23 AMEND VARIOUS OTHER SECTIONS OF CHAPTER 54 OF 24 TITLE 40 TO MAKE CERTAIN TECHNICAL AND OTHER 25 CHANGES. 26 27 Be it enacted by the General Assembly of the State of South 28 Carolina: 29 30 SECTION 1. Section 40-54-10 of the 1976 Code is amended to 31 read: 32 33 “Section 40-54-10. As used in this chapter: 34 (1) ‘Business’ means the purchase of precious metal or 35 precious or semiprecious stones or gems for profit. 36 (1)(2) ‘Dealer’ means any person, corporation, or partnership 37 who buys precious metal or precious or semiprecious stones or 38 gems from the general public, whether in bulk or in manufactured 39 form, with an intent to obtain a monetary profit for himself or for a 40 principal. 41 (2)(3) ‘Precious metal’ means any article made in whole or in 42 part of gold, silver, or platinum.

1 [394] 1 1 (3)(4) ‘Precious or semiprecious stone or gem’ means any stone 2 or gem that is rare or costly or any stone or gem that is of lower 3 value than those classified as precious. 4 (4)(5) ‘Local law enforcement agency’ means the chief of 5 police for businesses located within the corporate limits of a 6 municipality and the county law enforcement agency for 7 businesses located outside the corporate limits of a municipality. 8 (5)(6) ‘Permanent place of business’ means a fixed premises 9 either owned by the dealer or leased by him. One year’s lease is a 10 presumption of permanency. 11 (6)(7) ‘Places proposed to do business’ means the counties or 12 municipalities in which the dealer intends to purchase precious 13 metals or precious or semiprecious stones or gems or both precious 14 metals and precious or semiprecious stones or gems. 15 (7)(8) ‘Purchase’ means the acquisition of precious metal or 16 precious or semiprecious stones or gems or both precious metal 17 and precious or semiprecious stones or gems for a consideration of 18 cash, goods, or other precious metals or precious or semiprecious 19 stones or gems or both precious metals and precious or 20 semiprecious stones or gems. Trade-ins are covered by the 21 provisions of this chapter unless the item traded was purchased 22 directly from the dealer allowing the trade. 23 (9) ‘Seller’ means a member of the general public making a 24 sale or offer of sale of precious metal or precious or semiprecious 25 stones or gems.” 26 27 SECTION 2. The first two undesignated paragraphs of Section 28 40-54-20 of the 1976 Code are amended to read: 29 30 “No A dealer as defined herein shall not operate a business in 31 the State of South Carolina unless he first obtains a permit from 32 the local law enforcement agency to engage in the business of 33 purchasing precious metals from the local law enforcement agency 34 and operates only from a permanent place of business. No A 35 dealer shall must not operate upon public property nor or from a 36 vehicle, flea market, hotel room, or similar temporary location. 37 The form of the permit to engage in the business of purchasing 38 precious metals shall must be prescribed by the State Law 39 Enforcement Division and all. All applicants for a permit under 40 this chapter, whether a person, firm, or corporation, shall must file 41 a written sworn application signed by the applicant if an 42 individual, by all the partners if a partnership, and by the president 43 if a corporation, with the local law enforcement agency showing:”

1 [394] 2 1 2 SECTION 3. The first undesignated paragraph of Section 3 40-54-40 of the 1976 Code is amended to read: 4 5 “Every A dealer shall must keep a book in which must be 6 written at the time of any a purchase: of precious metal or 7 precious or semiprecious stones or gems made from the general 8 public, whether in bulk or manufactured form, the date of 9 purchase,; the amount of money or other property exchanged for 10 the metal, stones, or gems,; the name, sex, race, age, address, and 11 driver’s license number of the person selling the items, articles, or 12 things bought,; and the number and nature and brand name of the 13 items, articles, or things. Descriptions must include size, weight, 14 patterns, or engraving or any unusual identification marks. If the 15 seller does not have a driver’s license, some other another positive 16 identification bearing his photograph and an identifying number 17 may be substituted. If the seller cannot is unable to produce a 18 driver’s license or other positive identification, the dealer may 19 shall not buy any merchandise make a purchase from him. Every 20 dealer shall, at the time of purchase, At the time of purchase, a 21 dealer must obtain the signature of the seller as part of the 22 recording of the transaction.” 23 24 SECTION 4. Section 40-54-50 of the 1976 Code is amended to 25 read: 26 27 “Section 40-54-50. (A) No A dealer may shall not make a 28 purchase any precious metal from a minor unless the minor is 29 accompanied by his parent or guardian with appropriate 30 identification as required by Section 40 - 54 - 40. 31 (B) All precious metals purchased purchases made by a dealer 32 shall must be held by the dealer at his permanent place of business 33 or at another suitable location in the State of South Carolina 34 without being resold, melted, or altered in any manner, for a period 35 of seven days from the purchase date. All goods required to be 36 held under pursuant to this section shall at all reasonable times be 37 open are subject to inspection, at reasonable times, by any a law 38 enforcement agency.” 39 40 SECTION 5. Section 40-54-60 of the 1976 Code is amended to 41 read: 42

1 [394] 3 1 “Section 40-54-60. Possession of equipment which has been 2 used, or is being used, for the melting, crushing, or altering other 3 alteration of the precious metals, stones, or gems is unlawful 4 unless possessed by a dealer with a valid permit as provided in 5 Section 40-54-20.” 6 7 SECTION 6. Section 40-54-70 of the 1976 Code is amended to 8 read: 9 10 “Section 40-54-70. (A) A dealer shall not make a purchase 11 from a seller if there is evidence of ownership by a third party 12 without first taking reasonable steps to ascertain the item’s true 13 ownership. A dealer must return an item so purchased, on demand 14 and without a fee, to the third party owner. 15 (B) Any A dealer buying precious metal making a purchase 16 with knowledge that the metal, stone, or gem has been stolen shall 17 be is liable to the lawful owner of such the metal, stone, or gem in 18 an amount triple the fair market value of the stolen items item, 19 computed at the time of the theft, and shall be is liable for a 20 reasonable attorney’s fee as the court in its discretion may award. 21 This shall be a civil remedy and is in addition to any other civil 22 and criminal remedies provided by the law. Provided, any 23 However, a dealer, having purchased precious metal who makes a 24 purchase in compliance with the provisions of this chapter, such 25 metal subsequently but the item being shown is subsequently 26 shown to have been stolen by a member of the immediate family 27 of the rightful owner, may demand reimbursement from the owner 28 equal to the amount paid for the metal item before returning the 29 metal item to the owner.” 30 31 SECTION 7. Section 40-54-90 of the 1976 Code is amended to 32 read: 33 34 “Section 40-54-90. The provisions of this chapter shall regulate 35 the business of purchasing precious metals and precious or 36 semiprecious stones or gems in this State and shall preempt any 37 ordinances passed by political subdivisions purporting to regulate 38 such the business.” 39 40 SECTION 8. Section 40-54-100 of the 1976 Code is amended to 41 read: 42

1 [394] 4 1 “Section 40-54-100. This chapter shall does not apply to the 2 following specific transactions: 3 (1) a transaction between dealers of precious metals where if 4 the selling dealer has already complied with the seven-day holding 5 period, nor shall they apply or to transactions between coin dealers 6 and coin collectors occurring at regularly scheduled numismatic 7 conventions.; 8 (2) the purchase of manufactured items bought directly from 9 the manufacturer or his authorized representatives.; or 10 (3) the purchase of bulk precious metals brought purchases 11 made directly from the commodity exchanges, banks, dealers, or 12 licensed brokers.” 13 14 SECTION 9. If any section, subsection, paragraph, subparagraph, 15 sentence, clause, phrase, or word of this act is for any reason held 16 to be unconstitutional or invalid, such holding shall not affect the 17 constitutionality or validity of the remaining portions of this act, 18 the General Assembly hereby declaring that it would have passed 19 this chapter, and each and every section, subsection, paragraph, 20 subparagraph, sentence, clause, phrase, and word thereof, 21 irrespective of the fact that any one or more other sections, 22 subsections, paragraphs, subparagraphs, sentences, clauses, 23 phrases, or words hereof may be declared to be unconstitutional, 24 invalid, or otherwise ineffective. 25 26 SECTION 10. This act takes effect upon approval by the 27 Governor and applies to purchases made after that date. 28 ----XX---- 29

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