At its regular meeting on Feb 6, Houston City Council voted overwhelmingly to enact an ordinance requested by the Houston Police Department to regulate the sale of precious metals, including gold within the city. Traditional pawn shops are regulated under other statutes, and will not be affected by the new ordinance.
The 14-page ordinance requires all merchants purchasing or selling gold to be licensed, and to use an Internet- based service for recording and tracking gold sales. The ordinance provides for precise documentation of the items sold. Customers offering to sell gold jewelry or other precious metals must present a photo id issued by the Texas Department of Motor Vehicles, provide a thumb print, and be photographed with a digital camera. The items being sold must also be described precisely and the quality of the materials must be specified.
A merchant who fails to comply with the ordinance can be convicted of a Class C misdemeanor and fined up to $500 for each day the business is open and in violation of the new law.
The purpose of the law is to discourage the rising trend of theft of jewelry in homes with easy re-sale of the items for cash. The reporting method will include each transaction in a national database accessible to all police officers. The process gives a much greater chance of recovering stolen goods and identifying the individuals who try to sell them. However, because the ordinance applies only to the City of Houston, it would not deter a jewelry thief from selling stolen property at a gold dealer located outside the city limits. Mayor Parker and several counselors stated that they hoped Harris County and the State of Texas would soon follow with a similar ordinance.
Debate on the ordinance was extended for discussion of five amendments proposed by City Counselor Helena Brown of District A. While the amendments were all defeated, they provided an opportunity to clarify a number of elements of the new law.
Generally, the new reporting requirements are not expected to be considered burdensome to most gold merchants. Police officers stated that they had met with over 250 gold dealers in more than 5 public meetings throughout the city during the past year, and none raised an objection. The required reports can be submitted from any computer, and almost every business has sufficient Internet connections and hardware to make the reports. As a result, objections raised by Counselor Brown concerning any extra time for reporting or possible unfortunate delays were deemed inapplicable to the Internet-based tracking system.
Counselor Brown also alleged that the photograph and thumb print requirements were an unwarranted intrusion on private citizens. However, several speakers pointed out that photo id's and thumb-prints are now common requirements in many establishments including banks and gymnasiums. Most people do not consider the requirement offensive or burdensome.
In another amendment, Counselor Brown argued that the failure to comply with the new administrative rules should be punishable only by a civil proceeding rather than a misdemeanor fine. However, City Attorney Dave Feldman explained that changing the language of the ordinance to impose only civil penalties would make it ambiguous. The class C misdemeanor is the lowest class of crime, similar to parking tickets. Police officers can issue citations for violations without arresting the offender and taking him or her jail as would be required with more serious crimes.
The text of the ordinance appeared on pages 102-116 of the Agenda backup for February 6. It will be codified as a new Article IV in Chapter 7 and a revision in Chapter 1 Sections 1-10 and 1-15. related to crafted precious metals.