A BILL TO BE ENTITLED
AN ACT to modernize the record keeping of precious metals purchases by dealers AND to subject all dealers in precious metals to the same licensing and record‑keeping requirements by repealing the "ten percent or less of purchases" exemption from dealer permitting and regulation.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 66‑164 reads as rewritten:
"§ 66‑164.  Definitions.
 The following definitions apply in this Article:
(1)	 Dealer. – A person who  purchases precious metals from the  public, other than by an exempted transaction, in the form of jewelry, flatware, silver  services, or other forms and holds himself or herself out to the public by signs,  advertising, or other methods as engaging in such  purchases, including any independent contractor purchasing precious metals under any arrangement in any department  store.  Exempted transactions include (i) purchases directly from manufacturers or wholesalers of precious metals by permanently located retail merchants for their  inventories  and (ii) pawns or pledges of items made of precious metals under the provisions of Chapter 91A of the General Statutes and made to pawnbrokers as defined in G.S. 91A‑3.
(2)	 Local law‑enforcement agency. – The term means the following, as applicable:
a.	The county police force, if the dealer's business is located within a county with a police force and outside the corporate limits of a municipality.
b.	 The municipal police force, if the dealer's business is located within the corporate limits of a municipality having a police force.
c.	The county sheriff's office of the county in which the dealer's business is located, if neither sub‑subdivision a. nor b. of this subdivision applies.
(3)	 Precious metal. – Gold, silver, or platinum, as defined below, but excluding coins, medals, medallions, tokens, numismatic items, art ingots, or art bars. 
a.	 Gold. – Any item or article containing ten (10)  karats of gold or more which may be in combination or alloy with any other metal.
b.	 Silver. – Any item or article containing 925 parts per thousand of silver which may be in combination or alloy with any nonprecious metal or which is marked 'sterling'.
c.	 Platinum. – Any item or article containing 900 parts per thousand or more of platinum which may be in combination or alloy with any other metal.
"
SECTION 2.  G.S. 66‑166 reads as rewritten:
"§ 66‑166.  Exemption from  permits; record keeping under an exemption.
(a)	Any merchant claiming an exemption from the requirements of G.S. 66‑165, 66‑168, and 66‑170 due to the percentage of his total business which constitutes precious metals purchases shall file an application therefor with the local law‑enforcement agency at the same time as applications for dealers' permits are required to be filed under the provisions of this Article. The application shall be upon a  form approved by the Department of Crime Control and Public Safety and shall contain as a minimum the following information: the name, home address and business address of the applicant; the name and location of the business at its permanent address; the primary nature of the business both as to purchases and sales; the total dollar volume of purchases of precious metals during the 12‑month period next preceding the date of application; the total dollar volume of all secondhand goods purchased during the same period by the business; the percentage of precious metals purchases or acquisitions to total purchases or acquisitions of secondhand goods; and the date when the merchant commenced the business under which the exemption is claimed. Such application shall be filed under the same oath as is required for a precious metals dealer permit, shall be notarized, and shall be accompanied by a fee of five dollars ($5.00), which fee shall be retained by the local law‑enforcement agency as cost for administering claims for exemptions.
The application for exemption, if granted, shall be valid for a period of 12 months. Thereafter, if the applicant seeks an exemption for the ensuing year he shall file an application for exemption 30 days before the expiration of the prior exemption.
If in any calendar month the percentage of precious metals purchased by an exempted merchant exceeds ten percent (10%) of his total purchases, he shall file notice thereof with the local law‑enforcement agency.
(b)	Every merchant to whom an exemption has been issued pursuant to subsection (a) of this section shall maintain a record of each precious metals purchase that includes a description of the specific item or items purchased and the date of the transaction. Each record entry shall be made at the time of the transaction. These records shall be kept either (i) in a book or (ii) electronically.
The records kept by merchants to whom an exemption has been issued pursuant to subsection (a) of this section shall be open at all reasonable times to inspection on the premises by law‑enforcement agencies. If the merchant maintains a record book rather than electronic records, the book shall not be destroyed until two years after the last recorded transaction in the book. If the merchant maintains electronic records, a record entry shall not be deleted until two years after a transaction and the merchant shall provide a hard copy of the records upon the request of a law‑enforcement agency.
(c)	Local law‑enforcement shall not issue an exemption under subsection (a) of this section after September 30, 2009. Exemptions issued by local law‑enforcement under subsection (a) of this section on or before September 30, 2009, shall remain in effect until 12 months after the date of issuance."
SECTION 3.  G.S. 66‑166 is repealed.
SECTION 4.  G.S. 66‑169 reads as rewritten:
"§ 66‑169.  Records to be kept.
Every dealer to whom a permit has been issued pursuant to G.S. 66‑165 shall maintain  serially numbered records of each and every precious metals transaction. Each serially numbered record shall be made at the time of the transaction and shall contain a description of the transaction. A valid description shall include each of the following applicable and available items of information: the manufacturer's name, the model, the model number, the serial number, and any engraved numbers or initials found on the  items; the date of the  transaction;  the name, sex, race, residence, telephone number and driver's license  number of the person selling the items  purchased; and the signature of both the dealer and the seller. In the event the seller cannot furnish  photographic identification in the form of a drivers license, State‑issued identification card, passport, or military identification  card, the dealer shall require two forms of positive identification.
The serially numbered records required by this section shall be kept either (i) in a paginated, bound book or set of books with pages numbered in sequence or (ii) in an electronic database that prevents record deletion and tracks all modifications to records and that provides for electronic signatures.
The  records shall be open at all reasonable times to inspection on the premises by law‑enforcement  agencies, and an individual record shall  be  retained for at least two years after a transaction. If a dealer maintains a record book rather than an electronic database, the book shall be retained until at least two years following the last  recorded transaction. A copy of each serially numbered record  entry shall be filed within 48 hours of the transaction in the office of the local law‑enforcement agency. Mailing the required copy to the local law‑enforcement agency within 48 hours of the transaction shall constitute compliance with this section. If a dealer maintains an electronic database, these records may be electronically reported to the local law‑enforcement agency by transmission over a computer network, including the Internet, or by facsimile machine in a manner authorized by the local law‑enforcement agency. Regardless of whether the local law‑enforcement agency allows electronic reporting, a dealer shall provide a hard copy of records upon the request of a law‑enforcement agency.
The files of local law‑enforcement agencies which contain such copies of  records shall not be subject to inspection and examination as authorized by G.S. 132‑6. Any public official or employee who shall knowingly and willfully permit any person to have access to or custody or possession of any portion of such files, unless the person is one specifically authorized by the local law‑enforcement agency to have access  for purposes of law‑enforcement investigation or civil or criminal proceedings, shall be guilty of a Class 3 misdemeanor and upon conviction shall only be  fined, in the discretion of the  court,  up to five hundred dollars ($500.00).
"
SECTION 5.  Section 1 of this act becomes effective October 1, 2009.  Section 3 of this act becomes effective October 1, 2012.  The remainder of this act is effective when it becomes law.