BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 627|
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THIRD READING
Bill No: SB 627
Author: Calderon (D)
Amended: 5/5/09
Vote: 21
SENATE BUS., PROF. & ECON. DEVEL. COMMITTEE : 10-0, 4/27/09
AYES: Negrete McLeod, Wyland, Aanestad, Corbett, Correa,
Florez, Oropeza, Romero, Walters, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Catalytic converters: junk dealers and
recyclers
SOURCE : Author
DIGEST : This bill requires core recyclers, as
defined, to comply with additional recordkeeping and
identification procedures and new payment restrictions
when purchasing catalytic converters, as defined.
ANALYSIS :
Existing law, the Business and Professions Code:
1. Regulates junk dealers and recyclers and defines "junk"
as secondhand and used machinery and all ferrous
(containing iron) and nonferrous (excludes iron) scrap
metals (as defined) and alloys, including any and all
secondhand and used furniture, pallets, or other
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personal property, excluding livestock.
2. Defines "recycler" as any processor, recycling center,
or noncertified recycler, as defined, who buys or sells
scrap metal that constitutes "junk."
3. Requires junk dealers and recyclers to maintain a
written record of each sale or purchase made in the
course of his or her business. The record must include
the place and date of the transaction; the name,
driver's license number and state of issue, and the
license plate number and state of issue of any motor
vehicle used in transporting the junk; the name and
address of each person to whom the junk is sold and that
person's motor vehicle license number; a description of
the junk purchased or sold; and, a statement indicating
that the seller owns or is authorized to sell the junk.
Specifies that any person who makes or causes to be made
any false or fictitious statement regarding the written
record is guilty of a misdemeanor. Requires the written
information to be reported to the chief of police or
sheriff, as specified.
4. Requires every junk dealer and recycler to preserve the
written record for at least two years.
5. Authorizes the periodic inspection by any officer
holding a warrant, any person appointed by the sheriff
or any county or appointed by the head of the police
department of any city, or any officer holding a court
order directing him or her to examine the record or
property.
6. Prohibits payment for nonferrous material unless the
junk dealer or recycler follows specified procedures.
This bill:
1 Establishes definitions for proposes of the bill, "core
recycler" is a person or business, including a recycler
or junk dealer, that buys used individual catalytic
converters, transmissions, or other parts previously
removed from a vehicle; and specifies that a person or
business that buys a vehicle containing these parts is
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not a core recycler.
2. Requires a core recycler who accepts a catalytic
converter for recycling to maintain a written record
that contains:
A. The place and date of each sale or purchase.
B. The name, valid driver's license number and
state of issue, or California-issued identification
number, of the seller of the catalytic converter
and the vehicle license number, including state of
issue of a motor vehicle used in transporting the
catalytic converter to the core recycler's place
of business.
C. A description of the catalytic converters
purchased or sold, including the item type and
quantity, and identification number, if any.
D. A statement indicating either that the seller is
the owner of the catalytic converter, or the name
of the person from whom he or she has obtained the
catalytic converter, including the business, if
applicable, as shown on a signed transfer document.
3. Requires a core recycler who sells or ships used
catalytic converters to other recyclers or smelters to
retain information on the sale that includes:
A. Name and address of the buyer, or one receiving
the catalytic converters.
B. Number of catalytic converters being sold or
shipped.
C. Amount that paid for the catalytic converters in
the transaction.
D. Date of the transaction.
4. Prohibits payment for a catalytic converter unless the
core recycler, does the following:
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A. Makes payment by check mailed to the seller or
collected by the seller on the third business day
after the sale. If the seller is a business, the
check may be mailed to the business address, or the
seller that is a business may receive immediate
payment. The seller may have the check mailed to
an alternative address, other than a post office
box, if the core recycler obtains a copy of a
driver's license or identification card, and a gas
or electric utility bill addressed to the seller at
the alternate address with a payment due date not
more than two months prior to the sale date.
B. Obtains a clear photograph or video of the
seller.
C. Obtains a copy of the valid driver's license of
the seller or seller's agent containing a
photograph and address or a copy of a state or
federal government-issued identification card
containing a photograph and address of the seller
or seller's agent.
D. Obtains a clear photograph or video of the
catalytic converter.
5. Requires the core recycler to maintain the information
collected for at least two years, and make it available
for inspection by local law enforcement upon demand.
6. Imposes a misdemeanor (crime) penalty for a person who:
A. Makes or causes to be made a false or fictitious
statement regarding any information required under
the bill.
B. Violates the requirements of the bill.
7. Provides that the above requirements do not apply to
coin dealers or automobile dismantlers, as defined under
the Vehicle Code.
8. Specifies that upon conviction, a person who knowingly
and willfully violates the requirements of the bill
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shall be punished as follows:
A. For a first conviction, by a fine of $1,000.
B. For a second conviction, by a fine of not less
than $2,000. In addition to the fine, the court
may order the defendant to cease engaging in the
business of a core recycler for up to 30 days.
C. For a third and subsequent conviction, by a fine
of not less than $4,000. In addition to the fine,
the court shall order the defendant to cease
engaging in the business of a core recycler for not
less than one year.
Prior Legislation
SB 691 (Calderon), Chapter 730, Statutes of 2008) and SB
844 (Berryhill), Chapter 731, Statutes of 2008 , are
identical provisions which require junk dealers and
recyclers to comply with additional recordkeeping and
identification procedures and new payment restrictions when
purchasing nonferrous materials, as defined. These bills
were enacted in response to the massive increase of metal
theft in California in recent years. This bill essentially
mirrors those provisions, and likewise requires: (a)
additional Identification for sellers and a disclosure of
where materials came from; (b) risk of fines or
convictions for recyclers caught violating this law; and
(c) check-only transactions with a 3-day wait for
non-business sellers.
SB 447 (Maldonado), Chapter 732, Statutes of 2008 , requires
a junk dealer or recycler to report information about each
sale or purchase of junk to the chief of police of the city
or the sheriff of the county in which the junk dealer or
recycler purchased the junk, in the same manner as required
by a secondhand dealer or coin dealer, as specified.
AB 1778 (Ma), Chapter 733, Statutes of 2008 , prohibits a
junk dealer or recycler from providing payment for
newspaper valued at $50 or more or California redemption
value (CRV) containers valued at $100 or more unless
certain requirements are met including payment by check or
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electronic transfer, and copies of the seller's
identification, which must be retained for two years.
Why are Catalytic Converters Being Stolen ? Catalytic
converters are devices that reduce pollution-causing
emissions. Since 1975, all vehicles produced in the United
States must have a catalytic converter as part of the
exhaust system. Some vehicles may have more than one
catalytic converter. The precious metals inside act as
catalysts; when hot exhaust enters the converter, a
chemical reaction occurs that renders toxic gases, such as
carbon monoxide and hydrocarbons, into less harmful
emissions.
Stolen catalytic converters are sold to scrap yards from
$50 to $150, and when the current prices for precious
metals are considered one can easily understand the demand.
Rhodium sells for roughly $9,500 an ounce, while platinum
pays at about $2,000.
Meanwhile, victims of catalytic converter theft are left to
deal with the aftermath. There's the hassle of a vehicle
that can't be safely driven, and the impact that has on the
victim's life. There's the high expense of having it towed
to a local repair shop, and replacement of catalytic
converters can run anywhere from $300 to $3,000, depending
on the make and model of the vehicle.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/18/09)
California State Sheriffs Association
Los Angeles County Police Chiefs Association
Sacramento County Sheriffs Department
ARGUMENTS IN SUPPORT : This bill is sponsored by the
author's office, who states that catalytic converters are
being stolen from cars and recycled for the valuable metals
inside. Current law does not lay out requirements for
buyers or sellers of used catalytic converters. Further,
recyclers of automotive "systems" (i.e. Core recyclers) are
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not specially defined in current law and therefore such
recyclers have not interpreted current law as including
them.
The author's office states that catalytic converter theft
has reached epidemic proportions. Parking lots and cars
left on the street or in driveways are vandalized by
thieves that cut off catalytic converters. The thieves
then take the converters to recyclers as the metals inside
the converters, such as platinum and rhodium, are valuable
and offer high pay from recyclers, according to the
author's office.
The author's office indicates that this bill seeks to
discourage thieves from this practice by placing several
restrictions and requirements on recyclers who accept
catalytic converters for recycling purposes. The author's
office states that the bill also defines "core recyclers"
who recycle vehicle systems such as transmissions in order
to make sure that such core recyclers are included in the
provisions of the bill.
JJA:do 5/18/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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