BILL ANALYSIS
SB 627
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Date of Hearing: June 30, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
SB 627 (Calderon) - As Amended: June 22, 2009
SENATE VOTE : 39-0
SUBJECT : Catalytic converters: junk dealers and recyclers.
SUMMARY : Requires core recyclers, as defined, to comply with
additional recordkeeping and identification procedures and new
payment restrictions when purchasing catalytic converters, as
defined. Specifically, this bill :
1)Requires a core recycler who accepts a catalytic converter for
recycling to maintain a written record of the following:
a) The place and date of each sale or purchase of a
catalytic converter made in the conduct of his or her
business as a core recycler;
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; if the seller is a business, the written
record shall include the name, address, and telephone
number of the business;
c) A description of the catalytic converters purchased or
sold, including the item type and quantity, amount paid for
the catalytic converter, identification number, if any, and
the vehicle identification number; and,
d) A statement indicating either that the seller of the
catalytic converter 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.
2)Requires a core recycler engaged in the selling or shipping of
used catalytic converters to other recyclers or smelters to
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retain information on the sale that includes all of the
following:
a) The name and address of each person to whom the
catalytic converter is sold or disposed of;
b) The quantity of catalytic converters being sold or
shipped;
c) The amount that was paid for the catalytic converters
sold in the transaction; and,
d) The date of the transaction.
3)Prohibits a core recycler from providing payment for a
catalytic converter unless all of the following requirements
are met:
a) The payment is made by check and provided to the seller
by either of the following:
i) Mailed to the seller at the address provided;
ii) Mailed to the seller's business address, for a
seller that is a business;
iii) Collected by the seller from the recycler on the
third business day after the date of sale; or,
iv) By immediate payment by check, debit card or credit
card, if the seller is a business that has a contract
with a core recycler or is a licensed auto dismantler.
b) The core recycler obtains:
i) A clear photograph or video of the seller at the
time of sale;
ii) A copy of the valid driver's license of the seller
or the seller's agent containing a photograph and an
address of the seller or the seller's agent, or a copy of
a state or federal government issued identification card
containing a photograph and an address of the seller or
the seller's agent;
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iii) A clear photograph or video of the catalytic
converter being sold; and,
iv) A written statement from the seller indicating how
the seller obtained the catalytic converter.
4)Specifies that if the seller prefers to have the check for the
catalytic converter mailed to an alternative address, as
defined, the core recycler shall obtain a copy of a driver's
license or identification card and a gas or electric utility
bill addressed to the seller at the alternative address, as
specified.
5)Exempts a core recycler that buys catalytic converters,
transmissions, or other parts removed from a vehicle from the
payment requirements if the core recycler and the seller have
a written agreement for the transaction.
6)Requires a core recycler to keep and maintain the information
required pursuant to this bill for no less than two years, and
to make the information available for inspection by local law
enforcement upon demand.
7)States that a person who makes, or causes to be made, a false
or fictitious statement regarding any information required
pursuant to this bill, or who violates the requirement of this
bill, is guilty of a misdemeanor.
8)Sets forth the following punishments upon conviction for
persons who knowingly and willfully violate the requirements
of this bill as follows:
a) A fine of $1,000 for a first conviction;
b) A fine of not less than $2,000 for a second conviction;
c) A fine of not less than $4,000 for a third and
subsequent conviction;
9)Authorizes a court to order the defendant to cease engaging in
the business of a core recycler for a period not to exceed 30
days for a second conviction, and for a period not less than
one year for a third and subsequent conviction, in addition to
any fines imposed.
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10)Specifies that the requirements of this bill apply to core
recyclers and not to a subsequent purchaser of a catalytic
converter who is not a core recycler.
11)Defines "core recycler" as 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; however, a person or business that buys a
vehicle that may contain these parts is not a "core recycler."
EXISTING LAW :
1)Prohibits a junk dealer or recycler from providing payment for
nonferrous material, as defined, unless the payment is made by
cash or check, the check is mailed or the cash or check is
provided no earlier than 3 days after the date of sale, and
the dealer or recycler obtains a photograph or video of the
seller and certain other identifying information, as
specified, which must be retained by the dealer or recycler
for two years.
2)Requires a junk dealer or recycler to allow for periodic
inspection of any premises maintained for purposes of
determining compliance with the recordkeeping requirements,
and, upon inspection, to produce his or her sales and purchase
records.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "The
theft of scrap metal is one of the fastest growing crimes in
California, as well as the nation as a whole. Valuable metals
have been stripped from building sites, farms, utilities, and
several other sites and are then sold to metal recyclers for a
profit. In recent years, the costs of several metals, such as
those found in catalytic converters, made the theft and then
sale of converters increasingly profitable. Thieves prey on
parking lots, going from car to car, taking their catalytic
converters. The valuable metals inside (platinum and rhodium
being the most common) are then exchanged for money when the
thief takes the converters to metal recyclers."
Background . Catalytic converters are devices that reduce
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pollution-causing emissions. Since 1975, all vehicles produced
in the United States must have a catalytic converter as part of
the exhaust system. 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.
Vehicles that sit higher from the ground, such as trucks,
pick-ups and sports utility vehicles, are particularly
vulnerable to catalytic converter theft because thieves can
slide underneath without having to jack up the vehicle to gain
access to the catalytic converter. With just a few cuts of a
battery-powered saw, the catalytic converter can be removed in
less than a minute.
This bill sets forth a series of requirements for sellers and
recyclers of catalytic converters with the objective to provide
law enforcement with additional tools to prevent the
increasingly widespread theft of nonferrous materials.
Proposed amendments . The author has indicated he would like to
amend this bill as follows, to make clear that transactions
between auto dismantlers and core recyclers are exempt from
several of the identification collection requirements:
Page 4, line 27, insert:
(f) Core recyclers accepting catalytic converters from licensed
auto dismantlers or from recyclers who hold a contract with a
business which sells catalytic converters for recycling purposes
are required to collect only the following information:
(1)Name of seller or agent acting on behalf of the seller
(2)Date of transaction
(3)Number of catalytic converters received in the course of the
transaction
(4)Amount of money that was paid for catalytic converters in the
course of the transaction
Arguments in support . The Association of California Insurance
Companies writes in support, "While any theft results in an
adverse economic impact for the victim, the theft of materials
covered by SB 627 results in significant insurance claims which
impact all insurance consumers. The bill is intended to stem
the huge increases in catalytic converters theft that have
occurred in California during the past few years and is
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particularly targeted at those substantial transactions which
may suggest illegal acquisition of the materials at the outset."
Related legislation .
AB 85 (Berryhill) corrects technical errors in the existing laws
related to junk dealers and recyclers. This bill is currently
pending on the Senate Floor.
Previous legislation .
SB 691 (Calderon, Chapter 730, Statutes of 2008) requires junk
dealers and recyclers to comply with additional recordkeeping
and identification procedures and new payment restrictions when
purchasing nonferrous materials, as defined.
SB 844 (Berryhill, Chapter 731, Statutes of 2008) requires junk
dealers and recyclers to comply with additional recordkeeping
and identification procedures and new payment restrictions when
purchasing nonferrous materials, as defined.
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 electronic transfer, and copies of
the seller's identification, which must be retained for two
years.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Insurance Companies
California State Sheriffs' Association
Los Angeles County Police Chiefs' Association
Sacramento County Sheriff's Department
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Opposition
None on file.
Analysis Prepared by : Rebecca May / B. & P. / (916) 319-3301