BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1508|
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THIRD READING
Bill No: AB 1508
Author: Carter (D)
Amended: 7/2/12 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 8-1, 6/25/12
AYES: Price, Emmerson, Corbett, Correa, Hernandez, Negrete
McLeod, Vargas, Wyland
NOES: Strickland
ASSEMBLY FLOOR : 75-0, 5/14/12 - See last page for vote
SUBJECT : Junk dealers and recyclers: nonferrous
materials
SOURCE : San Bernardino County Sheriff
DIGEST : This bill revises the exemption from the
requirement to collect seller information and delay payment
for three days, for the sale of nonferrous materials with a
value under $20, to require that the majority of the
transaction must be to purchase beverage containers, and
excludes purchase of copper or copper alloys from that
exemption.
ANALYSIS :
Existing law:
1. Regulates junk dealers and recyclers and defines "junk"
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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
personal property,
excluding livestock. (Business and Professions Code
(BPC) Section 21600)
2. Provides that "scrap metals and alloys" includes, but is
not limited to, materials and equipment commonly used in
construction, agricultural operations and electrical
power generation, railroad equipment, oil well rigs,
nonferrous materials, stainless steel, and nickel which
are offered for sale to any junk dealer or recycler, but
does not include scrap iron, household generated waste,
or aluminum beverage containers, as defined. (BPC
Section 21600)
3. Requires junk dealers and recyclers to keep a written
record, as specified, of all junk sales and purchases
for at least two years; requires the written information
to be reported to the chief of police or sheriff, as
specified; and makes it a misdemeanor to make a false or
fictitious statement in the written record. (BPC
Section 21606)
4. Requires junk dealers and recyclers to do the following
when buying nonferrous (not containing iron) materials:
(BPC Section 21608.5 (a))
A. Pay by cash or check mailed to the seller or
collected by the seller on the third business day
after the sale. The seller may have the check mailed
to an alternative address, but not a post office box,
if the seller identifies that location by 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 no more than two
months prior to the date of sale.
B. Obtain a clear photograph or video of the seller.
C. Obtain a copy of the driver's license of the
seller containing a photograph and address or a copy
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of a state or federal government-issued
identification card with a photograph and address of
the seller.
D. Obtain a clear photograph or video of the material
being sold.
E. Preserve the information for at least two years
from the date of sale.
F. Obtain a thumbprint of the seller, as proscribed
by the Department of Justice.
5. Makes an exemption from the requirement to pay by cash
or check mailed or collected on the third business day
after the sale, if during the prior three months, the
dealer completes five or more transactions a month (on
separate days) with the seller. (BPC Section 21608.5
(b))
6. Provides that the delayed payment requirement does not
apply if the junk dealer or recycler receives or has on
file the seller's: (BPC Section 21608.5 (c))
A. Name, physical business address, business
telephone number.
B. The business license number or tax identification
number.
C. A copy of the valid driver's license of the person
delivering the material on behalf of the seller.
7. Provides an exemption from the payment restrictions and
the requirement to collect identification information
(described in #4, #5 and #6 above) when the nonferrous
material's value does not exceed $20 in a single
transaction, when the primary purpose is to redeem
beverage containers under the California Beverage
Container Recycling and Litter Reduction Act. (BPC
Section 21608.5 (d))
This bill:
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1. Modifies that exemption described in #7 above, to apply
when the majority of the transaction is for the purchase
of beverage containers.
2. Excludes the purchase of materials made of copper or
copper alloys from that exemption.
3. Makes a technical change to delete an obsolete operative
date.
Background
Metal theft has become increasingly popular within the last
decade and the theft of copper, aluminum, fire hydrants,
manhole covers, and backflow devices in particular are on
the rise, and represent a significant health and safety
concern to the public. According to an April 2, 2012
Sacramento Bee article, "The cost of addressing the crime
wave has likely surpassed $1 million over the past year.
Officials with the city's Department of Transportation
think they'll have to spend another $2 million over the
next year repairing streetlights damaged by thieves." Over
a New Year's weekend in 2011, 50 manhole covers were stolen
from the streets of Sacramento. Cities, counties, and
special districts are taking different approaches to
address metal theft. Eastern and Municipal Water Districts
have issued $500 rewards for citizens who turn in thieves.
Anaheim Public Utilities has issued a customer alert on
their website asking residents to take precautions to
protect their backflow devices. The City has further
indicated that residents may wish to increase patrol and
install video surveillance devices if they wish to further
protect their devices.
The rise in recycled metal prices has increased the demand
for such items. Metal theft has been well documented in
California. The Los Angeles Times reported an individual
stealing 45 fire hydrants within the Inland Empire.
Investigators of the incident reported, "The theft of metal
to sell as scrap, such as copper wiring, bronze fixtures
and iron from construction site, is common, especially
during a prolonged economic slump."
Metal theft increases . Forbes Magazine (May 2012) states
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that the National Insurance Crime Bureau (NICB) reports
that with metal prices rising, so have the number of
reported thefts of metals such as copper, bronze, brass and
aluminum. In fact, law enforcement agencies across the
United States and around the world had seen increased
numbers of metal thefts in the years leading up to the
economic downturn in 2008. Construction sites, churches,
cemeteries, transportation, farm equipment and homes are
just some of the targets of thieves who strip the metal and
then sell it on to scrap dealers to net themselves some
quick cash.
Forbes further indicates that critical infrastructure is at
risk. The NICB gives the example of a recent theft of
copper wiring which blacked out runway approach lights at
the Modesto, California regional airport.
A report of insurance claims related to metal thefts
covering 2009-11 identifies an 81% increase from 2006-08.
The majority of total claims (96.1%) pertained to the theft
of copper, the NICB said. Some 55% of the claims were on
commercial or business insurance policies, while 45% were
on personal policies. In the report, California ranked
fourth, nationally in the number of metal theft claims
behind Ohio, Texas and Georgia.
Enforcement concerns . Dramatic increases in metal theft
have sparked numerous legislative actions over the past
decade. However, enforcement of such provisions has proven
not to be as effective due to fiscal constraints in local
law enforcement. Deputy Sheriff Jim Currie of the Solano
County Sheriff's Office reports that metal theft is picking
up: "We've got some things in place to help step up our
surveillance, but like other agencies, we've cut back on
people and patrol time. Our Sheriff is addressing that
right now, but it has been rough with the budget situation
the way it is."
It appears that a consensus of thought seems to be that the
real problem with metal theft is not so much shortcomings
in the existing law, but the lack of resources to enforce
the law. During this time of extreme challenges to state
and local revenues and the corresponding budget shortfalls,
the ability to enforce the existing law seems to be the
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greatest challenge to solving the metal theft puzzle for
local and state law enforcement efforts.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/2/12)
San Bernardino County Sheriff (source)
California Municipal Utilities Association
City of Roseville
Irvine Ranch Water District
Liberty Mutual Group and Golden Eagle
Metropolitan Water District of Southern California
Placer County Water Agency
San Diego County Water Authority
San Juan Water District
Southern California Edison
ARGUMENTS IN SUPPORT : The author indicates that in 2008,
when Governor Schwarzenegger signed AB 844 (Berryhill,
Chapter 731, Statutes of 2008), which stiffened penalties
and procedures for recycling companies when receiving scrap
materials, that law enforcement saw a dramatic decrease in
metal thefts. However, according to the author, the
legislation provided a loophole in the enforcement of this
law, providing that if the primary purpose of the
transaction is for redeeming CRV (cans, bottles and
plastic), individuals are able to redeem cash for their
scrap metals if it remains under $20.
An example of what was intended with this provision is if a
person cleans up their garage and has a small bag of
aluminum cans and an extension cord he wants to get rid of,
he can scrap the materials for under the $20 threshold and
get paid in cash immediately. However, this loophole has
resulted in increased metal thefts, according to the
author, who states:
According to the San Bernardino County Sherriff s
Department, metal thefts have increased again to almost
the same level it was prior to the passage of AB 844
because metal thieves became aware of this loophole. In
order to obtain quick cash, thieves use pieces stolen
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from buildings and infrastructure to sell to recycling
companies, while combining their materials with aluminum
cans. Therefore, it is hard to determine the seller's
primary purpose because thieves began packaging their
stolen metal into $20 increments.
Individuals have discovered that if they keep the
material weight to under the $20 limit, or get a friend
to scrap the materials, they can be paid in cash without
having the required three day hold on transactions with
check. AB 1508 would prevent individuals from receiving
any cash for copper when bundled with other recycled
materials such as bottles and cans.
ASSEMBLY FLOOR : 75-0, 5/14/12
AYES: Achadjian, Alejo, Allen, Ammiano, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth
Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, V. Manuel Pérez, Portantino,
Silva, Skinner, Smyth, Solorio, Swanson, Torres, Wagner,
Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Atkins, Davis, Fletcher, Perea, Valadao
JJA:m 7/2/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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