BILL ANALYSIS Ó AB 1583 Page 1 Date of Hearing: May 2, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 1583 (Hernandez) - As Amended: April 9, 2012 Policy Committee: Business and Professions Vote: 9 - 0 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill prohibits any junk dealer or recycler from purchasing or receiving bulk merchandise pallets marked with an indicia of ownership from any person or entity other than the indicated owner. Specifically, this bill: 1)Prohibits junk dealers or recyclers from purchasing or receiving bulk merchandise pallets marked with an indicia of ownership from any person or entity other than the indicated owner. 2)Broadens the definition of "bulk merchandise pallets" to include any wooden or plastic carrier used by a manufacturer or distributor for bulk transport of merchandise. 3)Authorizes a junk dealer or recycler to purchase or receive bulk merchandise pallets if the seller is not the indicated owner, only if the seller or transferor provides a receipt verifying his or her current ownership or a document indicating that he or she is authorized by the owner to sell or transfer the merchandise pallets. 4)Requires a junk dealer or recycler to make payment for a single transaction involving five or more bulk merchandise pallets marked with indicia of ownership by mailed check or by cash or check collected by the seller after three business days. 5)Requires a person or entity purchasing or transporting plastic bulk merchandise containers who is in the business of recycling, shredding, or destruction of plastic bulk AB 1583 Page 2 merchandise containers, or is in the business of transporting plastic bulk merchandise containers for those purposes, to obtain a proof of ownership record or bill of lading and other identifying information from the person selling or delivering five or more containers, and to retain this information. FISCAL EFFECT Negligible, non-reimbursable costs for prosecution and/or incarceration, offset by fine revenue, for misdemeanor violations of provisions associated with obliterating the indicia of ownership on a merchandise pallet. COMMENTS 1)Purpose . This bill prohibits junk dealers and recyclers from purchasing or receiving bulk merchandise pallets marked with an indicia of ownership from anyone except the indicated owner, unless the seller or transporter provides proof of ownership. The author contends AB 1583 will ensure businesses stop losing their property because the legislation applies to all merchandise pallets, not only to plastic ones used for milk, eggs, and beverages. According to the sponsor, MillerCoors, thefts in the San Gabriel Valley alone cost local businesses nearly $10 million annually, MillerCoors typically pays approximately $30 per pallet and estimates its nationwide losses from pallet theft to be in the tens of millions of dollars per year. 2)Opposition . The California Chapters of the Institute of Scrap Recycling Industries (ISRI) writes in opposition, "Frankly, the problem is not the sufficiency of the current law; it is the lack of judicial enforcement of the current law. Simply stated, few local police agencies have the desire to redirect their scarce resources to enforce the merchandise container laws. This is not an issue of substantive law. This is an issue where dairy, bakery, and soft drink industries need to make sure the supermarkets in which their products are sold keep the merchandise containers in a secure location." 3)Related Legislation . SB 520 (Governmental Organization AB 1583 Page 3 Committee), Chapter 349, Statutes of 2007, prohibits junk dealers or recyclers from purchasing or receiving aluminum beer kegs with marks indicating ownership, unless the kegs are being provided directly by the owner. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081