BILL ANALYSIS Ó SENATE COMMITTEE ON PUBLIC SAFETY Senator Loni Hancock, Chair A 2011-2012 Regular Session B 1 9 7 AB 1971 (Buchanan) 1 As Amended April 30, 2012 Hearing date: June 12, 2012 Penal Code SM:mc METAL THEFT HISTORY Source: Bay Area Rapid Transit (BART) Prior Legislation: AB 316 (Carter) - Chapter 317, Statutes of 2011 AB 2372 (Ammiano) - Chapter 693, Statutes of 2010 AB 237 (Carter) - 2009, failed passage in Senate Public Safety SB 447 (Maldonado) - Chapter 732, Statutes of 2008 SB 691 (Calderon) - Chapter 720, Statutes of 2008 AB 844 (Berryhill) - Chapter 731, Statutes of 2008 AB 1778 (Ma) - Chapter 733, Statutes of 2008 AB 1859 (Adams) - Chapter 659, Statutes of 2008 AB 2724 (Benoit) - 2008, failed passage in Senate Public Safety Support: California Farm Bureau Federation; California Railroad Industry; California Transit Association; Central Valley Flood Control Association; East Valley Water District; El Dorado Irrigation District; Orchard Dale Water District; Rowland Water District; San Diego County Board of Supervisors; San Gabriel Valley Water Association; Santa Clara Valley Transit Authority; Southern California Edison; Eastern Municipal Water (More) AB 1971 (Buchanan) Page 2 District; AT&T Opposition:None known Assembly Floor Vote: Ayes 76 - Noes 0 KEY ISSUES SHOULD THE MAXIMUM FINE FOR JUNK AND SECONDHAND DEALERS WHO KNOWINGLY PURCHASE METALS USED IN TRANSPORTATION OR PUBLIC UTILITY SERVICES WITHOUT DUE DILIGENCE BE INCREASED FROM $250 TO $1,000? SHOULD IT BE CLARIFIED THAT, FOR PURPOSES OF THE VANDALISM STATUTE, "DAMAGES" INCLUDES DAMAGE CAUSED TO PUBLIC TRANSIT PROPERTIES AND FACILITIES, PUBLIC PARK PROPERTIES AND FACILITIES, AND PUBLIC UTILITIES AND WATER PROPERTIES AND FACILITIES? PURPOSE The purpose of this bill is to increase the maximum fine for junk and second-hand dealers who knowingly purchase metals used in transportation or public utility services without due diligence from $250 to $1,000; (2) clarify that, for purposes of the vandalism statute, "damages" includes damage caused to public transit properties and facilities, public park properties and facilities, and public utilities and water properties and facilities; and (3) make specified findings and declarations. Existing law states that every person who, being a dealer in or collector of junk, metals or secondhand materials, or the agent, employee, or representative of such dealer or collector, buys or receives any wire, cable, copper, lead, solder, mercury, iron or brass which he or she knows or reasonably should know is ordinarily used by or ordinarily belongs to a railroad or other transportation, telephone, telegraph, gas, water or electric (More) AB 1971 (Buchanan) Page 3 light company or county, city, city and county or other political subdivision of this state engaged in furnishing public utility service without using due diligence to ascertain that the person selling or delivering the same has a legal right to do so, is guilty of criminally receiving that property, and is punishable, by imprisonment in a county jail for not more than one year, or by imprisonment pursuant to subdivision (h) of Section 1170, or by a fine of not more than $250, or by both that fine and imprisonment. Any person buying or receiving material described above shall obtain evidence of his or her identity from the seller including, but not limited to, that person's full name, signature, address, driver's license number, vehicle license number, and the license number of the vehicle delivering the material. The record of the transaction shall include an appropriate description of the material purchased and such record shall be maintained pursuant to Section 21607 of the Business and Professions Code. (Penal Code § 496a.) Existing law states that every person who steals, takes, or carries away copper materials of another, including, but not limited to, copper wire, copper cable, copper tubing, and copper piping, which are of a value exceeding $950 is guilty of grand theft. Grand theft of copper shall be punishable as a misdemeanor, by a fine not exceeding $2,500, by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment, or as a felony, punishable by 16 months, two or three years in the county jail, pursuant to subdivision (h) of Section 1170 and a fine not exceeding $10,000. Existing law provides that every junk dealer and every recycler, as defined, in this state is required to keep a written record of all sales and purchases made in the course of his or her business. (Bus. & Prof. Code § 21605.) Those records must include: (More) AB 1971 (Buchanan) Page 4 (1) The place and date of each sale or purchase of junk made in the conduct of his or her business as a junk dealer or recycler. (2) The name, valid driver's license number and state of issue or California-issued identification card number, and vehicle license number including the state of issue of any motor vehicle used in transporting the junk to the junk dealer's or recycler's place of business. (3) The name and address of each person to whom junk is sold or disposed of, and the license number of any motor vehicle used in transporting the junk from the junk dealer's or recycler's place of business. (4) A description of the item or items of junk purchased or sold, including the item type and quantity, and identification number, if visible. (5) A statement indicating either that the seller of the junk is the owner of it, or the name of the person he or she obtained it from, as shown on a signed transfer document. (6) Any person who makes, or causes to be made, any false or fictitious statement regarding any information required by this section, is guilty of a misdemeanor. (7) Every junk dealer and every recycler shall report the above information to the chief of police, if the dealer's or recycler's business is located in a city, or to the sheriff, if the dealer's or recycler's business is located in an unincorporated part of a county, upon request of the chief of police or sheriff and on a monthly basis, except: (8) The chief of police or sheriff may request the (More) AB 1971 (Buchanan) Page 5 report described in this section on a weekly basis if there is an ongoing investigation of the junk dealer or recycler concerning possible criminal activity. The chief of police or sheriff may request weekly reports for no more than a two-month period unless the investigation of the junk dealer or recycler continues and the chief of police or sheriff makes a subsequent request for weekly reports for an additional two-month period or part thereof. (Bus. & Prof. Code § 21606.) Existing law provides that any junk dealer or recycler who fails to keep the required written records, or who refuses, upon demand, as specified, to exhibit the required written record, or who destroys that record within two years after making the final entry of any purchase or sale of junk therein is guilty of a misdemeanor. (Bus. & Prof. Code § 21608 (a).) Violations are punishable as follows: (1) For a first offense, by a fine of not less than $500, or by imprisonment in the county jail for not less than 30 days, or both. (2) For a second offense, by a fine of not less than $1000, or by imprisonment in the county jail for not less than 30 days, or both. In addition to any other sentence imposed pursuant to this paragraph, the court may order the defendant to stop engaging in business as a junk dealer or recycler for a period not to exceed 30 days. (3) For a third or any subsequent offense, by a fine of not less than $2000, or by imprisonment in the county jail for not less than six months, or both. In addition to any other sentence imposed pursuant to this paragraph, the court shall order the defendant to stop engaging in business as a junk dealer or recycler for a period of 30 days. (Bus. & Prof. Code § 21608 (b).) (More) AB 1971 (Buchanan) Page 6 Existing law defines a "secondhand dealer" as any person or entity taking in pawn, accepting for sale of consignment, trading, et cetera, any tangible personal property. (Bus. & Prof. Code § 21625.) Existing law defines a pawnbroker as a "person engaged in the business of receiving goods in pledge for security for a loan." (Fin. Code § 21000.) Existing law provides that, except as specified, a junk dealer or recycler in this state shall not provide payment for nonferrous material unless, in addition to meeting the written record requirements of Sections 21605 and 21606, all of the following requirements are met: The payment for the material is made by cash or check. The check may be mailed to the seller at a verified address, as specified below, or the cash or check may be collected by the seller from the junk dealer or recycler on the third business day after the date of sale. At the time of sale, the junk dealer or recycler obtains a clear photograph or video of the seller. Except as provided below, the junk dealer or recycler obtains a copy of the valid driver's license of the seller containing a photograph and an address of the seller or a copy of a state or federal government-issued identification card containing a photograph and an address of the seller. (More) AB 1971 (Buchanan) Page 7 If the seller prefers to have the check for the material mailed to an alternative address other than a post office box, the junk dealer or recycler shall obtain a copy of a driver's license or identification card, as specified, and a gas or electric utility bill addressed to the seller at that alternative address with a payment due date no more than two months prior to the date of sale. For purposes of this paragraph, "alternative address" means an address that is different from the address appearing on the seller's driver's license or identification card. The junk dealer or recycler obtains a clear photograph or video of the nonferrous material being purchased. The junk dealer or recycler shall preserve the information obtained pursuant to this paragraph for a period of two years after the date of sale. The junk dealer or recycler obtains a thumbprint of the seller, as prescribed by the Department of Justice. The junk dealer or recycler shall keep this thumbprint with the information obtained under this subdivision and shall preserve the thumbprint in either hardcopy or electronic format for a period of two years after the date of sale. Inspection or seizure of the thumbprint shall only be performed by a peace officer acting within the scope of his or her authority in response to a (More) AB 1971 (Buchanan) Page 8 criminal search warrant signed by a magistrate and served on the junk dealer or recycler by the peace officer. Probable cause for the issuance of that warrant must be based upon a theft specifically involving the transaction for which the thumbprint was given. (Bus. & Prof. Code § 21608.5.) Existing law (subdivisions of Bus. & Prof. Code § 21628) provides that pawnbrokers and secondhand dealers shall report daily on forms approved or provided by the Department of Justice, all personal property purchased, taken in trade, taken in pawn, et cetera, to local law enforcement. The report shall include the following information: The name and current address and identification of the intended seller or pledgor of the property (subds. (a)-(b)); A complete and reasonably accurate description of serialized or nonserialized property (subds. (c)-(d)); A certification by the intended seller or pledgor that he or she is the owner of the property, or has the authority of the owner to sell or pledge the property and that any information provided is true and complete (subds. (e)-(f)); and A legible fingerprint taken from the intended seller or pledgor (subd. (g)). Existing law provides that the Department of Justice ("DOJ") shall, in consultation with local law enforcement, develop clear and comprehensive categories of property subject to reporting requirements in Business and Professions Code Section 21628. The categories shall be incorporated by secondhand dealers and coin dealers (Bus. & Prof. Code § 21626) for reporting requirements. DOJ and local law enforcement, in consultation with secondhand dealer and coin dealer representatives, shall develop a standard statewide format for electronic reporting. (More) AB 1971 (Buchanan) Page 9 Twelve months after the format and the categories have been developed, each secondhand dealer and coin dealer shall make reports electronically. Until that time, each secondhand dealer and coin dealer may either continue to report this information using existing forms and procedures or may begin electronically reporting this information under the reporting categories and using the new format when it has been developed. (Bus. & Prof. Code § 21628.) Existing law requires a secondhand dealer to make acquired property available for law enforcement inspection for specified time periods. (Bus. & Prof. Code § 21636.) This bill increases the maximum fine for junk and secondhand dealers who knowingly purchase metals used in transportation or public utility services without due diligence from $250 to $1,000. This bill clarifies that, for purposes of the vandalism statute, "damages" includes damage caused to public transit properties and facilities, public park properties and facilities, and public utilities and water properties and facilities. This bill makes various findings and declarations. RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION ("ROCA") In response to the unresolved prison capacity crisis, since early 2007 it has been the policy of the chair of the Senate Committee on Public Safety and the Senate President pro Tem to hold legislative proposals which could further aggravate prison overcrowding through new or expanded felony prosecutions. Under the resulting policy known as "ROCA" (which stands for "Receivership/Overcrowding Crisis Aggravation"), the Committee has held measures which create a new felony, expand the scope or penalty of an existing felony, or otherwise increase the application of a felony in a manner which could exacerbate the (More) AB 1971 (Buchanan) Page 10 prison overcrowding crisis by expanding the availability or length of prison terms (such as extending the statute of limitations for felonies or constricting statutory parole standards). In addition, proposed expansions to the classification of felonies enacted last year by AB 109 (the 2011 Public Safety Realignment) which may be punishable in jail and not prison (Penal Code section 1170(h)) would be subject to ROCA because an offender's criminal record could make the offender ineligible for jail and therefore subject to state prison. Under these principles, ROCA has been applied as a content-neutral, provisional measure necessary to ensure that the Legislature does not erode progress towards reducing prison overcrowding by passing legislation which could increase the prison population. ROCA will continue until prison overcrowding is resolved. For the last several years, severe overcrowding in California's prisons has been the focus of evolving and expensive litigation. On June 30, 2005, in a class action lawsuit filed four years earlier, the United States District Court for the Northern District of California established a Receivership to take control of the delivery of medical services to all California state prisoners confined by the California Department of Corrections and Rehabilitation ("CDCR"). In December of 2006, plaintiffs in two federal lawsuits against CDCR sought a court-ordered limit on the prison population pursuant to the federal Prison Litigation Reform Act. On January 12, 2010, a three-judge federal panel issued an order requiring California to reduce its inmate population to 137.5 percent of design capacity -- a reduction at that time of roughly 40,000 inmates -- within two years. The court stayed implementation of its ruling pending the state's appeal to the U.S. Supreme Court. On May 23, 2011, the United States Supreme Court upheld the decision of the three-judge panel in its entirety, giving California two years from the date of its ruling to reduce its prison population to 137.5 percent of design capacity, subject to the right of the state to seek modifications in appropriate circumstances. Design capacity is the number of inmates a (More) AB 1971 (Buchanan) Page 11 prison can house based on one inmate per cell, single-level bunks in dormitories, and no beds in places not designed for housing. Current design capacity in CDCR's 33 institutions is 79,650. On January 6, 2012, CDCR announced that California had cut prison overcrowding by more than 11,000 inmates over the last six months, a reduction largely accomplished by the passage of Assembly Bill 109. Under the prisoner-reduction order, the inmate population in California's 33 prisons must be no more than the following: 167 percent of design capacity by December 27, 2011 (133,016 inmates); 155 percent by June 27, 2012; 147 percent by December 27, 2012; and 137.5 percent by June 27, 2013. This bill does not aggravate the prison overcrowding crisis described above under ROCA. COMMENTS 1. Need for This Bill According to the Author: The demand for copper has been increasing globally and has thereby intensified thieves' efforts to obtain it. In 2001, scrap copper sold for 65 cents a pound. Copper now draws more than $4 a pound. And California's infrastructure is rich with copper. In California, thieves frequently strip the copper wire from signal lights, streetlamps, heating and air conditioning units, utility department transformers and public transit track. The loss of copper and damaged property is costing the taxpayers millions of (More) AB 1971 (Buchanan) Page 12 dollars. Copper theft has cost the City of Fremont over $460,000 in repairs, Bay Area Rapid Transit (BART) has been saddled with millions in damages and delays and the City of Sacramento Transportation Department has had to fund over $160,000 in copper-related repairs, which includes the repairs of more than 1,000 disabled street lamps. Current law tries to discourage copper theft by fining buyers of stolen copper. Without anyone to buy the stolen metal, thieves would be discouraged from taking it in the first place. To that end, the law currently imposes a fine for buyers of stolen nonferrous materials of up to $250. This $250 fine has not been adjusted since it was established in 1919. As an additional measure to discourage copper theft, AB 844 (Berryhill) from 2008, required junk dealers and recyclers to comply with recordkeeping requirements and payment restrictions when purchasing nonferrous materials. The minimum fine for failing to comply was set at $1,000. AB 1971 will bring the fine for purchasing stolen metal up to the same level as failing to keep proper records of metal sales. 2. Effect of the Bill Under existing law every junk dealer or secondhand dealer who buys or receives any wire, cable, copper, lead, solder, mercury, iron or brass which he or she knows or reasonably should know is ordinarily used by or ordinarily belongs to a railroad or other transportation, telephone, telegraph, gas, water or electric light company or county, city, city and county or other political subdivision of this state engaged in furnishing public utility service without using due diligence to ascertain that (More) AB 1971 (Buchanan) Page 13 the person selling or delivering the same has a legal right to do so, is guilty of criminally receiving that property, and is punishable by imprisonment in a county jail for not more than one year, or by imprisonment pursuant to subdivision (h) of Section 1170, or by a fine of not more than $250, or by both that fine and imprisonment. (More) This bill would increase the fine for that offense from $250 to $1,000. This bill would also clarify that, for purposes of the vandalism statute, "damages" includes damage caused to public transit properties and facilities, public park properties and facilities, and public utilities and water properties and facilities. This bill states that this is declaratory of existing law. 3. Previous Legislation to Curb Metal Theft Earlier this year, this Committee approved SB 1387 (Emmerson), which would prohibit junk dealers and recyclers from possessing any fire hydrant, fire department connection, manhole cover or backflow device without a written certification on the letterhead of the agency previously owning the material, and adds fire hydrants, manhole covers and backflow devices to the list of items which, if any person possesses, knowing they were stolen, would receive an additional fine of up to $3,000. (Penal Code § 496e.) In 2011 the Legislature created a separate offense of grand theft of copper material. (AB 316 (Carter), Chapter 317, Statutes of 2011.) In 2009, the Legislature passed the following measures to address the growing problem of metal theft: SB 447 (Maldonado), Chapter 732, Statutes of 2009, assists local law enforcement officials in quickly investigating stolen metal and apprehending thieves by requiring scrap metal dealers and recyclers to report what materials are being scraped at their facilities and by whom on a daily basis. These rules already apply to pawn shop dealers. SB 691 (Calderon), Chapter 720, Statutes of 2009, requires junk dealers and recyclers to take (More) AB 1971 (Buchanan) Page 15 thumbprints of individuals selling copper, copper alloys, aluminum, and stainless steel. Sellers must also show a government identification (ID) and proof of their current address. Recyclers who violate the law face suspension or revocation of their business license and increased fines and jail time. AB 844 (Berryhill), Chapter 731, Statutes of 2009, requires recyclers to hold payment for three days, check a photo ID and take a thumbprint of anyone selling scrap metals. AB 844 also requires any person convicted of metal theft to pay restitution for the materials stolen and for any collateral damage caused during the theft. 4. Argument in Support The Santa Clara Valley Transportation Authority states: Since 2008, a series of bills have been enacted at the state level to combat metal theft generally. These measures have focused on placing reporting requirements on junk dealers and recyclers comparable to those that exist for pawnbrokers and secondhand dealers, and on enhancing certain fines and other penalties for metal theft. However, the recent rise in scrap metal values has made the theft and sale of these materials increasingly profitable and, therefore, metal theft continues to be a problem. AB 1971 will address an inconsistency in the fine pertaining to certain acts undertaken by a buyer of copper, and will ensure that copper wiring theft resulting in damage to the property and facilities of public transit agencies, as well as to certain other public property and facilities, can be prosecuted as vandalism. *************** AB 1971 (Buchanan) Page 16