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