BILL ANALYSIS Ó SENATE COMMITTEE ON PUBLIC SAFETY Senator Loni Hancock, Chair S 2011-2012 Regular Session B 1 3 8 SB 1387 (Emmerson) 7 As Amended April 19, 2012 Hearing date: April 24, 2012 Business & Prof., Penal Codes SM:mc METAL THEFT HISTORY Source: Eastern Municipal Water District Prior Legislation: AB 316 (Carter) - Chapter 317, Statutes of 2011 AB 2372 (Ammiano) - Chapter 693, Statutes of 2010 AB 237 (Carter) - failed passage in Senate Public Safety, 2009 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) - failed passage in Senate Public Safety, 2008 Support: Association of California Water Agencies; California Association of Sanitation Agencies; California Chamber of Commerce; California District Attorneys Association; California Municipal Utilities Association; California Special Districts Association; California State Sheriffs' Association; Cathedral City; City of Canyon Lake; City of San Jacinto; East (More) SB 1387 (Emmerson) Page 2 Bay Municipal Utility District; Elsinore Valley Municipal Water District; Lake Hemet Municipal Water District; League of California Cities; San Bernardino County Sheriff; Three Valleys Municipal Water District; Rancho California Water District; Walnut Valley Water District; Western Municipal Water District; Western Riverside Council of Governments Opposition:None known KEY ISSUES SHOULD JUNK DEALERS AND RECYCLERS BE PROHIBITED FROM POSSESSING FIRE HYDRANTS, MANHOLE COVERS OR BACKFLOW DEVICES WITHOUT PROPER CERTIFICATION, AS SPECIFIED? SHOULD POSSESSION OF STOLEN FIRE HYDRANTS, MANHOLE COVERS OR BACKFLOW DEVICES BE PUNISHABLE BY AN ADDITIONAL FINE? PURPOSE The purpose of this bill is to (1) make specified findings and declarations; (2) prohibit junk dealers and recyclers from possessing fire hydrants, manhole covers or backflow devices without proper certification, as specified; and (3) provide that possession of stolen fire hydrants, manhole covers or backflow devices by persons engaged in the salvage, recycling, purchase or sale of scrap metal, shall be punishable by an additional fine. Existing law provides that theft in any of the following cases is grand theft: (More) SB 1387 (Emmerson) Page 3 When the money, labor, or real or personal property taken is of a value exceeding nine hundred fifty dollars ($950); When domestic fowls, avocados, olives, citrus or deciduous fruits, other fruits, vegetables, nuts, artichokes, or other farm crops are taken of a value exceeding two hundred fifty dollars ($250); When fish, shellfish, mollusks, crustaceans, kelp, algae, or other aquacultural products are taken from a commercial or research operation which is producing that product, of a value exceeding two hundred fifty dollars ($250); Where the money, labor, or real or personal property is taken by a servant, agent, or employee from his or her principal or employer and aggregates nine hundred fifty dollars ($950) or more in any 12 consecutive month period; When the property is taken from the person of another; When the property taken is an automobile, horse, mare, gelding, any bovine animal, any caprine animal, mule, jack, jenny, sheep, lamb, hog, sow, boar, gilt, barrow, or pig; Theft of a firearm. (Penal Code § 487.) Existing law provides that grand theft is punishable as follows: When the grand theft involves the theft of a firearm, by imprisonment in the state prison for 16 months, 2, or 3 years. In all other cases, by imprisonment in a county jail not exceeding one year or in the state prison for 16 months, 2, or 3 years. (Penal Code § 489.) Existing law provides that every junk dealer and every recycler, as defined, in this state is hereby 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: (1) The place and date of each sale or purchase of junk made in the conduct of his or her business as (More) SB 1387 (Emmerson) Page 4 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 report described in this section on a weekly basis if there is an ongoing investigation of the junk dealer (More) SB 1387 (Emmerson) Page 5 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).) Existing law defines a "secondhand dealer" as any person or entity taking in pawn, accepting for sale of consignment, (More) SB 1387 (Emmerson) Page 6 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. 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 (More) SB 1387 (Emmerson) Page 7 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 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 (More) SB 1387 (Emmerson) Page 8 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. 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.) 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 (More) SB 1387 (Emmerson) Page 9 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 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 provides that any person who buys or receives, for purposes of salvage, any part of a fire hydrant or fire department connection, including, but not limited to, bronze or brass fittings and parts, that has been stolen or obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, shall, in addition to any other penalty provided by law, be subject to a criminal fine of not more than $3,000. (Penal Code § 496e.) This bill would provide that no junk dealer or recycler shall possess any fire hydrant, or fire department connection, including, but not limited to, brass fittings and parts, or manhole cover or lid or part of that cover or lid, or backflow device or connection to that device or part of that device in (More) SB 1387 (Emmerson) Page 10 the absence of a written certification on the letterhead of the agency or utility owning or previously owning the material described in the certification that the agency has either sold the material described or is offering the material for sale, salvage, or recycling, and that the person possessing the certification and identified in the certification is authorized to negotiate the sale of that material. This bill would recast the provisions of section 496e, detailed above, dealing with receiving stolen fire hydrants, etc., and add to the items covered under that statute manhole covers or lids, or any part of those covers and lids and backflow devices and connections to that device, or any part of that device. 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 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 (More) SB 1387 (Emmerson) Page 11 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 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: (More) SB 1387 (Emmerson) Page 12 (More) 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: Metal theft is on the rise as the price of metal continues to climb. The theft of metals has devastated both public and private property and has harmed critical public infrastructure, making it difficult to deliver essential utilities to customers. Moreover, the theft of certain metal devices can seriously threaten public health and safety. For instance, individuals have been severely injured falling down uncovered manholes and vehicles have incurred damage driving over manholes where the covers have been stolen. In addition, stolen backflow devices leave potable water sources vulnerable to cross-contamination while stolen fire hydrants render properties defenseless to fire. While several laws have been enacted to curb metal theft, it is still prevalent throughout California. SB 1387 seeks to address this metal theft epidemic and strengthen current law. Specifically, this bill would prohibit a junk dealer or recycler from possessing manhole covers, backflow devices, and fire hydrants without written certification on the letterhead of the agency or utility that owns or previously owned the material. (More) SB 1387 (Emmerson) Page 14 The lack of written certification gives rise to a presumption that the property was stolen. As a result, this bill would relieve junk dealers or recyclers from the responsibility of determining whether or not any of the three items in question are stolen since they will no longer be eligible for recycling without an appropriate certification. Failure to comply with this provision would result in a criminal fine of up to $3,000 for stealing either a manhole cover or backflow device, similar to current law for stealing a fire hydrant. SB 1387 would eliminate the attractiveness of manhole covers, backflow devices, and fire hydrants to metal thieves as there would no longer be a buyer for these stolen items. 2. What this Bill Would Do This bill 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, which states that the agency has sold the material or is offering it for salvage or recycling and the person possessing the certificate is authorized to negotiate the sale of that material. A failure on the part of junk dealers and recyclers to keep any of the records required of them is punishable as a misdemeanor, as detailed in the 'existing law' section above. (Bus. & Prof. Code § 21608.) In addition, this bill 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.) 3. Previous Legislation to Curb Metal Theft In 2009, the Legislature passed the following measures to address the growing problem of metal theft: SB 1387 (Emmerson) Page 15 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 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. ***************