BILL ANALYSIS                                                                                                                                                                                                    Ó







                      SENATE COMMITTEE ON PUBLIC SAFETY
                            Senator Loni Hancock, Chair              S
                             2011-2012 Regular Session               B

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          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 




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                    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:





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                 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 




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               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 




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               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, 




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          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 




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               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 




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               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 




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          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 




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          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 




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          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:




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                 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.  




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               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:











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                 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. 


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