BILL ANALYSIS �
AB 841
Page 1
Date of Hearing: April 16, 2013
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Richard S. Gordon, Chair
AB 841 (Torres) - As Amended: April 10, 2013
SUBJECT : Junk dealers and recyclers: nonferrous materials:
payment.
SUMMARY : Requires a junk dealer or recycler to pay a seller of
nonferrous materials by mailed check only, and prohibits sellers
from picking up a cash or check payment in person.
Specifically, this bill :
1)Prohibits a junk dealer or recycler from paying cash to a
seller for nonferrous metals.
2)Prohibits a junk dealer or recycler from allowing a seller to
pick up cash or check payment on or after the third business
day, as specified.
EXISTING LAW
1)Defines "junk" as secondhand and used machinery and all
ferrous and nonferrous scrap metals and alloys including any
and all secondhand and used furniture, pallets, or other
personal property, other than livestock. (Business and
Professions Code (BPC) Section 21600)
2)Defines a "junk dealer" as anyone engaged in the business of
buying, selling and dealing in junk; any person purchasing,
gathering, collecting or soliciting or procuring junk; or, any
person operating, carrying on, conducting or maintaining a
junk yard. (BPC 21601)
3)Requires every junk dealer and every recycler to keep a
written record of all sales and purchases made in the course
of his or her business. The written record shall include:
a) The place and date of each sale or purchase of junk made
in the conduct of his or her business;
b) The name, valid driver's license number and state of
issue or California issued identification card number;
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c) The name, identification number of a Matricula Consular
or passport and the address from an additional item of
identification that also bears the seller's name;
d) The 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;
e) 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;
f) A description of the item or items of junk purchased or
sold, including the item type and quantity, and
identification number, if visible; and,
g) 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 the junk from, as shown on a signed transfer
document. (BPC 21606)
4)Requires junk dealers and recyclers to allow for periodic
inspection of any premise maintained and any junk to determine
compliance with record keeping requirements, and requires junk
dealers and recyclers to produce his or her records of sales
and purchases for inspection by any of the following:
a) An officer holding a warrant;
b) A person appointed by the sheriff of a county or
appointed by the head of the police department of a city;
and,
c) An officer holding a court order directing them to
examine the records or property. (BPC 21606.5)
5)Requires every junk dealer and recycler to preserve a written
record as specified for at least two years after making the
final entry of any purchase or sale of junk or scrap as
defined. (BPC 21607)
6)Provides that a junk dealer or recycler who fails to keep the
written record required is guilty of a misdemeanor. (BPC
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21608)
7)Prohibits junk dealers and recyclers from providing payments
for nonferrous materials unless specified conditions are met.
(BPC 21608.5)
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of this bill . This bill will require a payment for
nonferrous scrap metal purchased by a junk dealer or recycler
to be a check only and be mailed directly to the seller as
opposed to the current payment method which allows a seller to
pick up cash or check payment from the junk dealer or recycler
after the third business day. This bill is author sponsored.
2)Author's statement . According to the author, "The copper
crime wave continues to be a problem not only in California,
but across the nation. According to a report from the
National Insurance Crime Bureau (NICB), thefts of copper and
other metals have increased [because of] rising prices for the
stolen recyclables. A total of 25,083 theft claims of copper,
bronze, brass and aluminum were submitted in the three years
ending December 31, 2011. Ninety-six percent of the thefts
were copper. California ranks 4th in the nation generating
the most metal theft insurance claims with 1,348. The theft
of metal from homes, utilities and public areas has negative
effects on families, public safety, business and agriculture.
AB 841 assists law enforcement in catching copper thieves by
requiring recyclers to issue check payments for metal
recycling."
3)Metal theft . Metal theft continues to be a problem in
California. The Riverside Press Enterprise reported on March
10, 2013 that "metal thieves are hitting inland freeways
hard-often during the day-and occasionally making off with
surprisingly large items from construction sites?in another
case, a freeway light pole, which was knocked down in a crash,
was stolen before workers could repair it."
In another article from the Riverside Press Enterprise, it
reported that in "Corona, like other cities, private
residences and businesses have been hit hard by metal thieves.
Scrap yards will pay almost 3 dollars for non-insulated
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copper wire and almost 2 dollars per pound for insulated
copper wire." The Federal Bureau of Investigation reported in
2008 numerous instances of copper theft causing significant
damage to important safety equipment such as tornado sirens in
Mississippi and transformers in Florida that caused electrical
outages.
The NICB released a report in 2009 regarding metal theft which
reported that "thieves seem willing to go to any length to
obtain the metal, which they can then sell to scrap dealers.
Thieves have stripped sheets of metal from building rooftops,
stolen memorial decorations from cemeteries, ripped apart air
conditioners for the copper coils within, and stripped homes
and buildings of wiring and piping. Frequently, the damage
caused by such thefts is several times the value of the metal
stolen?Thieves have removed wiring from traffic and railway
signals and even posed as utility workers in order to remove
large sections of thick utility cable from the sewers beneath
city streets. Several thieves have been electrocuted trying
to steal live electrical wiring." (Metal Theft Claims from
January 2006 to November 2008, February 13, 2009, National
Insurance Crime Bureau).
4)Scrap industry . According to the Institute of Scrap Recycling
Industries, Inc., (ISRI) nonferrous (or not iron-based) metals
are among the few materials that do not degrade or lose their
chemical or physical properties in the recycling process.
Because of this, these metals have the capacity to be recycled
a nearly infinite number of times. Nonferrous materials
include copper, copper alloys, stainless steel, or aluminum
(but not beverage containers, as specified in the California
Public Resources Code). In the United States, the value of
the nonferrous scrap industry jumped to nearly $40 billion in
2010, which was an increase of 28% from 2009. In terms of
volume, it has been reported that nonferrous scrap materials
make up a small percentage of the total quantity of material
recycled in the United States (U.S.)., but by value it
accounts for more than half of the total earnings of the scrap
recycling industry. In 2010, the U.S. exported $16.7 billion
worth of nonferrous scrap to nearly 100 countries.
5)Current scrap recycling requirements . AB 844 (Berryhill),
Chapter 731, Statutes of 2008, imposed additional
recordkeeping requirements and payment restrictions on junk
dealers and recyclers when purchasing nonferrous materials.
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Junk dealers and recyclers are now prohibited from buying
nonferrous materials unless the buyer obtains a copy of the
seller's driver's license, a photo or video of the material
being purchased, and a thumbprint of the seller.
Additionally, payment is restricted to a check mailed to the
seller or to a cash or check payment that can be collected by
the seller three days after the date of sale. Junk dealers
and recyclers are also required to follow strict guidelines
regarding the retention of records, payment for materials, the
photography or video of items being purchased, and the
collection of identification and thumbprints of sellers, among
others.
However, certain exemptions do exist. Under current law, if a
seller does routine business with a junk dealer or recycler
(i.e., five separate transactions on five or more separate
days a month with the same junk dealer or recycler for three
separate months), the check by mail only payment requirement
as specified in this bill will not apply. Additionally, if a
seller has an established relationship with a junk dealer or
recycler and has provided the name, physical business address,
and business telephone number of the seller's business,
business license number or tax identification number and a
copy of the driver's license of the person delivering the
nonferrous material on behalf of the seller, he or she will be
exempt from the check by mail only payment requirement, among
other provisions.
6)Illegal scrap yards . In the August 2012 Los Angeles Times
article, Illegal Scrap Yards in California a Burgeoning
Problem, highlighted the problem of "rogue" or non-legitimate
scrap yards which were popping up around the Los Angeles area.
These businesses do not necessarily fill out the required
transaction reports, and are therefore an easy place to sell
stolen or misappropriated nonferrous metal materials. In
addition to the increasing number of illegal scrap yards, the
article noted that there are limited law enforcement resources
available to prosecute such efforts.
This bill attempts to address the problem of individuals who
do not have a legitimate business relationship and may bring
stolen metal to junk dealers or recyclers for a quick payment.
7)Questions for the Committee . Given the potential inefficiency
involved in issuing mailed checks for very small amounts (say,
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under $20), the Committee may wish to inquire of the author as
to how many non-exempt sales are for very small amounts, and
whether or not it might be appropriate to permit cash payments
in cases where the payment is very small.
8)Arguments in support . The Association of California Water
Agencies (ACWA) writes in support, "Metal theft has quickly
become a severe drain on many water district budgets. Many
times criminals may steal material that only garners a small
amount of money but the damage that the theft creates costs
our public agencies thousands of dollars to repair. For this
reason, ACWA supports [this bill]."
9)Arguments in opposition . The West Coast Chapters of the
Institute of Scrap Recycling Industries (ISRI) writes in
opposition, "[T]his bill would undo an important provision of
the metal theft statute. Specifically, it would eliminate the
ability of customers?to return to the recycler to receive
payment by check or cash. Also, there are many customers who
do not have checking accounts and without being able to
receive cash, this proposed change in law could subject them
to the enormous check cashing fees administered by banks and
check cashing companies."
10)Related legislation . AB 801 (Brown) of 2013 would require
junk dealers and recyclers to obtain specified information
before providing payment for nonferrous materials marked with
an indicia of ownership, as defined, and would further require
that this information be retained as part of the written
record of purchases. That bill is currently pending in the
Assembly Business, Professions and Consumer Protection
Committee.
AB 909 (Gray) of 2013 would require the Board of State and
Community Corrections to establish a Metal Theft Task Force
Program to provide grants to applicant regional task forces
for the purpose of providing local law enforcement and
district attorneys with the tools necessary to successfully
interdict the commission of metal theft and related metal
recycling crimes. That bill is pending in the Assembly Public
Safety Committee.
SB 485 (Ron Calderon) of 2013 would require a sealer who is
responding to a request concerning the weights, measures, or
weighing or measuring instruments of a junk dealer or recycler
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to also inspect the sales and purchase records of the junk
dealer or recycler to ensure compliance with the recordkeeping
and reporting requirements. The bill would also require a
sealer to cite a junk dealer or recycler who is in violation
of those recordkeeping or reporting requirements. That bill
is currently pending in the Senate Business, Professions and
Economic Development Committee.
11)Previous legislation . AB 2003 (Torres) of 2012 would have
required junk dealers and recyclers to provide payment to
sellers of nonferrous material by mailed check only, as
specified. That bill was held in the Senate Business,
Professions and Economic Development Committee.
AB 1387 (Emmerson), Chapter 656, Statutes of 2012, prohibited
a junk dealer or recycler from possessing fire hydrants,
manhole covers or backflow devices unless specified provisions
are met.
SB 1045 (Emmerson), Chapter 393, Statutes of 2012, imposed
civil liability upon junk dealers and recyclers for the
possession of specified metal fixtures owned by a public
agency.
AB 1508 (Carter), Chapter 531, Statutes of 2012, revised the
exemption on the sale of nonferrous materials with a value
under $20 from certain payment restrictions by requiring the
majority of the transaction be for the redemption of beverage
containers, and prohibited the redemption of materials made of
copper or copper alloys, as specified.
AB 316 (Carter), Chapter 317, Statutes of 2011, created a
separate code section for grand theft of copper materials and
added a fine of up to $2,500 in addition to existing
penalties.
AB 1859 (Adams), Chapter 659, Statutes of 2008, established
that any person who buys or receives, for purposes of salvage,
any part of a fire hydrant or fire department connection that
has been stolen, knowing the property to be so stolen, to be
subject to a criminal fine of not more than $3000.
AB 844 (Berryhill), Chapter 731, Statutes of 2008, required
junk dealers and recyclers to comply with recordkeeping
requirements and new payment restrictions when purchasing
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nonferrous materials.
SB 691 (Ron Calderon), Chapter 730, Statutes of 2008, required
junk dealers and recyclers to comply with additional
recordkeeping requirements and new payment restrictions when
purchasing nonferrous materials.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Water Agencies
AT&T
California District Attorneys Association
California Farm Bureau Federation
Friant Water Authority
San Bernardino County Sheriff's Department
Opposition
West Coast Chapters of the Institute of Scrap Recycling
Industries
Analysis Prepared by : Elissa Silva / B.,P. & C.P. / (916)
319-3301