BILL ANALYSIS Ó SENATE COMMITTEE ON PUBLIC SAFETY Senator Loni Hancock, Chair A 2013-2014 Regular Session B 2 3 1 AB 2312 (Nestande) 2 As Amended April 10, 2014 Hearing date: June 24, 2014 Business and Professions; Penal Codes JM:mc METAL THEFT ALERT SYSTEM HISTORY Source: Institute of Scrap Recycling Industry Prior Legislation: SB 485 (Calderon) - Chapter 518, Statues of 2013 AB 841 (Torres) - vetoed by the Governor, 2013 AB 909 (Gray) - vetoed by the Governor, 2013 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: Allied Riverside County Chiefs of Police and Sheriff; Association of California Recycling Industries; Association of California Water Agencies; Blythe Police Department; California Farm Bureau Federation; California Municipal Utilities Association; California (More) AB 2312 (Nestande) Page 2 Police Chiefs Association; California State Sheriffs' Association; California Women for Agriculture; Californians Against Waste; City of Beaumont; City of Indio Police Department; City of Rancho Mirage; City of Salinas; Coachella Valley Association of Governments; Coachella Valley Economic Partnership; Coachella Valley Water District; Desert Fresh, Inc.; Desert Sands Unified School District; Desert Valley Builders Association; Eastern Municipal Water District; Fresno Metropolitan Flood Control District; General Patton Memorial Museum; Indio Chamber of Commerce; Mayor of San Jacinto; Metropolitan Water District of Southern California; Patton Memorial Museum Board of Directors; Riverside County Board of Supervisors; Riverside County Chiefs of Police and Sheriffs; Schintzer Steel Industries; Western Electrical Contractors Association; Plumbing-Heating-Cooling Contractors Association of California; Associated Builders and Contractors-San Diego Chapter; Air Conditioning Trade Association Opposition:None known Assembly Floor Vote: Ayes 73 - Noes 0 KEY ISSUES SHOULD A JUNK DEALER OR RECYCLER BE REQUIRED TO 1) REQUEST METAL THEFT ALERT NOTIFICATIONS FROM A WEB-BASED THEFT ALERT SYSTEM AND 2) PROVIDE PROOF OF THE REQUEST TO THE CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE WHEN APPLYING FOR A WEIGHMASTER LICENSE? SHOULD LOCAL LAW ENFORCEMENT BE ENCOURAGED TO REPORT METAL THEFTS THROUGH A WEB-BASED THEFT ALERT SYSTEM? PURPOSE (More) AB 2312 (Nestande) Page 3 The purpose of this bill is to assist in coordinating local responses to metal thefts by 1) requiring junk dealers and recyclers to request metal theft alert notifications from an industry-run web-based theft alert system; 2) requiring junk dealers and recyclers to provide proof of the request for metal theft notifications to the California Department of Food and Agriculture when applying for a weighmaster license; and 3) encouraging local law enforcement to report metal thefts through the web-based theft alert system. Existing law provides that theft in any of the following cases is grand theft: 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, specified fruits, vegetables, nuts, artichokes, or other farm crops are taken of a value exceeding two hundred fifty dollars ($250); When specified fish or 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 labor or property is taken by an 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, or specified livestock; or 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 a prison term of16 months, 2, or 3 years. In all other cases, by imprisonment in a county jail not exceeding one year or as a jail felony for 16 months, 2, or 3 years pursuant to Penal Code Section 1170 (h). (Penal Code § (More) AB 2312 (Nestande) Page 4 489.) Existing law provides that every person who buys or receives any property that has been stolen or obtained by theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, any property from the owner, knowing the property to be so stolen or obtained, shall be punished by imprisonment in a county jail pursuant to Penal Code Section 1170, subdivision (h), or in a county jail for not more than one year. However, if the value of the property does not exceed four hundred dollars ($400), the prosecutor may charge the offense as a misdemeanor. A principal in the actual theft may be convicted of receiving stolen property, but not convicted of both offenses. (Pen. Code § 496, subd. (a).) Existing law provides that any attempt to receive stolen property is an alternate felony-misdemeanor punishable by imprisonment as a jail felony pursuant to Section 1170, subdivision (h), or in a county jail for not more than one year. (Pen. Code § 496.) Existing law states that the definition of "junk dealer" includes any person engaged in the business of buying, selling and dealing in junk, any person purchasing, gathering, collecting, soliciting or traveling about from place to place procuring junk, and any person operating, carrying on, conducting or maintaining a junk yard or place where junk is gathered together and stored or kept for shipment, sale or transfer. (Bus. & Prof. Code § 21601.) 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 a junk dealer or recycler. (More) AB 2312 (Nestande) Page 5 (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. (Bus. & Prof. Code § 21606.) Existing law vests the California Department of Food and Agriculture (DFA) with general supervision of weights and measures and weighing and measuring devices sold or used in the state. (Bus. & Prof. Code § 12700, et seq.) Existing law provides for the enforcement of the weights and measures laws and the inspection and testing of measuring devices, in each county, by the county sealer. (Bus. & Prof. Code §§ 12100 et seq.; 12200 et seq.) Existing law defines a "weighmaster" as any person, who, for hire or otherwise, weighs, measures, or counts any commodity and (More) AB 2312 (Nestande) Page 6 issues a statement or memorandum of the weight, measure, or count which is used as the basis for either the purchase or sale of that commodity or charge for service. (Bus. & Prof. Code § 12700.) Existing law requires a weighmaster to obtain a license and to pay a license fee, as prescribed. (Bus. & Prof. Code §§ 12703; 12704.) Existing law requires the DFA to require a recycler or junk dealer, as defined, who applies for or renews a weighmaster license to furnish the following information on the application: (Bus. & Prof. Code § 12703.1) A copy of the current business license. A statement that the applicant has filed an application for a storm water permit or is not required to obtain a storm water permit. A statement that the applicant has the equipment to meet the photographic and thumbprinting requirements for the purchase and sale of nonferrous materials or a statement that the applicant will not be purchasing or selling nonferrous materials. The names of any deputy weighmasters. This bill requires the DFA to require a recycler or junk dealer who applies for or renews a weighmaster license to additionally include a statement indicating that the applicant has requested to receive theft alert notifications, as specified. This bill requires a junk dealer or recycler to request to receive theft alert notifications regarding the theft of commodity metals, including, ferrous metal, copper, brass, aluminum, nickel, stainless steel, and alloys, in the junk dealer's or recycler's geographic region from the theft alert system maintained by the Institute of Scrap Recycling Industries (ISRI), or its successor. This bill encourages law enforcement agencies to report thefts (More) AB 2312 (Nestande) Page 7 of commodity metals, including, ferrous metal, copper, brass, aluminum, nickel, stainless steel, and alloys that have occurred within their jurisdiction to the theft alert system maintained by ISRI, or its successor, in order to ensure that persons using that system receive timely and thorough information regarding metal thefts. This bill provides that ISRI or its successor shall not require payment for the use of the theft alert system by law enforcement agencies or members of the public, and shall not sell subscribers' information to third parties. This bill includes legislative findings and declarations, as specified. RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION For the last several years, severe overcrowding in California's prisons has been the focus of evolving and expensive litigation relating to conditions of confinement. On May 23, 2011, the United States Supreme Court ordered California to reduce its prison population to 137.5 percent of design capacity within two years from the date of its ruling, subject to the right of the state to seek modifications in appropriate circumstances. Beginning in early 2007, Senate leadership initiated a policy to hold legislative proposals which could further aggravate the prison overcrowding crisis through new or expanded felony prosecutions. Under the resulting policy, known as "ROCA" (which stands for "Receivership/ Overcrowding Crisis Aggravation"), the Committee held measures that created a new felony, expanded the scope or penalty of an existing felony, or otherwise increased the application of a felony in a manner which could exacerbate the prison overcrowding crisis. Under these principles, ROCA was applied as a content-neutral, provisional measure necessary to ensure that the Legislature did not erode progress towards reducing prison overcrowding by passing legislation, which would increase the prison population. (More) AB 2312 (Nestande) Page 8 In January of 2013, just over a year after the enactment of the historic Public Safety Realignment Act of 2011, the State of California filed court documents seeking to vacate or modify the federal court order requiring the state to reduce its prison population to 137.5 percent of design capacity. The State submitted that the, ". . . population in the State's 33 prisons has been reduced by over 24,000 inmates since October 2011 when public safety realignment went into effect, by more than 36,000 inmates compared to the 2008 population . . . , and by nearly 42,000 inmates since 2006 . . . ." Plaintiffs opposed the state's motion, arguing that, "California prisons, which currently average 150% of capacity, and reach as high as 185% of capacity at one prison, continue to deliver health care that is constitutionally deficient." In an order dated January 29, 2013, the federal court granted the state a six-month extension to achieve the 137.5 % inmate population cap by December 31, 2013. The Three-Judge Court then ordered, on April 11, 2013, the state of California to "immediately take all steps necessary to comply with this Court's . . . Order . . . requiring defendants to reduce overall prison population to 137.5% design capacity by December 31, 2013." On September 16, 2013, the State asked the Court to extend that deadline to December 31, 2016. In response, the Court extended the deadline first to January 27, 2014, and then February 24, 2014, and ordered the parties to enter into a meet-and-confer process to "explore how defendants can comply with this Court's June 20, 2013, Order, including means and dates by which such compliance can be expedited or accomplished and how this Court can ensure a durable solution to the prison crowding problem." The parties were not able to reach an agreement during the meet-and-confer process. As a result, the Court ordered briefing on the State's requested extension and, on February 10, 2014, issued an order extending the deadline to reduce the in-state adult institution population to 137.5% design capacity to February 28, 2016. The order requires the state to meet the (More) AB 2312 (Nestande) Page 9 following interim and final population reduction benchmarks: 143% of design bed capacity by June 30, 2014; 141.5% of design bed capacity by February 28, 2015; and, 137.5% of design bed capacity by February 28, 2016. If a benchmark is missed the Compliance Officer (a position created by the February 10, 2016 order) can order the release of inmates to bring the State into compliance with that benchmark. In a status report to the Court dated May 15, 2014, the state reported that as of May 14, 2014, 116,428 inmates were housed in the State's 34 adult institutions, which amounts to 140.8% of design bed capacity, and 8,650 inmates were housed in out-of-state facilities. The ongoing prison overcrowding litigation indicates that prison capacity and related issues concerning conditions of confinement remain unresolved. While real gains in reducing the prison population have been made, even greater reductions may be required to meet the orders of the federal court. Therefore, the Committee's consideration of ROCA bills -bills that may impact the prison population - will be informed by the following questions: Whether a measure erodes realignment and impacts the prison population; Whether a measure addresses a crime which is directly dangerous to the physical safety of others for which there is no other reasonably appropriate sanction; Whether a bill corrects a constitutional infirmity or legislative drafting error; Whether a measure proposes penalties which are proportionate, and cannot be achieved through any other reasonably appropriate remedy; and, Whether a bill addresses a major area of public safety or criminal activity for which there is no other reasonable, appropriate remedy. (More) AB 2312 (Nestande) Page 10 COMMENTS 1. Need for this Bill According to the author: This bill would require all scrap metal recycling centers in California to subscribe and receive reports of metal thefts in their region from the ISRI metal theft alert system which is free of charge to subscribers and law enforcement. This bill will also encourage local law enforcement agencies to report crimes to the ISRI database so recycling centers can be made aware of them. The ISRI reporting system operates by law enforcement officials submitting a report to their online database with a description of the stolen items and the date and location from where they were stolen. Once that report is submitted, ISRI sends an alert to recycling centers within a 100 mile radius of where the theft occurred. Currently, recyclers are not required to subscribe to any alert system allowing for the potential of stolen items to go unnoticed. Since many scrap metal recycling centers are not aware of potential stolen items, they unwittingly help provide a market for the thieves to sell stolen property. Providing this market for stolen goods provides easy cash to thieves and a strong incentive for future thefts. These incentives have caused metal theft to continue to grow in California and costs families, businesses, and government agencies up to thousands of dollars to repair the damage caused by each theft. 2. The Ongoing Problem of Metal Theft Metal theft continues to be a serious problem in California. In addition to the loss of property, repairing the damage from (More) AB 2312 (Nestande) Page 11 metal theft can also be costly. For example, Fresno's ABC-7 television news on November 2013, reported a registered California historic landmark memorial was stolen from the Pinedale Remembrance Plaza. The 20 pounds of brass from the stolen memorial was worth approximately $50 at a recycling facility, but it will cost an estimated $5000 to replace. The Desert Sun reported on February 14, 2014 that less than two months into 2014, the Coachella Valley Water District is on its way to losing more equipment to metal thieves this year than it did in 2013. The National Insurance Crime Bureau (NICB) released a report in 2013 regarding metal theft which reported, "thieves have been willing to go to almost any length to obtain the metal. They 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 ? The thieves can endanger the safety of themselves and those in the surrounding community, and weaken the infrastructure vital to our everyday lives. Unoccupied buildings have exploded due to gas lines being stolen, stretches of highway have been left dark after thieves stole wiring from utility poles, and tornado warning sirens have been rendered inoperable due to wiring being stolen? Regardless of the motive, the damage caused by such thefts is often several times the value of the metal stolen, leaving the victims with hefty repair costs which are then often passed on to insurance companies." (Metal Theft Claims and Questionable Claim Referrals from January 1, 2010 to December 31, 2012, April 19, 2013, NICB). 3. The Growing Nonferrous Metal Recycling Industry According to the Institute of Scrap Recycling Industry (ISRI), nonferrous (non 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 an infinite number of (More) AB 2312 (Nestande) Page 12 times. Nonferrous materials include copper, copper alloys, stainless steel, or aluminum (excluding beverage containers, as defined in the California Public Resources Code). In the United States, the value of the nonferrous scrap industry approached $50 billion in 2012. In terms of volume, nonferrous scrap materials make up a small percentage of the total quantity of material recycled in the United States, but by value they account for more than half of the total earnings of the scrap recycling industry. In 2012, the U.S. exported nearly $14 billion worth of nonferrous scrap to more than 90 countries. 4. Theft Alert Notifications ScrapTheftAlert.com is a free tool for junk dealers and recyclers, law enforcement, and other local agencies to allow an individual to alert others in the scrap industry of significant thefts of materials within the United States and Canada. Alerts posted by individuals are broadcast by email to all subscribed users within a 100 mile radius of where the incident occurred, and depending on the incident, that radius can be increased. Once an alert has been broadcast, it can be in the recipient's email inbox in minutes. ScrapTheftAlert.com currently has 524 active users in California and has issued 246 active alerts. Nationwide, the Web site has over 17,000 total users and has helped recover over one million dollars of stolen material. ScrapTheftAlert.com is maintained by ISRI and there is no separate cost for users because ISRI members pay for the operation of the Web site. This bill requires junk dealers and recyclers to request to receive theft alert email notifications, and junk dealers and recyclers seeking a weighmasters license must provide a statement in their application that they have registered to receive email alerts from the theft alert system as a condition for licensure. This bill also provides that ISRI or its (More) AB 2312 (Nestande) Page 13 successor will not charge a fee for the use of the theft system and is not permitted to sell subscribers' information to third parties. 5. Related Legislation SB 485 (Calderon, Chapter 518, Statutes of 2013) requires a junk dealer or recycler to submit additional information regarding its junk dealer business to DFA when applying for a weighmaster's license or a renewal license, requires the DFA to complete an investigation of the information on the application or renewal within a specified period of time and revoke the license if the information submitted in the application or renewal is materially inaccurate, increases the fees that junk dealers or recyclers pay for each fixed location, and sunsets those provisions on January 1, 2019. AB 841 (Torres, 2013) would have required junk dealers and recyclers to provide payment to sellers of nonferrous material by mailed check only, as specified. ( Status : AB 841 was vetoed by the Governor.) AB 909 (Gray, 2013) would have required the Board of State and Community Corrections to establish the Metal Theft Task Force Program to provide, evaluate and monitor grants disbursed to enhance the capacity of local law enforcement and prosecutors to deter, investigate, and prosecute metal theft and related metal theft crimes. ( Status : AB 909 was vetoed by the Governor.). AB 316 (Carter, Chapter 317, Statutes of 2011) provided that every person who steals, takes, or carries away copper materials which are of a value exceeding $950 is guilty of grand theft, punishable as specified. SB 447 (Maldonado, Chapter 732, Statutes of 2008) required scrap metal dealers and recyclers to report what materials are being scraped at their facilities and by whom on a daily basis. AB 844 (Berryhill, Chapter 731, Statutes of 2008) required (More) AB 2312 (Nestande) Page 14 recyclers to hold payment for three days, check photo identification and take a thumbprint of anyone selling scrap metals. AB 844 also required any person convicted of metal theft to pay restitution for the materials stolen and for any collateral damage caused during the theft. SB 691 (Calderon, Chapter 730, Statutes of 2008) required junk dealers and recyclers to take thumbprints of individuals selling copper, copper alloys, aluminum and stainless steel, and required sellers to show government identification and proof of their current address. 6. Policy Concerns in Private Entities Engaging in Reporting and Tracking of Crimes This bill recognizes a web based theft alert system ScrapTheftAlert.com that is operated by ISRI a private trade association. The bill encourages enforcement agencies to report thefts of commodity metals to the alert system, and requires recyclers and junk dealers to subscribe to, and receive alerts from the alert system. Although the bill prohibits ScrapTheftAlert.com from charging for alerts sent to subscribing junk dealers and recyclers, the bill is vesting what may be regarded as essentially a state regulatory function into an industry-run web based alert system. While the creativity of using a privately-operated alert system is laudable in the light of the limited and diminishing fiscal resources of state agencies, there remains a level of concern with assigning this function to a private entity. There is concern that the bill does not contain any practice standards for the alert system, leaving those details solely in the hands of ISRI. Further there is concern that a trade association could possibly use a mandated alert system to advertise to those mandated subscribers or to sell advertisements which are then distributed to the subscribers through the alert system. In addition, there is a strong likelihood mandating junk dealers and recyclers to use ISRI's theft alert system, the bill would (More) AB 2312 (Nestande) Page 15 result in possibly benefiting ISRI by substantially increasing the membership of that trade association. (More) 7. Sunset Amendments Agreed to in Business and Professions Committee to be taken in Senate Public Safety To evaluate the efficacy of mandating the use of a private association operated theft alert system, the author agreed in the Business and Professions Committee to establish a three year sunset date until January 1, 2018, on this bill's provisions. The amendments are to be taken in this Committee. The sunset clause will allow the Legislature to revisit the issue and respond to any unintended consequences and evaluate the adequacy of encouraging law enforcement to report metal thefts to, and requiring junk dealers and recyclers to subscribe to, ISRI's metal theft alert system. 8. Arguments in Support The Association of California Water Agencies (ACWA) writes in support that metal theft has quickly become a severe drain on many water district budgets. "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 each year to repair and replace. We had hoped that the series of bills signed into law over the past several years would have curbed the rash of metal thefts, but it appears that more still needs to be done." Association of California Recycling Industries (ACRI) states, "We support the creation of this notification system and believe it is an appropriate and effective approach to reducing the incidents of metal theft in California, while ensuring that law-abiding businesses in California are not placed at a competitive disadvantage in the marketplace." The City of Beaumont states that requiring businesses to receive updates from the ISRI-operated database will help them avoid purchasing stolen goods and reduce demand for stolen scrap. "This database will also provide a powerful deterrent as thieves realize that scrap metal recycling centers are aware of their stolen goods thus increasing their chances of being caught and (More) AB 2312 (Nestande) Page 17 brought to justice." Allied Riverside County Chiefs of Police and Sheriff (ARCCOPS) states that communities have experienced a significant increase in commercial metal theft, costing our businesses and residents hundreds of thousands of dollars in direct and indirect costs. Metal theft has also created safety hazards including missing manhole covers, exposed electrical wires and severe flooding of streets and farms following damage to of backflow and irrigation systems. In some communities, these cases have resulted in serious injury to innocent citizens. ARCCOPS states, "We believe that legislation such as this, requiring recyclers to receive and disseminate information and updates from the ISRI-operated database will help to identify stolen goods and reduce demand for stolen scrap metals" ***************