BILL ANALYSIS Ó
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair A
2013-2014 Regular Session B
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3
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AB 2313 (Nestande) 3
As Amended June 16, 2014
Hearing date: June 24, 2014
Penal Code
AA:sl
METAL THEFT:
TASK FORCE, FUND AND NEW FEE
HISTORY
Source: California Farm Bureau
Prior Legislation: AB 909 (Gray) - 2013, vetoed
AB 2298 (Ma) - Ch. 823, Stats. 2012 (amended into
an unrelated measure)
Support: Air Conditioning Trade Association; Allied Riverside
County Chiefs of Police and Sheriff; Associated
Builders and Contractors - San Diego Chapter; City of
Beaumont, City of Blythe Police Department; California
District Attorneys Association; California Edge
Coalition; California Farm Bureau; California Municipal
Utilities Association; California Park and Recreation
Society; California Police Chiefs Association;
California State Sheriffs' Association; Coachella
Valley Association of Governments; Coachella Valley
Economic Partnership; Coachella Valley Water District;
Contra Costa County District Attorney's Office; Desert
Fresh, Inc.; Desert Sands Unified School District;
Desert Valley Builders Association; Eastern Municipal
Water District; General Patton Memorial Museum;
Hemet/San Jacinto Valley Chamber of Commerce; Indio
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Chamber of Commerce; Indio Police Department;
Metropolitan Water District of Southern California;
Plumbing-Heating- Cooling Contractors Association of
California; Riverside County Board of Supervisors; San
Bernardino County Sherriff's Office; San Francisco City
and County District Attorney; San Jacinto Mayor Alonzo
Ledezma; Western Electrical Contractors Association
Opposition:Aaron Metals Company; Action Sales & Metal Company;
Advanced Towing and Recycling, Inc.; Alhambra Foundry;
All New Stamping; Ambrit Industries, Inc.; American
Handforge; American Casting Company; Appliance
Distribution, Inc.; Association of California Recycling
Industries; Atlas Pacific Corporation; Atwater Iron &
Metal Inc.; AB&I Foundry; Benda Tool/A&B Die Casting;
Buccaneer Demolition; C. Hammond Construction Company;
C & H Machine, Inc.; C & M Metals; California Casting,
Inc.; California Die Casting; California Electronic
Asset Recovery; California Labor Federation; California
Manufacturers & Technology Association; California
Metals Coalition; California Metal-X; California
Taxpayers Association; Californians Against Waste; CASS
Inc. CASTCO Corporation; CLA-VAL Company; Cleveland
Wrecking Company; Consolidated Precision Products
Corporation; CPP-City of Industry; Custom Gear &
Machine; Dayton Rogers Manufacturing Company; Dayton
Rogers Manufacturing Company; Decco Castings, Inc.;
Delano Recycling Center, LLC; DBW Metals Recycling;
D.C. Metals & Recycling; Dimensional Graphics;
Diversified Tool & Die; DSV, Inc.; East County Economic
Development Council; Eckert Machining Inc.; Edelbrock
Foundry; Ekco Metals; Fenico Precision Castings, Inc.;
FMC Metals; Gamberg Metals; Gasser/Olds Foundry;
General Foundry Service Corporation; Gist Silbersmiths;
Globe Iron Foundry, Inc.; Hammond Construction;
Helfrich Tool & Die Corporation; Heraeus Precious
Metals North America LLC; Hyatt Die Cast; Ideal Metal &
Salvage Co.; Induction Technology Corporation; Inland
metal Technologies; Institute of Scrap Recycling
Industries (West Coast Chapter); International Union of
Operating Engineers, Local 39; Interplex Nascal Inc.;
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Jack Engle & Co.; J & W Auto Wreckers;
Joseff-Hollywood; Ken Walt Die Casting Corporation;
Kilroy's; Lodi Iron Works, Inc.; Kramer Metals; MIM
Metals Inc.; Modern Pattern and Foundry Co.; Montague
Company; Montclair Bronze Inc.; Nagy Precision
Manufacturing, Inc.; North Bay Steel Mill; Op-Syn
Consulting; Pacific Alloy Casting Co., Inc.; Pacific
Corrugated Pipe Company; Pacific Steel Casting Company;
Perry Tool & Research, Inc.; P. Kay Metal; Precision
Metal Tooling, Inc.; Rangers Die Casting Company;
Research Tool & Die Works; Risco Inc.; R & G Metal
Trading, LLC; River City Waste Recyclers; R.M.
Machining, Inc.; SA Recycling; San Diego East County
Chamber of Commerce; San Diego East County Economic
Development Council; Schnitzer Steel Industries;
Seaport Industrial Association; Sea Shield Marine
Products; Sierra international Machinery, LLC; Sierra
Recycling and Demolition Inc.; Simba Rercycling; SIMS
Metal Management; SKS Die Casting & Machining, Inc.;
Standard Metals Recycling; Strategic Materials
Corporation; Techni-Cast Corporation; Technikon;
ThermoFusion; Thorock Metals, Inc.; TIOCCO, Inc.; Tor
Metals; Tri County Scrap Metals, LLC; Trimco Brass;
Trio Metal Stamping; True-Tech Corporation; TST Inc.,
United Alloys and Metals; United States Pipe & Foundry
Company, LLC; Vista Metals Corporation; Waterjet West
Inc.; West Contra Costa County Council of Industries;
West Coast Protective League; WestFab Manufacturing
Inc.; numerous private individuals involved in the
industry
Assembly Floor Vote: Ayes 66 - Noes 3
KEY ISSUE
SHOULD A METAL THEFT TASK FORCE AND FUND BE CREATED, AS SPECIFIED?
PURPOSE
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The purpose of this bill is to establish the Metal Theft Task
Force and Fund supported by a new fee, as specified.
Current law provides that the Attorney General is head of the
Department of Justice (DOJ), with enumerated responsibilities
and authorities as specified. (Government Code § 12510 et seq.)
Establishment of Metal Theft Task Force and Fund
This bill would establish in the DOJ a Metal Theft Task Force
and Fund, as specified and operative on January 1, 2015, with
the following features and requirements:
Metal Theft Task Force
This bill would require DOJ to establish the Metal Theft Task
Force Program (the Program), and require that the administration
of the overall program and the evaluation and monitoring of all
grants made pursuant to the provisions of this bill be performed
by DOJ.
This bill would provide that the Program shall not be
implemented until DOJ determines that sufficient moneys have
been deposited in the Metal Theft Task Force Fund to implement
the provisions of this title.
This bill would provide that DOJ "shall only be required to
implement the provisions of this title upon the availability of
moneys in the fund in an amount sufficient to cover all costs
relating to the startup, implementation, and continuing
administration of the provisions of this title."
This bill would authorize DOJ to adopt regulations.
This bill would require that moneys appropriated to DOJ for the
program be "expended for programs that enhance the capacity of
local law enforcement and prosecutors to deter, investigate, and
prosecute metal theft and related recycling crimes."
This bill would require that, after deduction of DOJ's "actual
and necessary administrative costs, the moneys in the fund shall
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be expended for programs to enhance the capacity of local law
enforcement and prosecutors to deter, investigate, and prosecute
metal theft and related recycling crimes."
This bill further would require that moneys distributed under
this program "be expended for the exclusive purpose of
deterring, investigating, and prosecuting metal theft and
related recycling crimes."
This bill would authorize agencies that receive funding under
the program to "consult with experts from the United States
military, the California Military Department, law enforcement
entities, and various other state and private organizations,
including pertinent trade associations, as necessary to maximize
the effectiveness of this program."
Grant Awards
This bill would require DOJ to "develop administrative
procedures for the selection of agencies to receive a grant
under this program, which shall include, at a minimum, the
following requirements:
(1) That each agency seeking a grant submit a written
application to the department setting forth in detail the
proposed use of the grant funds.
(2) That, if an applicant agency is a regional task force,
the task force shall be identified by a name that is
appropriate to the area that it serves and, in order to
qualify for a grant, shall be comprised of local law
enforcement and prosecutors from at least two counties.
(3) That priority be given to applicant agencies in areas
with high rates of reported metal thefts."
This bill would require DOJ to "develop specific guidelines for
the selection of agencies to receive a grant under this program.
The guidelines shall include, at a minimum, all of the
following selection criteria, which shall be considered by the
department in awarding grants:
(1) The number of metal theft or related recycling crime
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cases filed in the immediately preceding year;
(2) The number of metal theft or related recycling crime
cases investigated in the immediately preceding year;
(3) The number of victims involved in the cases filed;
(4) The total aggregate monetary loss suffered by the
victims, including damage caused by the theft;
(5) Local moneys available to assist the agencies;
(6) The number of licensed recycling facilities in the
area; and,
(7) The estimated number of illegal recycling operations in
the area."
This bill would provide that each "agency awarded a grant under
the program during the previous funding cycle shall, upon
reapplication for funds to (DOJ) in each successive year and in
addition to any other information required by this title, submit
a detailed accounting of moneys received and expended in the
immediately preceding year."
This bill would require that the accounting include all of the
following information:
(1) The amount of moneys received and expended;
(2) The use to which those moneys were put, including
payment of salaries and expenses, purchase of equipment and
supplies, and other expenditures by type; and,
(3) The number of filed crime reports, investigations,
arrests, and convictions for metal theft and related
recycling crimes that resulted from expenditure of the
funds.
Effectiveness Reviews and Reports
This bill would require DOJ to "regularly review the
effectiveness of the program in deterring, investigating, and
prosecuting metal theft and related recycling crimes and . . .
submit a report to the Legislature and Governor," as specified.
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This bill would require agencies receiving funding from the
program to submit an annual report to the department that
details all of the following:
(1) The number of metal theft and recycling crime cases
filed in the immediately preceding year;
(2) The number of metal theft and recycling crime cases
investigated in the immediately preceding year;
(3) The number of victims involved in the cases reported;
(4) The number of convictions obtained in the immediately
preceding year;
(5) The total aggregate monetary loss suffered by the
victims, including damage caused by the theft;
(6) The number of illegal recycling operations or illegal
junk dealers, or both, shut down; and,
(7) An accounting of moneys received and expended in the
immediately preceding year, which shall include all of the
following:
(A) The amount of moneys received and expended.
(B) The uses to which those moneys were put, including
payment of salaries and benefits, operating expenses,
equipment purchases, and allowable expenditures.
(C) Any other relevant information requested.
This bill would require DOJ, no later than December 31, 2019, to
submit a "comprehensive report to the Legislature on the status
and progress, since the year 2016, of the program in deterring,
investigating, and prosecuting metal theft and related recycling
crimes." This bill would require that the report be based on
each annual report submitted to DOJ, as described above.
Metal Theft Task Force Fund
This bill would establish the Metal Theft Task Force Fund within
the Office of the Controller, to be "continuously appropriated
to the department for the purposes set forth in this title.
Transfers to the Metal Theft Task Force Fund shall be deposited
with the Controller."
This bill would provide that the fund "shall consist of moneys
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deposited into it from the federal government, industry, and
private sources," and from fees collected on the sale of any
scrap metals or alloys, as specified below.
This bill would provide that General Fund moneys shall not be
deposited into the fund nor used to start up, implement, or
support the continuing administration of the provisions of this
title.
This bill would provide that the fund shall be administered by
DOJ.
This bill would provide that moneys distributed from the fund
pursuant to the Metal Theft Task Force Program "are intended to
ensure that local law enforcement and district attorneys are
equipped with the necessary personnel and tools to successfully
combat metal theft and related recycling crimes, which include,
but are not limited to, all of the following offenses:
(1) The theft of metals, including, but not limited to,
nonferrous metals;
(2) The purchase and recycling of stolen metals, including,
but not limited to, recycled metal beverage containers, by
recyclers;
(3) The transportation of stolen metals from junk dealers
and recyclers in this state to another state;
(4) The transportation of stolen metals from another state
to this state; and,
(5) Illegal recycling operations.
New Fine
This bill would provide that except as described below, a fee,
determined by DOJ, "not to exceed 1 percent of the purchase
price for each junk sale, which involves the sale of any scrap
metals or alloys, shall be assessed on the seller of junk for
the purpose of regulating that seller. The fee assessed
pursuant to this section shall be collected by junk dealers and
recyclers at the time each sale is conducted, and shall be
submitted to the Controller for deposit into the fund."
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This bill would exclude from this fee the following:
Each junk sale or transaction, which involves the sale
of any scrap metals or alloys, between junk dealers and
recyclers; and,
Each junk sale or transaction, which involves the sale
of any scrap metals or alloys, by an automobile dismantler,
as defined in Section 220 of the Vehicle Code.
This bill would provide that its provisions shall not apply to
any of the following:
(a) A junk sale or transaction, which involves the sale of any
scrap metal or alloys, reported by a secondhand dealer or coin
dealer, as specified.
(b) A junk sale or transaction, which involves the sale of any
scrap metal or alloys, involving either:
(1) A licensed pawnbroker, as specified.
(2) A secondhand dealer or coin dealer doing business under
a secondhand dealer's license, as specified.
Definitions
This bill would apply the following definitions:
"Agency" means a regional task force, a local law
enforcement agency, or a district attorney.
"Department" means the Department of Justice.
"Fund" means the Metal Theft Task Force Fund.
"Junk" has the same meaning as set forth in Section
21600 of the Business and Professions Code.
"Junk dealer" has the same meaning as set forth in
Section 21601 of the Business and Professions Code.
"Program" means the Metal Theft Task Force Program.
"Recycler" has the same meaning as set forth in Section
21605 of the Business and Professions Code.
Sunset
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This bill would sunset its provisions on December 31, 2020.
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.
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,
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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
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.
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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.
COMMENTS
1. Stated Need for This Bill
The author states:
There are numerous state laws that have been passed in
recent years which deal with metal theft. However, a
lack of proper enforcement has hampered the ability of
these laws to be effective in combating metal theft
crimes. In order to solve this problem, law
enforcement needs a dedicated funding source for the
prosecution and investigation of metal theft crimes.
AB 2313 seeks to address this issue by providing a
stable funding source for law enforcement so they can
properly enforce existing laws and better regulate
California's recycling industry. AB 2313 places a high
priority on shutting down illegal recycling centers
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which are the main conduits for selling stolen metals
and have diverted legitimate business away from
lawfully abiding recycling centers. Metal theft crimes
will not be dramatically reduced until law enforcement
is given the resources to effectively shut down
illegal recyclers.
2. Previous Legislation to Curb Metal Theft
This Committee has passed similar bills over the last two years.
In 2012, the Committee passed AB 2298 (Ma) (5-0). That measure
was held on Appropriations suspense, amended and, ultimately,
amended into an unrelated bill. Last year, the Committee passed
AB 909 (Gray), which would have established a Metal Theft Task
Force under the Board of State and Community Corrections. That
measure was vetoed by the Governor, whose veto message stated in
part:
This bill requires the Department of Justice to
establish the Metal Theft Task Force Program to
provide grants to local law enforcement agencies and
prosecutors to enforce metal theft and related
recycling laws.
This bill creates a new enforcement effort without
identifying a funding source. Today I signed SB 485,
which does provide a funding source for greater
enforcement within the existing infrastructure. More
can certainly be done, but let's build on stable
funding base.
Last session, this Committee approved SB 1387 (Emmerson), which
prohibits junk dealers and recyclers from possessing any fire
hydrant, fire department connection, manhole cover or backflow
device without a written certification on the letterhead of the
agency previously owning the material, and adds fire hydrants,
manhole covers and backflow devices to the list of items which,
if any person possesses, knowing they were stolen, would receive
an additional fine of up to $3,000. (Penal Code § 496e.)
In 2011 the Legislature created a separate offense of grand
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theft of copper material. (AB 316 (Carter), Chapter 317,
Statutes of 2011.)
In 2009, the Legislature passed the following measures to
address the growing problem of metal theft:
SB 447 (Maldonado), Chapter 732, Statutes of 2009,
assists local law enforcement officials in quickly
investigating stolen metal and apprehending thieves by
requiring scrap metal dealers and recyclers to report
what materials are being scrapped 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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3. Opposition
As noted at the beginning of this analysis, this bill is opposed
by a number of businesses and business associations. The West
Coast Chapter of the Institute of Scrap Recycling Industries
(ISRI), for example, argues:
. . . The enforcement authority proposed to be
established under AB 2313 is completely inappropriate
and, frankly, confusing at best. Matters regarding
recycling policy and enforcement are more
appropriately placed within the California Department
of Resource and Recovery (CalRecycle), a department
within the California Environmental Protection Agency.
. . .
. . . ISRI opposes AB 2313 because it imposes a "tax"
on those customers of the recycling industry whose
scrap trade has nothing to do whatsoever with the
problem being addressed by the bill. In the 1997
Sinclair Paint Case, the California Supreme Court
established that a "fee" must be related to the
special burden it purports to address and alleviate.
Otherwise the fee is nothing more than a tax
established for the purpose of generating overall
revenue for the state.
Currently, there are many industries within the state,
such as the construction industry that demolishes old
structures in order to build new ones, where the only
scrap being recovered for recycling is comprised
completely of ferrous (iron) material. Such material
has never been a part of the scrap metal theft
controversy. When the old section of the San Francisco
Bay Bridge is finally demolished, all of the scrap
from that project will be comprised of ferrous
material. However, under the language of AB 2313, that
same material will be subject to the purported fee
being established to fund a task force related solely
to the prevention of "non-ferrous" scrap metal theft.
This is not a trivial issue in that on a poundage
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basis alone there is more ferrous material recycled in
the state than non-ferrous material. Thus, a
significant portion of the funding raised for the task
force will come from scrap metal that has nothing at
all to do with its claimed purpose or mission. Thus,
according to the Sinclair Paint decision, AB 2313's
fee is nothing more than a tax on all customers of the
recycling industry, even those who deal in recyclable
materials that are outside of the scope of the bill.
. . . ISRI supported the policy concept presented in
AB 1323 (Nestande) when it was first introduced by
Assembly Member Ma two years ago and again by Assembly
Member Gray last year. However, with the passage of SB
747 by Senator Calderon last year, the content of AB
1323 is neither necessary nor relevant. In fact, it is
simply passé. Its purpose is to put into place a task
force, still rather ill defined, to study and develop
a means of better enforcement of the current metal
theft laws on the books. SB 747 has already
accomplished that end and, even after only a few
months, it appears to be working very effectively.
Simply stated, AB 1323 is no longer necessary.
The scrap metal industry, working in cooperation with
the state Department of Food and Agriculture, Division
of Measurement Standards, has put into law an
effective enforcement process, which is operated by
the Division and enforced by the county sealers who
are public safety officers under the law. The scrap
metal industry currently pays for a hundred percent
(100%) of this program. There is no need to impose an
unnecessary taskforce and new tax on the industry when
the basic concerns of the bill have already been
addressed. The prudent approach at this point in time
is to let the current enforcement program take its
course over the next year or two and to assess its
effectiveness at the end of that time. Sometimes ideas
run their course when they are replaced with better
ideas.
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