BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        SB 485|
          |Office of Senate Floor Analyses   |                              |
          |1020 N Street, Suite 524          |                              |
          |(916) 651-1520         Fax: (916) |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 
           
                                           
                                    THIRD READING


          Bill No:  SB 485
          Author:   Calderon (D), et al.
          Amended:  5/28/13
          Vote:     21


           SENATE BUSINESS, PROF. & ECON. DEV. COMM.  :  10-0, 4/22/13
          AYES:  Price, Emmerson, Block, Corbett, Galgiani, Hernandez,  
            Hill, Padilla, Wyland, Yee

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 5/23/13
          AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg


           SUBJECT :    Weighmasters:  junk dealers and recyclers

           SOURCE  :     West Coast Chapter of the Institute of Scrap  
          Recycling Industries


           DIGEST  :    This bill requires a junk dealer or recycler upon  
          application for or renewal of a weighmaster's license to submit  
          additional specified information regarding its junk dealer or  
          recycler business to the Department of Food and Agriculture  
          (CDFA); requires CDFA to immediately inform the county sealer  
          who shall then make a thorough investigation of the information  
          submitted on that application within 90 days and report to CDFA  
          if it is determined that the application is materially  
          inaccurate; requires CDFA to revoke a junk dealer or recycler's  
          weighmaster's license if the information submitted in the  
          application is materially inaccurate; and requires a junk dealer  
          or recycler who is a weighmaster applying for a weighmaster's  
          license to pay an additional annual fee of $500 to CDFA for the  
                                                                CONTINUED





                                                                     SB 485
                                                                     Page  
          2

          administration and enforcement of these provisions.




           ANALYSIS  :    

          Existing law:

          1.Vests the CDFA with general supervision of weights and  
            measures and weighing and measuring devices sold or used in  
            the state, and authorizes the Secretary of CDFA to exercise  
            any power conferred upon CDFA or upon the State Sealer, who is  
            the chief of the Division of Measurement Standards (DMS)  
            within CDFA and is charged with the enforcement of the  
            provisions relating to weights and measures.  Further provides  
            for the enforcement of those laws and the inspection and  
            testing of measuring devices, in each county, by the county  
            sealer.

          2.Defines a weighmaster as any person, who, for hire or  
            otherwise, weighs, measures, or counts any commodity and  
            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.  Requires a  
            weighmaster to obtain a license and to pay a license fee, as  
            prescribed.

          3.Authorizes the Secretary to refuse to grant a license, to  
            refuse to renew a license, or to revoke or suspend a license  
            if, after an administrative hearing, the Secretary is  
            satisfied that the applicant or licensee is not qualified to  
            capably or reliably perform the duties of a weighmaster or has  
            been found guilty of a misdemeanor relating to the regulation  
            of weighmasters.

          4.Regulates junk dealers and recyclers and defines "junk" to  
            mean secondhand and used machinery and all ferrous (containing  
            iron) and nonferrous (excludes iron) scrap metals (as defined)  
            and alloys, including any and all secondhand and used  
            furniture, pallets, or other personal property, excluding  
            livestock; "junk dealer" to include any person engaged in the  
            business of buying, selling and dealing in junk, or  
            purchasing, gathering, collecting, soliciting or procuring  

                                                                CONTINUED





                                                                     SB 485
                                                                     Page  
          3

            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;  
            and "recycler" to mean any processor, recycling center, or  
            noncertified recycler, as defined, who buys or sells scrap  
            metal that constitutes junk.

          5.Requires junk dealers and recyclers to keep a written record,  
            as specified, of each sale and purchase for at least two  
            years; requires the written information to be reported to the  
            chief of police or sheriff, as specified; and makes it a  
            misdemeanor to make a false or fictitious statement in the  
            written record.
          6.Requires junk dealers and recyclers to record certain  
            information from the seller when buying nonferrous (not  
            containing iron) materials, including a valid driver's  
            license, or other specified identification; obtain a clear  
            photograph or video of the seller and a clear photograph or  
            video of the material being purchase, and obtain a thumbprint  
            of the seller, as prescribed by the Department of Justice.

          This bill:

          1.Makes legislative findings and declarations that (a) the  
            commercial scrap recordkeeping and reporting requirements are  
            intended primarily to discourage metal theft and to promote  
            honest competition within the scrap metal recycling industry;  
            (b) the primary function of DMS is to ensure fair and honest  
            competition for industry and accurate value comparison for  
            consumers; and (c) because DMS and county sealers are  
            responsible for periodically inspecting and regulating all  
            weighing and measuring devices utilized by all scrap recyclers  
            doing business within the state, they are perfectly suited to  
            review and verify the recordkeeping and reporting requirements  
            for the scrap recycling industry.

          2.Requires CDFA to require a recycler or junk dealer, as  
            defined, who applies for a weighmaster's license or to renew a  
            weighmaster's license to furnish specified additional  
            information on the application:

             A.   A current business license.

             B.   A statement that the applicant has filed an application  

                                                                CONTINUED





                                                                     SB 485
                                                                     Page  
          4

               for a stormwater permit or is not required to obtain a  
               stormwater permit.

             C.   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.

             D.   The names of any deputy weighmasters.

          1.Requires CDFA to issue a weighmaster's license to a junk  
            dealer or recycler to an applicant who submits the appropriate  
            information and fee.

          2.Requires CDFA to immediately inform the county sealer who  
            shall then make a thorough investigation of all of the  
            information contained in the application within 90 days.
          3.Requires the county sealer to report to CDFA if the county  
            sealer determines that the application contains materially  
            inaccurate information, and, if CDFA determines that the  
            information submitted is materially inaccurate, CDFA shall  
            revoke the license issued to a junk dealer or recycler unless  
            the junk dealer or recycler complies with specified  
            requirements within 14 days of notice from CDFA of a proposed  
            revocation pursuant to this bill.  Provides that a junk dealer  
            or recycler whose license has been revoked is entitled to a  
            hearing.

          4.Requires CDFA to revoke a junk dealer or recycler's  
            weighmaster's license if the information submitted in the  
            application is materially inaccurate, unless the junk dealer  
            or recycler complies with these information requirements  
            within 14 days. 

          5.Provides that a junk dealer or recycler whose weighmaster's  
            license has been revoked is entitled to a hearing before an  
            administrative law judge, as specified.

          6.Requires a weighmaster that is a junk dealer or recycler to  
            pay an additional annual fee of $500 to the CDFA for the  
            administration and enforcement of these provisions.

           Background

                                                                CONTINUED





                                                                    SB 485
                                                                     Page  
          5

           
          In 2009, metal theft reached an unacceptable level.  In 2005,  
          the number of reported metal theft incidents went up 100% from  
          the previous year, and in 2006 the increase was 400%.  The value  
          of metals stolen in 2008 was at least $6 million in California.   
          News stories up and down the state were highlighting that  
          nothing was being spared by metal thieves.

          Farmers were seeing copper wires and aluminum pipes stripped  
          from their equipment.  Utility companies are seeing their lines  
          cut and stripped of copper wire.  Construction companies lost  
          wire and pipe at construction sites.  Schools, churches, and  
          businesses had their wire from air conditioning units stolen.   
          Catalytic converters ripped off of parked cars.  Even bronze  
          cemetery vases were being stolen and sold for scrap.  The list  
          goes on and on, and the damage caused by the theft results in  
          much greater costs for the victims than is gained by the  
          thieves.

          The reasons for these thefts were fairly simple.  The stolen  
          metal could be sold to metal recyclers for a good amount of  
          cash, on the spot.  Copper was the hot commodity in particular,  
          and given its high price, thieves were taking just about  
          anything copper they could get their hands on.  Law enforcement  
          agencies throughout the state concluded from arrests made that  
          metal thieves were predominantly drug users looking for quick,  
          easy money to feed their habit.

          In an effort to toughen restrictions on the purchase of metal,  
          and thus to curb the sale of stolen metal, in 2008, the  
          Legislature enacted SB 691 (Calderon, Chapter 730, Statutes of  
          2008), AB 844 (Berryhill, Chapter 731, Statutes of 2008) and SB  
          447 (Maldonado, Chapter 732, Statutes of 2008).  These bills  
          attempted to stem the tide of metal theft in California.  Since  
          that time a number of bills have sought to further address  
          different aspects of the problem of recycling stolen materials.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee, costs to CDFA  
          will be funded with a newly established fee on junk dealers and  
          recyclers.


                                                                CONTINUED





                                                                     SB 485
                                                                     Page  
          6

           SUPPORT  :   (Verified  5/28/13)

          West Coast Chapter of the Institute of Scrap Recycling  
          Industries (source)
          Association of California Water Agencies
          California Chamber of Commerce
          California Farm Bureau Federation 
          Montebello Chamber of Commerce
          PacifiCorp


           ARGUMENTS IN SUPPORT  :    The author's office acknowledges that  
          California has stringent reporting requirements for recycling  
          companies when purchasing non-ferrous materials such as copper  
          and stainless steel.  The purpose for creating such strict  
          reporting requirements, according to the author's office, was to  
          discourage metal theft and promote honest competition within the  
          scrap metal recycling industry.  Unfortunately, the reporting  
          requirements have not stopped the theft of metals.  Instead, it  
          has created unscrupulous and non-compliant recyclers within the  
          industry.  The consensus is not that existing laws have  
          shortcomings, but the lack of resources to enforce the law.  Due  
          to the extreme strain on state and local revenues, the ability  
          to enforce the existing laws seems to be the greatest challenge  
          to solving the metal theft puzzle for local law enforcement.   
          Non-compliant recyclers provide an avenue for thieves to sell  
          stolen material, according to the author's office.  This bill  
          seeks to address the issue of monitoring recyclers who do not  
          follow the law by establishing additional requirements for  
          recyclers who submit an application for a new weighmaster's  
          license or the renewal of a weighmaster's license with CDFA.

          The bill's sponsor, the West Coast Chapter of the Institute of  
          Scrap Recycling Industries (ISRI), argues that "California has  
          the most comprehensive statutory structures in the nation to  
          help prevent the theft of non-ferrous metal which ISRI  
          supported.  Over the years, it has become readily apparent that  
          additional laws on the books are not necessary.  The problem is  
          not the lack of sufficient statutory muscle, but the dire lack  
          of judicial enforcement.  Simply stated, few local police  
          agencies have the desire to redirect their scarce resources to  
          enforce the metal theft laws.  This is a budgetary issue and not  
          an issue of substantive law.  SB 485 will help relieve the  
          budgetary stress on law enforcement and is another step in the  

                                                                CONTINUED





                                                                     SB 485
                                                                     Page  
          7

          right direction in reducing metal theft by providing additional  
          enforcement tools."

          The California Grocers Association (CGA) supports the bill,  
          arguing that allowing sealers to inspect and cite these  
          businesses' financial records for accepting stolen metals such  
          as shopping carts will act as a deterrent for these dealers to  
          no longer accept unlawfully obtained material.  "Simply put, SB  
          485 will help curb a theft issue that deeply impacts our member  
          companies," writes CGA.

          The California Farm Bureau Federation states that metal theft is  
          a crisis facing our communities and given public safety budget  
          cuts, and providing the authority to county agricultural  
          commissioners is an important step to expand the enforcement of  
          the record keeping requirements for junk dealers and recyclers."

          The California Chamber of Commerce argues that tougher  
          enforcement serves as a deterrent to crimes as shown through the  
          work of rural crime task forces operating on the coast and in  
          the central part of the state.

          MW:ej  5/28/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****


















                                                                CONTINUED