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