BILL ANALYSIS Ó
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|Hearing Date:April 22, 2013 |Bill No: SB |
| |757 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: SB 757Author:Berryhill
As Amended:April 15, 2013 Fiscal:No
SUBJECT: Junk dealers and recyclers.
SUMMARY: Makes conforming changes to authorize a junk dealer or
recycler buying newspaper or CRV containers to accept as valid seller
identification, a passport from any country or a Matricula Consular
issued by Mexico; clarifies that the term "secondhand dealer" does not
include a junk dealer.
Existing law:
1)Regulates junk dealers and recyclers and defines "junk" as
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. (Business and
Professions Code (BPC) § 21600)
2)Requires junk dealers and recyclers to keep a written record 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. The record must include the place
and date of the sale; the name, driver's license number and state of
issue, and the vehicle license plate number and state of issue of
any motor vehicle used in transporting the junk; the name and
address of each person to whom the junk is sold and that person's
motor vehicle license number; a description of the junk purchased or
sold; and, a statement indicating that the seller of junk owns it or
is authorized to sell it. (BPC § 21606)
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3)Requires junk dealers and recyclers to record certain information
from the seller when buying nonferrous (not containing iron)
materials, including a valid driver license, a state or federal
government-issued identification card, a passport from another
country, or a Matricula Consular in addition to another item of
identification containing an address of the seller.
(BPC § 21608.5)
4)Requires junk dealers and recyclers in a jurisdiction with curbside
recycling pickup services, as specified, to record certain
information from the seller when buying newspaper or California
Refund Value (CRV) containers, including a valid driver license, a
state or federal government-issued identification card. (BPC §
21608.6)
5)Defines "secondhand dealer" as a business which includes buying,
selling, taking in trade, taking in pawn, taking in consignment,
accepting for auction or auctioning secondhand tangible personal
property, as defined. (BPC § 21626)
6)Provides that "secondhand dealer" does not include either of the
following: (BPC § 21626.5)
a) Any person who performs the services of an auctioneer for a
fee or salary.
b) Any person whose business is limited to the reconditioning and
selling of major household appliances, as specified.
7)Requires a secondhand dealer to obtain a license from the local
chief of police, sheriff or police commission to engage in the
business of a secondhand dealer, as specified.
(BPC § 21641)
This bill:
1)Makes conforming changes to authorize a junk dealer or recycler
buying newspaper or CRV containers, as specified above, to accept as
valid seller identification, a passport from any country or a
Matricula Consular issued by Mexico, along with another form of
identification bearing the seller's address.
2)Clarifies that the term "secondhand dealer" does not include a junk
dealer, as defined, and declares that this provision is declaratory
of existing law.
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FISCAL EFFECT: Unknown. This bill has not been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. This bill is sponsored by the West Coast Chapter of the
Institute of Scrap Recycling Industries (ISRI) to make
clarifications and to update and strengthen restrictions on
purchases by junk dealers and recyclers. The bill makes conforming
changes with other provisions of the junk dealer law to authorize a
junk dealer or recycler buying newspaper of CRV containers, to
accept a passport or a Matricula Consular issued by Mexico as
acceptable identification for a seller. The bill also clarifies
that a junk dealer or recycler is not a second hand dealer.
2.Background. This bill has been introduced within the context of
California's ongoing struggles to curb the theft of stolen valuable
metals such as copper, aluminum, and brass. In California, the
fourth largest agriculture economy in the world generating over $34
billion, the negative impact of metal theft on agriculture affects
the daily lives of each Californian.
The Author cites estimates that place the annual loss of U.S.
agricultural economic activity due to agricultural crime, including
metal theft, at well over $5 billion. The Author indicates that our
farm economy in California is losing tens of millions of dollars
each year to thieves. Metal theft is particularly harmful as the
farmer or rancher losses more than just metal. Typically, the damage
to the equipment far outweighs the value of stolen metal.
3.Historical Perspective. In 2009 metal theft, simply put, had 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
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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.
4.Matricula Consular. This bill would additionally authorize a junk
dealer or recycler purchasing newspaper or CRV containers to accept
for purposes of seller identification, a valid passport or a
Matricula Consular. The Matricula Consular is an identification
card issued by the Government of Mexico through its consulate
offices. The official purpose of the card is to demonstrate that
the bearer is a Mexican national living outside of Mexico. It
includes an official Government of Mexico issued identification
number and bears a photograph and address of the Mexican National to
whom it is issued. In 2002, the Mexican Consulate began to issue
the high-security identification card to Mexican Nationals. The
Matricula Consular contains state-of-the-art security features and
is accepted by a number of businesses and banks throughout the
country.
By authorizing a junk dealer to accept a passport or Matricula Consular
in order to verify identification this bill would make conforming
changes with recent amendments made to the second hand dealer and
other provisions of the junk dealer law.
5.Clarification that a junk dealer is not a second hand dealer.
Proponents of this measure have indicated that this clarification
was included because there have been several occasions in which law
enforcement in inspecting junk dealer or recycler records have
suggested that a junk dealer must obtain a second hand dealer
license from local law enforcement
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(BPC § 21641) and hold purchased property for thirty days before
selling. The bill makes it clear that a junk dealer is not a second
hand dealer and thus not subject to these requirements.
6.Related Legislation.
AB 485 (Calderon) requires a junk dealer or recycler upon application
for or renewal of a weighmaster license to submit additional
specified information regarding its junk dealer or recycler business
to the Department of Food and Agriculture; requires the Department
to make a thorough investigation of the information submitted on
that application within 90 days; requires the Department to revoke a
junk dealer or recycler's weighmaster license if the information
submitted in the application is materially inaccurate; requires a
junk dealer or recycler applying for a weighmaster license to pay an
additional unspecified fee to the Department for the administration
and enforcement of these provisions. This bill is set for hearing
by this Committee on April 22.
AB 909 (Gray) requires the Board of State and Community Corrections to
establish a Metal Theft Task Force Program (MTTFP). To provide and
evaluate and monitor grants disbursed to enhance to enhance the
capacity of local law enforcement and prosecutors to deter,
investigate, and prosecute metal theft and related metal theft
crimes. That bill is currently in Assembly Appropriations
Committee.
AB 841 (Torres, 2013) requires junk dealers and recyclers to provide
payment to sellers of nonferrous material by mailed check only, as
specified. This bill has been referred to Assembly Business,
Professions and Consumer Protection Committee for hearing.
AB 2003 (Torres, 2012) was essentially identical to AB 841, above.
This bill failed passage in this Committee on June 18, 2012.
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
prohibiting the redemption of materials made of copper or copper
alloys.
AB 1583 (Roger Hernandez, Chapter 300, Statutes of 2012) prohibited
junk dealers and recyclers from purchasing or receiving bulk
merchandise pallets, as defined, marked with an indicia of
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ownership, as defined, from anyone except the indicated owner,
unless specified information is provided.
SB 1387 (Emmerson, Chapter 656, Statutes of 2012) prohibited a junk
dealer or recycler from possessing manhole covers, backflow devices,
and fire hydrants without written certification on the letterhead of
the public agency or utility that previously owned that material.
Failure to comply with this provision would result in a criminal
fine of up to $3,000. This bill has been referred to the Assembly
Public Safety Committee for hearing.
SB 1045 (Emmerson, Chapter 393, Statutes of 2012) established civil
liability for a junk dealer or recycler who possesses a fire
hydrant, a fire department connection, as specified, or a backflow
device or connection to that device or part of that device without a
prescribed written certification, from the agency or utility owning
or previously owning the material.
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 by a
fine not exceeding $2,500, imprisonment in a county jail not
exceeding one year, or by both that fine and imprisonment, or by
imprisonment in a county jail or the state prison not exceeding 16
months, or 2 or 3 years and a fine not to exceed $10,000, as
specified.
AB 1778 (Ma, Chapter 733, Statutes of 2009) required recyclers to
obtain identifying information of individuals who bring in more than
$50 worth of CRV recyclables and newspapers. AB 1778 also required
that payments of $50 or more be made by check.
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 recyclers
to hold payment for three days, check a photo ID and take a
thumbprint of anyone selling scrap metals. 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. Also, required
sellers to show a government identification (ID) and proof of their
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current address. Recyclers who violated the law faced suspension or
revocation of their business license and increased fines and jail
time.
SB 627 (Calderon, Chapter 603, Statues of 2009) required a core
recycler, that accepts, ships, or sells used catalytic converters to
maintain specified information regarding the purchase and sale of
the catalytic converters for not less than 2 years. Prohibited a
core recycler from providing payment for a catalytic converter
unless the payment is made by check, and the check is mailed or
provided no earlier than 3 days after the date of sale.
7.Arguments in Support. In sponsoring the bill, the West Coast Chapter
of the Institute of Scrap Recycling Industries (ISRI) writes that
ISRI is working with the Author and all of the stakeholders in
determining what changes are necessary in current law. SB 757
clarifies that "junk dealers" are not "secondhand dealers," stating
that junk dealers purchase metals from its customers and that
material is never sold back to the public. Instead, all of the
material purchased is separated by metal types and sent to a buyer
who will turn the metal into another product. ISRI further states,
"For example, the metals in a refrigerator may be used to make a
computer or cookware. Whereas, a secondhand dealer either buys,
sells, trades, takes in pawn, accepts for sale on consignment,
accepts for auction, or auctions secondhand tangible personal
property and is resold to the general public. A secondhand dealer
might take in pawn or buy a watch or a car and then sell the watch
or car to the general public in its original state." ISRI states
that law enforcement has confused the two businesses, and thus this
bill will make certain that the two businesses have separate
functions.
ISRI further writes that legislation in 2012 added Matricula Consular
language to the junk dealer identification requirements of the
Business and Professions Code. Unfortunately, an oversight was made
and that change was not made in BPC § 21608.6 as it was in other
portions of the code. SB 757 alleviates that inconsistency in the
law.
California Farm Bureau Federation (Farm Bureau) writes in support of SB
757 (Berryhill) that the bill is an attempt to improve the system
regulating scrap metal recyclers and improve upon the changes made
in prior legislation. The Farm Bureau states that thieves strip
copper wires from pumps and steal other metal such as sprinkler
heads and irrigation pipes from farms. The cost of replacing copper
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wire on an irrigation pump ranges from $1,500 to $4,000. When the
irrigation pump is damaged in the theft the repair costs can reach
tens of thousands of dollars. Yet this cost only covers repair of
the pump, not the cost of potential crop damage caused by lack of
irrigation while the pump was unusable.
The Farm Bureau further indicates that metal theft is not only
impacting California's farmers and ranchers, but utilities
throughout the state are seeing utility lines cut and stripped of
copper wire and construction companies are losing wire and pipe to
thieves. Cities and counties are seeing copper wiring stripped from
traffic lights raising significant public safety concerns.
8.The Author Considers This Measure as a "Work in Progress." The
proponents and the Author's office have both indicated that this
bill is a work in progress, and that discussions between the
stakeholders about the issues surrounding metal theft may result
other, yet unknown, amendments to this bill.
It should be noted that once this measure is voted out of this
Committee there will not be another chance to review this measure,
unless the bill is completely rewritten or is considered as a new
bill. Making substantive amendments to this measure as it moves
through the Legislature is not sufficient justification for this
measure to be referred back to this Committee for consideration or a
subsequent vote. The Committee may wish to direct Committee staff
to work closely with the Author and other stakeholders to come to
agreement on changes to this measure.
SUPPORT AND OPPOSITION:
Support:
West Coast Chapter of the Institute of Scrap Recycling Industries
(Sponsor)
California Farm Bureau Federation
Opposition:
None received as of April 16, 2013
Consultant:G. V. Ayers
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