BILL ANALYSIS Ó
SB 757
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Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Susan A. Bonilla, Chair
SB 757 (Berryhill) - As Amended: April 15, 2013
SENATE VOTE : 36-1
SUBJECT : Junk dealers and recyclers.
SUMMARY : Authorizes a junk dealer or recycler to accept as
valid seller identification a passport from any country or a
Matricula Consular issued by Mexico when buying newspaper or
California Redemption Value (CRV) containers, and clarifies that
the definition of a "secondhand dealer" does not include a "junk
dealer". Specifically, this bill :
1)Allows a junk dealer or recycler to accept as valid seller
identification a passport from any country in addition to
another item of identification bearing an address of the
seller, or the Matricula Consular in addition to another item
of identification bearing an address of the seller, as
specified, when purchasing newspapers or CRV containers.
2)Clarifies that a "secondhand dealer" does not include a "junk
dealer" as specified.
3)Declares that the clarification of the definition of a
"secondhand dealer" to explicitly exclude a "junk dealer" is
declaratory of existing law.
EXISTING LAW
1)Defines junk to mean "any and all secondhand and used
machinery and all ferrous and nonferrous scrap metals and
alloys including any and all secondhand and used furniture,
pallets, or other personal property, other than livestock."
(Business and Professions Code (BPC) Section 21600)
2)Defines a "junk dealer" as anyone engaged in the business of
buying, selling and dealing in junk; any person purchasing,
gathering, collecting or soliciting or procuring junk; or, any
person operating, carrying on, conducting or maintaining a
junk yard. (BPC 21601)
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3)Requires every junk dealer and every recycler to keep a
written record of all sales and purchases made in the course
of his or her business. The written record shall include:
a) The place and date of each sale or purchase of junk made
in the conduct of his or her business;
b) The name, valid driver's license number and state of
issuance, or a California or United States-issued
identification card number;
c) The name and identification number of a Matricula
Consular or passport and the address from an additional
item of identification that also bears the seller's name;
d) The 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;
e) 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;
f) A description of the item or items of junk purchased or
sold, including the item type and quantity, and
identification number, if visible; and,
g) 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 the junk from, as shown on a signed transfer
document. (BPC 21606)
4)Requires junk dealers and recyclers to allow for periodic
inspection of any premise maintained and any junk to determine
compliance with record keeping requirements, and requires junk
dealers and recyclers to produce his or her records of sales
and purchases for inspection by any of the following:
a) An officer holding a warrant;
b) A person appointed by the sheriff of a county or
appointed by the head of the police department of a city;
and,
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c) An officer holding a court order directing them to
examine the records or property. (BPC 21606.5)
5)Requires every junk dealer and recycler to preserve a written
record as specified for at least two years after making the
final entry of any purchase or sale of junk or scrap as
defined. (BPC 21607)
6)Provides that a junk dealer or recycler who fails to keep the
written record as required is guilty of a misdemeanor. (BPC
21608)
7)Prohibits junk dealers and recyclers from providing payments
for nonferrous materials unless specified conditions are met.
(BPC 21608.5)
FISCAL EFFECT : None. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS :
1)Purpose of this bill . This bill would allow junk dealers and
recyclers providing payment for newspaper or CRV containers to
accept a passport from any country or a Matricula Consular
issued by the Mexican consulate as acceptable identification.
These forms of identification are already accepted under
existing law in the purchase of nonferrous materials. This
bill also clarifies that a "junk dealer" is not a "secondhand
dealer", and is not subject to the provision of the secondhand
dealer law. This bill is sponsored by the West Coast Chapter
of the Institute of Scrap Recycling Industries.
2)Author's statement . "[This bill] is an attempt to address
issues and challenges to current law that regulates the
restrictions on the purchases of copper, aluminum, stainless
steel, brass, and bronze by junk dealers and recyclers. In
2012 AB 1583 (Roger Hernández), (Chapter 300, Statutes of
2012) and AB 1508 (Carter) (Chapter 531, Statutes of 2012)
added Matricula Consular language to the junk dealer portion
of the [Business and Professions] Code so it would conform to
the Secondhand Dealer reporting requirements. That change was
not applied consistently throughout the code section?Thus if a
person brings in over $100 of beverage containers and $500 of
non-ferrous material and only has a Matricula Consular form of
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identification; the recycler would not be allowed to use the
Matricula Consular identification for the beverage containers
and would have to tell the seller he cannot purchase the
beverage containers because he does not have the proper ID but
he could purchase the non-ferrous material with the ID."
3)The growing metal recycling industry . According to the
Institute of Scrap Recycling Industries, Inc., (ISRI)
nonferrous (or not 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 a nearly
infinite number of times. Nonferrous materials include
copper, copper alloys, stainless steel, or aluminum (but not
beverage containers, as specified in the California Public
Resources Code).
In the United States, the value of the nonferrous scrap industry
jumped to nearly $40 billion in 2010, which was an increase of
28% from 2009. In terms of volume, it has been reported that
nonferrous scrap materials make up a small percentage of the
total quantity of material recycled in the United States, but
by value it accounts for more than half of the total earnings
of the scrap recycling industry. In 2010, the U.S. exported
$16.7 billion worth of nonferrous scrap to nearly 100
countries.
4)The ongoing problem of metal theft . According to the author,
metal theft continues to be a serious problem in California.
The Riverside Press Enterprise reported on March 10, 2013 that
"metal thieves are hitting inland freeways hard-often during
the day-and occasionally making off with surprisingly large
items from construction sites?in another case, a freeway light
pole, which was knocked down in a crash, was stolen before
workers could repair it."
In another article from the Riverside Press Enterprise, it
reported that in "Corona, like other cities, private
residences and businesses have been hit hard by metal thieves.
Scrap yards will pay almost 3 dollars for non-insulated
copper wire and almost 2 dollars per pound for insulated
copper wire." The Federal Bureau of Investigation reported in
2008 numerous instances of copper theft causing significant
damage to important safety equipment such as tornado sirens in
Mississippi and transformers in Florida that caused electrical
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outages.
The National Insurance Crime Bureau (NICB) released a report
in 2009 regarding metal theft which reported that "thieves
seem willing to go to any length to obtain the metal, which
they can then sell to scrap dealers. Thieves 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. Frequently, the damage caused by such
thefts is several times the value of the metal stolen?Thieves
have removed wiring from traffic and railway signals and even
posed as utility workers in order to remove large sections of
thick utility cable from the sewers beneath city streets.
Several thieves have been electrocuted trying to steal live
electrical wiring." (Metal Theft Claims from January 2006 to
November 2008, February 13, 2009, NICB).
5)The identification requirement for scrap recycling . AB 1583
(Roger Hernández) (Chapter 300, Statutes of 2012) previously
authorized a junk dealer and recycler to accept as
identification of a seller a passport from any country or a
Matricula Consular, along with another form or identification
bearing an address, or an identification card issued by the
United States in addition to prohibiting junk dealers and
recyclers from purchasing or receiving bulk merchandise
pallets as specified. Under current law when a junk dealer or
recycler takes in certain nonferrous materials, they must keep
a detailed written record of the transaction including the
identification of the seller. Individuals engaged in
recycling have currently three options when providing
identification: a valid California driver's license number or
United States identification card, a passport, or a Matricula
Consular.
However, when purchasing newspapers or CRV containers, a junk
dealer must obtain an additional form of identification. This
bill will simply allow a junk dealer or recycler to accept a
passport or Matricula Consular card in addition to a primary
form of identification. Obtaining the proper identification
in any junk dealer or recycler transaction may help to
alleviate improper or illegitimate activity.
6)Identification and the Matricula Consular . The Matricula
Consular is an identification card issued to Mexican nationals
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by the Mexican Consulate. The identification card certifies
that the card holder is a Mexican National living in the
United States. The card is primarily used for identification
purposes and contains a photograph of the bearer, along with
the individual's birthplace, address outside of Mexico and a
government-issued identification number. Applicants for a
Matricula Consular card must provide proof of identity, proof
of Mexican nationality, and their local mailing address. The
Matricula Consular is widely accepted at banking institutions
and businesses throughout the country. However, because the
card is issued by a foreign government through its consulate
offices, proof of its authenticity may be difficult to verify.
7)Defining a junk dealer . According to the author, there have
been several occasions in which it has been suggested to a
junk dealer or recycler must obtain a second hand dealer
license and hold purchased property for thirty days before
selling. In order to provide greater clarity for law
enforcement and other regulating entities, this bill also
clarifies that a junk dealer and a secondhand dealer are not
the same and are not subject to the same reporting, holding
and licensing requirements. A secondhand dealer includes a
person, business or corporation whose main purpose is to buy,
sell, trade, take in pawn, accept for sale on consignment, or
accept for auction, secondhand tangible personal property.
Current law specifically exempts certain individuals from the
definition of a secondhand dealer, including coin dealers,
certain auctioneers and certain appliance repair persons.
City and county licensing agencies have been delegated the
responsibility to implement the State Secondhand Dealer and
State Pawnbroker licensing process through local programs.
A junk dealer, however, is recognized as any person engaging in
the business of buying, selling and dealing in junk; any
person purchasing, gathering, collecting, soliciting, or
procuring junk; or, 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.
While both parties deal in a form of secondhand goods, they are
subject to different licensing schemes, reporting and
documentation requirements. This bill amends the definition
of a "secondhand dealer" to exclude a "junk dealer," and
further states that this change is declaratory of existing law
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to make it more clear that a junk dealer is not a secondhand
dealer and not subject to the same report and hold
requirements of secondhand dealers.
8)Arguments in support . The Association of California Recycling
Industries writes in support, "[This bill] will allow a
recycler buying newspaper or CRV containers to accept a
passport from any country or a Matricula Consular issued by
Mexico as valid seller identification. This bill alleviates
inconsistency in prior legislation that allowed for Matricula
Consular language to identification requirements for
'secondhand dealers' but not to that of junk dealers and
recyclers."
9)Arguments in opposition . The Los Angeles County District
Attorney's Office writes in opposition, "The target of this
bill is to regulate individuals who steal metal, particularly
copper, by forcing them to identify themselves for the purpose
of later identification. However we have no way to verify
that this form of identification is legitimate."
10)Related legislation . SB 485 (Ron Calderon) of 2013 would
require a junk dealer or recycler to submit additional
information regarding its junk dealer business to the
Department of Food and Agriculture (DFA) when applying for a
weighmaster's license or a renewal license. It would also
require the DFA to complete an investigation of the
information on the application or renewal within 90 days and
requires the DFA to revoke a weighmaster's license if the
information submitted in the application or renewal is
materially inaccurate. This bill is pending in the Assembly
Business, Professions and Consumer Protection Committee.
AB 909 (Gray) of 2013 would require 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. This bill is pending in the Senate
Appropriations Committee.
AB 841 (Torres) of 2013 would require junk dealers and recyclers
to provide payment to sellers of nonferrous material by mailed
check only, as specified. This bill is pending on the Senate
Floor.
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11)Previous legislation . 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 to 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. It 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.
It also required sellers to show ID and proof of their current
address. Recyclers who violated the law faced suspension or
revocation of their business license and increased fines and
jail time.
REGISTERED SUPPORT / OPPOSITION :
Support
West Coast Chapter of the Institute of Scrap Recycling (sponsor)
Association of California Recycling Industries
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Opposition
Los Angeles County District Attorney's Office
Analysis Prepared by : Elissa Silva / B.,P. & C.P. / (916)
319-3301