AB 1508
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THIRD READING
Bill No:
Author:
Amended:
Vote:
AB 1508
Carter (D)
7/2/12 in Senate
21
SENATE BUSINESS, PROF. & ECON. DEV. COMM.: 8-1, 6/25/12
AYES: Price, Emmerson, Corbett, Correa, Hernandez, Negrete McLeod,
Vargas, Wyland
NOES: Strickland
ASSEMBLY FLOOR: 75-0, 5/14/12 - See last page for vote
SUBJECT:
Junk dealers and recyclers: nonferrous materials
SOURCE:
San Bernardino County Sheriff
DIGEST: This bill revises the exemption from the requirement to collect
seller information and delay payment for three days, for the sale of
nonferrous materials with a value under $20, to require that the majority of
the transaction must be to purchase beverage containers, and excludes
purchase of copper or copper alloys from that exemption.
ANALYSIS:
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,
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excluding livestock. (Business and Professions Code (BPC) Section
21600)
2. Provides that “scrap metals and alloys” includes, but is not limited to,
materials and equipment commonly used in construction, agricultural
operations and electrical power generation, railroad equipment, oil well
rigs, nonferrous materials, stainless steel, and nickel which are offered
for sale to any junk dealer or recycler, but does not include scrap iron,
household generated waste, or aluminum beverage containers, as
defined. (BPC Section 21600)
3. Requires junk dealers and recyclers to keep a written record, as
specified, of all junk sales and purchases 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. (BPC Section 21606)
4. Requires junk dealers and recyclers to do the following when buying
nonferrous (not containing iron) materials: (BPC Section 21608.5 (a))
A. Pay by cash or check mailed to the seller or collected by the seller
on the third business day after the sale. The seller may have the
check mailed to an alternative address, but not a post office box, if
the seller identifies that location by a driver's license or
identification card, and a gas or electric utility bill addressed to the
seller at the alternate address with a payment due date no more than
two months prior to the date of sale.
B. Obtain a clear photograph or video of the seller.
C. Obtain a copy of the driver's license of the seller containing a
photograph and address or a copy of a state or federal governmentissued identification card with a photograph and address of the
seller.
D. Obtain a clear photograph or video of the material being sold.
E. Preserve the information for at least two years from the date of sale.
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F. Obtain a thumbprint of the seller, as proscribed by the Department
of Justice.
5. Makes an exemption from the requirement to pay by cash or check
mailed or collected on the third business day after the sale, if during the
prior three months, the dealer completes five or more transactions a
month (on separate days) with the seller. (BPC Section 21608.5 (b))
6. Provides that the delayed payment requirement does not apply if the
junk dealer or recycler receives or has on file the seller’s: (BPC Section
21608.5 (c))
A. Name, physical business address, business telephone number.
B. The business license number or tax identification number.
C. A copy of the valid driver’s license of the person delivering the
material on behalf of the seller.
7. Provides an exemption from the payment restrictions and the
requirement to collect identification information (described in #4, #5 and
#6 above) when the nonferrous material’s value does not exceed $20 in a
single transaction, when the primary purpose is to redeem beverage
containers under the California Beverage Container Recycling and Litter
Reduction Act. (BPC Section 21608.5 (d))
This bill:
1. Modifies that exemption described in #7 above, to apply when the
majority of the transaction is for the purchase of beverage containers.
2. Excludes the purchase of materials made of copper or copper alloys
from that exemption.
3. Makes a technical change to delete an obsolete operative date.
Background
Metal theft has become increasingly popular within the last decade and the
theft of copper, aluminum, fire hydrants, manhole covers, and backflow
devices in particular are on the rise, and represent a significant health and
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safety concern to the public. According to an April 2, 2012 Sacramento Bee
article, “The cost of addressing the crime wave has likely surpassed $1
million over the past year. Officials with the city’s Department of
Transportation think they’ll have to spend another $2 million over the next
year repairing streetlights damaged by thieves.” Over a New Year’s
weekend in 2011, 50 manhole covers were stolen from the streets of
Sacramento. Cities, counties, and special districts are taking different
approaches to address metal theft. Eastern and Municipal Water Districts
have issued $500 rewards for citizens who turn in thieves. Anaheim Public
Utilities has issued a customer alert on their website asking residents to take
precautions to protect their backflow devices. The City has further indicated
that residents may wish to increase patrol and install video surveillance
devices if they wish to further protect their devices.
The rise in recycled metal prices has increased the demand for such items.
Metal theft has been well documented in California. The Los Angeles Times
reported an individual stealing 45 fire hydrants within the Inland Empire.
Investigators of the incident reported, “The theft of metal to sell as scrap,
such as copper wiring, bronze fixtures and iron from construction site, is
common, especially during a prolonged economic slump.”
Metal theft increases. Forbes Magazine (May 2012) states that the National
Insurance Crime Bureau (NICB) reports that with metal prices rising, so
have the number of reported thefts of metals such as copper, bronze, brass
and aluminum. In fact, law enforcement agencies across the United States
and around the world had seen increased numbers of metal thefts in the years
leading up to the economic downturn in 2008. Construction sites, churches,
cemeteries, transportation, farm equipment and homes are just some of the
targets of thieves who strip the metal and then sell it on to scrap dealers to
net themselves some quick cash.
Forbes further indicates that critical infrastructure is at risk. The NICB
gives the example of a recent theft of copper wiring which blacked out
runway approach lights at the Modesto, California regional airport.
A report of insurance claims related to metal thefts covering 2009-11
identifies an 81% increase from 2006-08. The majority of total claims
(96.1%) pertained to the theft of copper, the NICB said. Some 55% of the
claims were on commercial or business insurance policies, while 45% were
on personal policies. In the report, California ranked fourth, nationally in
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the number of metal theft claims behind Ohio, Texas and Georgia.
Enforcement concerns. Dramatic increases in metal theft have sparked
numerous legislative actions over the past decade. However, enforcement of
such provisions has proven not to be as effective due to fiscal constraints in
local law enforcement. Deputy Sheriff Jim Currie of the Solano County
Sheriff’s Office reports that metal theft is picking up: “We’ve got some
things in place to help step up our surveillance, but like other agencies,
we’ve cut back on people and patrol time. Our Sheriff is addressing that
right now, but it has been rough with the budget situation the way it is.”
It appears that a consensus of thought seems to be that the real problem with
metal theft is not so much shortcomings in the existing law, but the lack of
resources to enforce the law. During this time of extreme challenges to state
and local revenues and the corresponding budget shortfalls, the ability to
enforce the existing law seems to be the greatest challenge to solving the
metal theft puzzle for local and state law enforcement efforts.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT: (Verified 7/2/12)
San Bernardino County Sheriff (source)
California Municipal Utilities Association
City of Roseville
Irvine Ranch Water District
Liberty Mutual Group and Golden Eagle
Metropolitan Water District of Southern California
Placer County Water Agency
San Diego County Water Authority
San Juan Water District
Southern California Edison
ARGUMENTS IN SUPPORT: The author indicates that in 2008, when
Governor Schwarzenegger signed AB 844 (Berryhill, Chapter 731, Statutes
of 2008), which stiffened penalties and procedures for recycling companies
when receiving scrap materials, that law enforcement saw a dramatic
decrease in metal thefts. However, according to the author, the legislation
provided a loophole in the enforcement of this law, providing that if the
primary purpose of the transaction is for redeeming CRV (cans, bottles and
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plastic), individuals are able to redeem cash for their scrap metals if it
remains under $20.
An example of what was intended with this provision is if a person cleans up
their garage and has a small bag of aluminum cans and an extension cord he
wants to get rid of, he can scrap the materials for under the $20 threshold
and get paid in cash immediately. However, this loophole has resulted in
increased metal thefts, according to the author, who states:
According to the San Bernardino County Sherriff s Department, metal
thefts have increased again to almost the same level it was prior to the
passage of AB 844 because metal thieves became aware of this loophole.
In order to obtain quick cash, thieves use pieces stolen from buildings
and infrastructure to sell to recycling companies, while combining their
materials with aluminum cans. Therefore, it is hard to determine the
seller's primary purpose because thieves began packaging their stolen
metal into $20 increments.
Individuals have discovered that if they keep the material weight to under
the $20 limit, or get a friend to scrap the materials, they can be paid in
cash without having the required three day hold on transactions with
check. AB 1508 would prevent individuals from receiving any cash for
copper when bundled with other recycled materials such as bottles and
cans.
ASSEMBLY FLOOR: 75-0, 5/14/12
AYES: Achadjian, Alejo, Allen, Ammiano, Beall, Bill Berryhill, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles
Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman,
Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Wagner, Wieckowski, Williams, Yamada, John A.
Pérez
NO VOTE RECORDED: Atkins, Davis, Fletcher, Perea, Valadao
JJA:m 7/2/12 Senate Floor Analyses
SUPPORT/OPPOSITION:
SEE ABOVE
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