Legislature(2013 - 2014)HOUSE FINANCE 519
03/18/2014 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB305 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 305 | TELECONFERENCED | |
| += | HB 306 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 18, 2014
8:33 a.m.
8:33:05 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 8:33 a.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Lindsey Holmes
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Daniel George, Staff, Representative Bill Stoltze; Speaker
Mike Chenault, Sponsor; Tom Wright, Staff, Representative
Chenault; Anne Carpeneti, Assistant Attorney General, Legal
Services Section-Juneau, Criminal Division, Department of
Law; Don Habeger, Director, Division of Corporations,
Business and Professional Licensing, Department of
Commerce, Community and Economic Development.
PRESENT VIA TELECONFERENCE
Phil Steyer, Director Of Government Relations, Chugach
Electric, Anchorage; John MacKinnon, Executive Director,
Associated General Contractors of Alaska, Anchorage; Louise
Bray, Schnitzer Steel Industries, Anchorage; Nic Ballard,
General Manager, Schnitzer Steel Industries, Anchorage;
Matt Fonder, Department of Revenue, Anchorage.
SUMMARY
HB 305 JUNK DEALER & METAL SCRAPPER LICENSING
HB 305 was HEARD and HELD in committee for
further consideration.
HB 306 EVAL. INDIRECT EXPENDITURES; TAX CREDITS
HB 306 was SCHEDULED but not HEARD.
HOUSE BILL NO. 305
"An Act repealing the requirement that a junk dealer
or metal scrapper obtain a license."
8:33:14 AM
Representative Costello MOVED to ADOPT the proposed
committee substitute for HB 305, Work Draft 28-LS1449\P
(Bannister, 3/17/14).
Co-Chair Stoltze OBJECTED for discussion.
DANIEL GEORGE, STAFF, REPRESENTATIVE BILL STOLTZE,
discussed the changes in the committee substitute (CS). He
explained that the title had expanded from the previous
version. He read the title as follows:
"An act relating to the records of metal scrappers;
relating to the crime of criminal mischief for
removing metal from property; repealing the
requirement that a junk dealer or metal scrapper
obtain a license; and providing for an effective
date."
Mr. George presented a sectional analysis. He explicated
that Section 1 established new recordkeeping requirements
for the sale of scrap metals. The dealer must maintain
accurate paper or electronic records for each sale of scrap
meatal of $100. or more and include the date, time,
location, and value of the scrap metal purchased; the
sellers driver's license number, description of vehicle
delivering the metal, including the license plate number;
business license number, if applicable, a description
including weight and quantity of scrap metal; and a signed
statement that the scrap metal was not stolen property. The
records must be made available to law enforcement. The
dealer was required to maintain the records for five years.
He added that the CS provided and exemption from the
recording requirements with a valid tax identification
number or government issued photo identification for volume
transactions. A dealer that failed to comply or falsified
record entries would be guilty of a class A misdemeanor.
He stated that the list was developed by a working group of
contractors, utility companies, and scrap metal dealers
following a review of other states' laws.
Mr. George continued that the CS established new
definitions for "dealer," "record," and "scrap metal,"
"scrap metal dealer," and "transaction" for purposes of
Section 1. He moved to Section 2 and detailed that the
section amended the crime of criminal mischief in the third
degree, which added a new subsection (4) that read:
…"with the intent to deprive another of the metal or
to appropriate the metal of another to oneself or a
third person, the person removes from property of
another metal that is physically attached to the
property, and the removal damages the property in an
amount of $500 or more."
Mr. George reported that Section 3 repealed the annual junk
and scrap metal license from the Department of Revenue
(DOR). Section 4 clarified that the criminal penalties in
Section 3 applied to crimes occurring after the effective
date of January 1, 2015. He concluded that Section 5
designated January 1, 2015 as the effective date of the
act.
SPEAKER MIKE CHENAULT, SPONSOR, specified that the original
bill was simply a repealer dealing with licensing that was
no longer used by DOR. He noted that he was contacted by
utility companies and other corporations that had copper
and other precious metals stolen from their work sites and
turned into scrap metal. He stated that some types of the
metal were expensive and sought after by thieves. If the
original item that contained the metal was altered or
destroyed in the extraction process the value of the
original item was reduced. The law would deter the theft
and assisted law enforcement in detaining scrap metal
thieves. He concurred with the changes.
Co-Chair Austerman expressed concerns that the required
reporting was onerous for the dealer. He stated that he had
a problem with the bill but was open to discussion.
Speaker Chenault maintained that reporting requirements
were similar for pawn shops and protected pawn shop
operators. He elucidated that stolen property found in pawn
shops was confiscated resulting in a loss for the pawn shop
owner who purchased the property. He found that the
recording requirements for pawn shops were an "unfortunate
side of doing business." He emphasized that the law was
designed to protect the business owner and ensured that
what the owner purchased provided a monetary return.
8:43:12 AM
Representative Wilson concurred with Co-Chair Austerman.
She observed that the scrap or junk yard businesses in the
Fairbanks were small. She favored fewer reporting
requirements. She felt that anyone currently dealing or
selling scrap metal legally was conducting honest business
and the problem was with selling scrap metal illegally. She
wondered how the bill would assist in apprehending illegal
sales of scrap metal.
TOM WRIGHT, STAFF, REPRESENTATIVE CHENAULT, referred to an
owner of a scrap and junk metal dealer to best answer the
question.
Representative Wilson wanted to avoid over-regulating the
dealers operating legally in order to prevent illegal
actors.
Representative Costello stated that she had a friend who
created art work out of scrap metal. She cited page 4, line
3 of the CS and read the words "with the intent to deprive
another." She wondered whether the provision applied to
stolen art created from scrap metal.
Mr. Wright guessed that stolen art might be covered under
other statutes and was uncertain whether the bill's
provisions applied to the scenario.
Vice-Chair Neuman echoed Co-Chair Austerman's sentiments.
He reported that he was working on a pawn shop issue in his
district regarding reporting requirements and a stolen
item. An item discovered to be stolen lead to onerous
consequences for the pawn shop owner. He had a problem with
burdening "good hardworking Alaskans" or taking away their
rights.
Vice-Chair Neuman asked for clarification regarding the
crime for stealing scrap metal.
Co-Chair Stoltze interjected that the Department of Law
(DOL) would best answer the question.
Speaker Chenault restated that some scrapyard dealers
already filled out forms similar to pawn shops. He
understood that new laws were burdensome to new businesses
but he believed that the value of the reporting
requirements protected the scrapyard dealer from thieves.
He reiterated that if scrap metal was confiscated the money
paid by the scrapper was lost. He thought that the
requirements were more helpful in protecting the business
owner than they were burdensome.
Co-Chair Stoltze stated that one concept of the issue that
was overlooked was the damage caused by the removal of the
metal. The cost of the damage could "far exceed the value
of the scrap metal." He understood the burden of the
recording requirements but current law did not "adequately
recognize" the damage from the removal of copper wire from
walls or other destruction to personal property caused by
the metal removal.
Speaker Chenault replied that scrap metal theft not only
affected individuals but consumers as well. He hypothesized
a situation where copper wire was stolen from a utility
company; the consumers ultimately would pay the cost. He
reiterated that the provision protected owners of precious
metals and scrap dealers.
Representative Holmes supported the bill. She relayed that
she had heard of the problem from utility companies and
contractors in her district and statewide. She added that
when metals were stolen, construction projects were delayed
or halted and utility service were interrupted. She cited
the document from the bill packet titled: "Recycling Today
Scrap Metal Theft Guide" (copy on file) and noted that many
states required much more information for record keeping
including fingerprinting and photographs. She relayed that
Alaska was one of two states that had no requirements. She
did not want to burden small businesses but believed that
metal theft was placing a "huge burden" on contractors,
utility companies, and the public. She thought that the
problem was well documented.
Representative Edgmon echoed Representative Holmes'
comments. He shared that the way to profit when selling
copper was in selling large quantities of several hundred
pounds for each sale. He knew a legal scrap metal collector
who informed him that the business "attracted unsavory
characters" and that the illegal activity was "underground"
with large sums of money was involved. He supported the
restrictions.
8:55:41 AM
Representative Thompson supported the CS. He offered that
contractors had materials stolen from their business and
job sites. He believed that people wanted law enforcement
to apprehend the thieves who stole it so collecting the
information on the form was necessary to corroborate
accurate information.
Representative Gara stated that the utility companies
contacted him about the problem and he understood the need
for the legislation. He expressed concerns regarding
turning another misdemeanor into a felony. He pointed to
page 3, lines 21 to 22 and read; "…with the intent to
damage property of another, the person damages property of
another in an amount of $500 or more." He thought that the
value of the metal stolen was the critical amount for the
prosecutor to determine the charges and not based on the
amount of the sale to the pawn shop dealer. He wondered
whether the criminal provision in the CS was necessary and
whether the crime should be turned from a misdemeanor into
a felony.
Mr. Wright stated that Anne Carpeneti, Assistant Attorney
General, Legal Services Section-Juneau, Criminal Division,
and (DOL) was available to answer legal questions.
Co-Chair Stoltze OPENED public testimony.
PHIL STEYER, DIRECTOR OF GOVERNMENT RELATIONS, CHUGACH
ELECTRIC, ANCHORAGE (via teleconference), supported the CS.
He stated that he worked with a number of contractors,
other utility companies, and scrap metal dealers in
consultation with law enforcement to shape the provisions
in the CS. He noted that the group examined other state
laws as guidance in crafting the legislation. He urged the
committee to support the legislation.
JOHN MACKINNON, EXECUTIVE DIRECTOR, ASSOCIATED GENERAL
CONTRACTORS OF ALASKA, ANCHORAGE (via teleconference),
favored the CS. He reported that very expensive copper wire
thefts took place at remote project sites. He relayed that
Alaska was the only state that did not have a law related
to the issue. He gathered together utility companies,
contractors, and other "stakeholders" to work cooperatively
in crafting the legislation. The provisions proved
successful in reducing theft when enacted in other states.
The recording was not overly burdensome and many of the
scrap dealers were already collecting the information. He
believed the requirements were an "effective tool" for law
enforcement to apprehend the criminals.
Co-Chair Austerman offered that smaller communities
struggled to get rid of scrap metal. He asked if the
problem occurred primarily on the road system or state
wide.
Mr. MacKinnon replied that the problem occurred among rural
utilities especially the theft of copper wire from rural
utility companies. He stated that the copper wire stolen
from transformers and other apparatus posed a significant
public safety hazard causing shock or electrocution.
Co-Chair Austerman remarked that the bill would not stop
the metal theft.
Mr. MacKinnon added that small incidental sales were not
affected by the bill. Much of the scrap metal in rural
Alaska were comprised of large pieces of iron therefore,
ferrous metals were exempted. Aluminum cans were also
exempted. The legislation targeted the scrap metals with
the highest values. Most of the metal theft was drug
related because the price for copper was high. He restated
that the law was effective in other states.
Representative Wilson stated that people could have scrap
metal on their own property or collect scrap metal and sell
directly to a contractor. She wondered how the law would
catch thieves when it was currently possible to sell scrap
metal without using a scrap metal dealer.
Mr. MacKinnon answered that currently laws did not exist to
prosecute scrap metal sellers operating on the "margins of
the business." The bill gave law enforcement the "tools"
to enforce the law and reduce scrap metal theft.
Representative Wilson believed that the CS was "penalizing
the wrong people."
9:05:56 AM
LOUISE BRAY, SCHNITZER STEEL INDUSTRIES, ANCHORAGE (via
teleconference), testified in favor of the bill. She
elaborated that Schnitzer Steel Industry was a large
publicly traded company with a facility in Anchorage. The
industry was comprised of very small to large operators.
She believed that basic record keeping facilitated the
removal of "bad actors" from the scrap metal business. The
industry did not want its reputation tainted by dealers
operating illegally and purchasing stolen materials. She
noted that the basic record keeping requirements were not
overly burdensome. She worked closely with Alaska General
Contractors (AGC) and utility companies to craft a bill
that was not onerous to the dealers and was a tool for law
enforcement. She believed the CS leveled the playing field
for legal participants in the industry.
NIC BALLARD, GENERAL MANAGER, SCHNITZER STEEL INDUSTRIES,
ANCHORAGE (via teleconference), testified in support of the
legislation and concurred with previous testimony. He
clarified that scrap metals were required to be sold
through a dealer to get to market or an end user.
Co-Chair Stoltze CLOSED public testimony.
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES
SECTION-JUNEAU, CRIMINAL DIVISION, DEPARTMENT OF LAW,
commented on the CS. She cited page 4, lines 3 through 6.
She related that the provision took two crimes, one being
theft and the other criminal mischief and turned them into
one crime. She perceived that there would be less
flexibility when prosecuting the crimes. She elucidated
that two separate societal interests were at issue; one
regarding theft of personal property and the other
concerned harming personal property. The department thought
the provision was "puzzling."
Representative Thompson hypothesized a scenario where an
empty house for sale was damaged in the process of the
illegal extraction of copper. He asked whether two crimes
were committed.
Ms. Carpeneti replied in the affirmative. She stated that
the combined crimes would require the use of the new crime
in the CS instead of prosecuting based on both the general
crimes of theft and criminal mischief.
Co-Chair Austerman observed that the CS was implementing
new criminal laws without requiring that the dealers were
licensed. He wondered how the scrap metal businesses were
tracked.
9:11:55 AM
MATT FONDER, DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE,
ANCHORAGE (via teleconference), replied that DOR searched
prior decades revenue records and was unable to find any
revenue reporting from junk yard or scrap metal dealers
from past licenses issued. Currently, the state was unable
to track any scrap dealer businesses. He thought that
requiring a license was sensible especially in light of the
fact that all of the other businesses in the state were
required to operate under a license.
Representative Wilson understood that the Department of
Commerce, Community and Economic Development (DCCED) issued
licenses and dealers were required to be licensed. She
asked whether existing laws applied to scrap metal crimes
without passage of the legislation.
Ms. Carpeneti answered in the affirmative and restated that
the crimes that applied were theft and criminal mischief.
Representative Wilson supported the idea of requiring the
dealer to check a driver's license for personal information
verification. She asked whether the dealer was required to
lock up the personal information collected from the
sellers.
Ms. Carpeneti replied that the legislation required that
the information in electronic or paper form needed to be
stored for a period of five years. She did not know whether
the bill addressed the security of the information.
Representative Wilson expressed concern over the dealer's
storage of personal information. She asked if other
businesses, besides pawn shops were subjected to record
inspection by law enforcement without a warrant or advance
warning.
Ms. Carpeneti offered to provide further information. She
was only aware of records inspection for pawn shops.
Representative Holmes confirmed that scrap metal dealers
were licensed under DCCED. She asked questions related to
Subsection 4 and its duplicative nature. She wondered
whether the existing statutes covered all of the different
scenarios under which scrap metal could be stolen.
Ms. Carpeneti responded that a definitive answer depended
on the facts of the crime but felt that current law
provided adequate coverage at the same level of offense.
Under current law property damage or theft of $500 or more
was a class C felony of theft or criminal mischief in the
third degree. She reiterated that except for laws dealing
with a culpable mental state if applicable, current laws
adequately covered the crimes.
Representative Holmes cited page 3, lines 21 to 22 "with
the intent to damage property of another, the person
damages property of another…." She referred to the words in
the new subsection 4 "with the intent to deprive another of
the metal…." She wondered whether the thief could be
prosecuted under subsection 1, if the intent was to steal,
but not necessarily damage property (criminal mischief) and
the copper wire was worth less than $500. She asked whether
the new subsection was necessary.
Ms. Carpeneti replied that she maintained doubt about the
current statutes covering culpable mental states and
suggested possible changes in the section regarding
culpable mental states. She remarked that adding the
specific theft provision prevented the prosecutor from
pressing charges for two crimes and made the charges
"harder to prove."
Representative Holmes suggested additional work on the CS.
Co-Chair Stoltze apologized that the members did not see
the CS in advance. He thought that the legislation was "a
good vehicle" to address the issue but he wanted to ensure
the issue was properly addressed. He stated that he would
hold the bill.
Ms. Carpeneti shared that she had heard concerns expressed
over the ability to get restitution for damages caused by
metal theft. She suggested examining the statutes regarding
restitution to determine whether they could be made more
specific for the crime.
Representative Gara asked what the threshold that turned
theft into a felony was
Ms. Carpeneti answered that the amount was $500.
Representative Gara pondered whether a theft of a $5000
role of copper wire that was sold for scrap metal for $499
was a felony theft.
Ms. Carpeneti responded in the affirmative.
Representative Gara asked whether criminal mischief charges
applied to any damage over $500 that was caused to extract
the metal out of a facility.
Ms. Carpeneti replied in the affirmative. The damages would
be charged as a felony if the damage was over $500.
9:23:23 AM
Co-Chair Stoltze surmised that the metal theft crimes were
currently being prosecuted as felonies.
Ms. Carpeneti replied in the affirmative. She qualified
that it depended on the facts.
Co-Chair Austerman commented that he had concerns with the
bill. He understood the purpose of the legislation but was
concerned the CS would affect small communities with small
businesses attempting to clean up and remove scrap metal.
He stated that in Kodiak it was difficult to move scrap
metal out of the community.
Representative Holmes asked whether scrap metal dealers
were licensed as a business through DCCED.
DON HABEGER, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, responded that a
business license was required for scrap metal dealers.
HB 305 was HEARD and HELD in committee for further
consideration.
HB 306 was SCHEDULED but not HEARD.
ADJOURNMENT
9:28:37 AM
The meeting was adjourned at 9:28 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 306 House Finance Members QA part2.pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 306 |
| HB 305 Sponsor Statement-CSHB 305(FIN).pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HB 305 Scrap Metal Media.pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HB 305 Scrap Metal Laws State by State.pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HB 305 Support.pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HB 305 Sectional Analysis-P CSHB 305(FIN).pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HB 305 CS WORKDRAFT FIN P-VERSION.pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HB 305 SAMPLE TICKET.pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HB 305 CS APAsupport.pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HB305 - Metal Theft Legislation.pdf.pdf |
HFIN 3/18/2014 8:30:00 AM |
HB 305 |
| HJR 18 Explanation of Changes.pdf |
HFIN 3/18/2014 8:30:00 AM |
HJR 18 |
| HJR 18 CS WORKDRAFT FIN N version.pdf |
HFIN 3/18/2014 8:30:00 AM |
HJR 18 |