Legislature(2023 - 2024)GRUENBERG 120
05/04/2023 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB116 | |
| HB118 | |
| SB12 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 116 | TELECONFERENCED | |
| *+ | HB 118 | TELECONFERENCED | |
| + | SB 12 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 118-CATALYTIC COVERTERS: SALE/POSSESSION
3:12:28 PM
CHAIR SHAW announced that the next order of business would be
HOUSE BILL NO. 118, "An Act relating to the sale and possession
of used detached catalytic converters; and establishing the
crime of possession, sale, or purchase of a used detached
catalytic converter."
3:13:11 PM
REPRESENTATIVE DELENA JOHNSON, Alaska State Legislature, prime
sponsor, presented HB 118. She paraphrased the sponsor
statement [included in the committee packet], which read as
follows [original punctuation provided]:
Since the beginning of the pandemic, the theft of
catalytic converters from vehicles has soared. Auto
insurers are publishing warnings as they process
millions of dollars in losses. In between the years of
2019 and 2022, the National Insurance Crime Bureau
(NICB) had seen a catalytic converter theft spike of
over 1,200%.
According to the NICB, in 2019, only 3,389 catalytic
converter thefts were reported nationwide. In 2020,
the reported number spiked to 14,433. In 2021, the
number went up to 65,400, and in 2022, the numbers
skyrocketed up to 153,000 reported stolen converters.
It is important to note that these numbers only come
from reported policyholders' claims. These numbers are
considered very underreported for two reasons;
1) the amount of people without car insurance who
cannot file a claim; and,
2) if a police report was made before the insurance
claim, it was officially documented under missing car
parts, not specific to catalytic converter theft.
Thirty-two states have adopted or amended laws to
combat catalytic converter theft, and 11 more states
are anticipated to at least introduce legislation to
combat thefts, by requiring identifying information
for anyone trying to sell used catalytic converters.
House Bill 118 gives statutory authority to Alaska law
enforcement to charge and prosecute individuals
unlawfully possessing used catalytic converters. It
also requires businesses and individuals purchasing
used catalytic converters to document and maintain
information about persons possessing and selling used
catalytic converters to said business.
3:15:31 PM
SAVAYA BIEBER, Staff, Representative DeLena Johnson, Alaska
State Legislature, gave introductory remarks on HB 118, on
behalf of Representative Johnson, prime sponsor. She stated
that the bill would add statutory language to require scrap
metal dealers to register with the Department of Public Safety
(DPS) prior to purchasing a used detached catalytic converter.
Should the bill pass, scrap metal dealers would be required to
maintain a paper or electronic record of transactions that
included time, location, and proof of an in-person transaction.
Scrap metal dealers would be required to keep record of the
registry for five years, she added. Furthermore, dealers would
be required to make their records available to law enforcement
during regular business hours.
3:17:21 PM
CHAIR SHAW opened invited testimony.
3:17:34 PM
TREVOR STEFANO, Owner, CSI Protect AK, gave invited testimony on
HB 118. He reported that Oregon law enforcement busted a 14-man
multistate crime ring with 54,000 catalytic converters. He said
the lucrative underground market existed because of a lack of
regulations. He shared that his business, CSI Protect AK,
etched identifiers into metal catalytic converters, in addition
to registering the marked catalytic converters into a global
database used in over 33 countries. Law enforcement was given
access to the database, thereby allowing stolen converters to be
identified and traced back to their owners. He cited Section 4
of the bill and recommended changing the class A misdemeanor to
a class C felony to deter bad actors and prevent further
clogging of the judicial system. Additionally, he suggested
including a definition of mechanic in the bill, as referenced
in Section 5.
3:28:25 PM
HOWARD HANDLER, National Insurance Crime and Borough (NICB),
gave invited testimony on HB 118. He read the following
prepared remarks:
The National Insurance Crime Bureau (NICB) is a
national, century-old, not-for-profit organization
supported by approximately 1,200 property and casualty
insurance companies, including many who write business
in Alaska. Working hand-in-hand with our member
companies and Alaska state and local law enforcement,
we help to detect, prevent, and deter insurance
crimes, including vehicle theft.
Catalytic converter theft has skyrocketed in recent
years in part due to the significant rise in the price
of various precious metals, including rhodium,
platinum, and palladium. All are used in the
construction of catalytic converters. Criminals are
seizing the opportunity to profit off these increased
prices by removing the catalytic converter from
vehicles in relatively easy fashion and selling
the stolen part on the black market. The component
precious metals can be recycled into new products.
Nationally, catalytic converter thefts more than
quadrupled from 3,389 in 2019 to 14,433 in 2020.
Thefts jumped dramatically yet again to over 52,000 in
2021, an increase of 1,215% since 2019.
Additionally, installing a replacement catalytic
converter can cost thousands of dollars. Because
thieves try to remove the converters as quickly as
possible, their hastiness often causes higher repair
costs due to incidental damage. Moreover, businesses
with large vehicle fleets, such as vehicle dealerships
or utility companies, are often targeted due to the
number of potential marks in a small area. Thefts from
commercial carriers can lead to replacement costs in
excess of tens of thousands of dollars, and additional
lost revenue due to halted operations.
House Bill 118 seeks to curb catalytic converter
thefts by, among other things: criminalizing
possession of a used catalytic converters in certain
instances; limiting purchases of used catalytic
converters to scrap metal dealers; and imposing
certain record keeping requirements on scrap metal
dealers. This bill will help deter catalytic converter
thefts by discouraging illegal secondary market sales
and providing law enforcement with additional records
to help investigate cases.
Accordingly, we respectfully request your support for
HB 118
We thank you for scheduling a hearing and for
considering our views as you deliberate the merits of
this bill. We strongly encourage you to utilize NICB
as a resource and partner in the fight against
catalytic converter theft. If you have any questions
or need additional information, please contact me at
hhandler@nicb.org or 847-544-7083.
3:31:33 PM
The committee took a brief at-ease.
3:32:41 PM
CHAIR SHAW opened public testimony on HB 118.
3:33:19 PM
ARTY FONOP, Owner, Eagle Eye Secure Storage, testified in
support of HB 118. He stated that he had been personally
affected by catalytic converter theft and shared his experience,
noting that the ability to turn the devices into cash fueled the
crime. He explained that scrap dealers didnt require proof of
ownership from their customers, which was problematic if the
converters were stolen. He shared his belief that every vehicle
owner in Anchorage would benefit from the passage of HB 118.
3:35:56 PM
CHAIR SHAW closed public testimony on HB 118. He sought
questions from committee members.
3:36:26 PM
REPRESENTATIVE STORY directed attention to page 4, line 7 of the
bill and asked how DPSs central registry of scrap metal dealers
would work. She asked whether an educational component was
needed.
3:37:33 PM
MS. BIEBER directed the question to the department.
3:38:19 PM
CAPTAIN CORNELIUS SIMS, Alaska State Troopers, Department of
Public Safety (DPS), acknowledged the necessity of an
educational component for the scrap metal dealers. He suggested
that an online registry could be developed, in addition to a
paper form option that could be mailed into the department.
REPRESENTATIVE STORY sought to confirm that scrap metal dealers
would be statutorily required to keep a separate registry.
PAM HALLORAN, Division of Administrative Services, Department of
Public Safety (DPS), referred to the fiscal note, which
indicated that DPS would need to develop and implement an
application to develop a central registry for persons engaged in
the business of purchasing the converters. She shared her
understanding that law enforcement would engage with people
purchasing the converters while the department would build and
develop the registry.
3:40:45 PM
CAPTAIN SIMS, in response to Representative Story, confirmed
that law enforcement would develop a registry separate from that
of the scrap metal dealers.
CHAIR SHAW requested an explanation of the fiscal note.
MS. HALLORAN reported that the fiscal note reflected an amount
of $141,700 in 2024 and $123,300 in 2025 to create a criminal
justice specialist position to develop and maintain the new
database.
REPRESENTATIVE STORY asked whether there would be a registration
fee.
MS. HALLORAN said fees had not been discussed.
REPRESENTATIVE STORY asked why the bill stipulated a five-year
timeframe for record retention.
MS. HALLORAN offered to follow up with the requested
information.
3:43:38 PM
REPRESENTATIVE CARPENTER referred to the exclusions in Section
5, subsection (c)(2) of the bill. He asked what documentation
referred to and whether a receipt and registration for the
vehicle from which the catalytic converter came from would
suffice.
MS. HALLORAN deferred to Captain Sims.
3:44:47 PM
CAPTAIN SIMS was unsure of the answer. He shared his
understanding that a used catalytic converter would not be added
to the registry if the person turning it in for profit provided
proof of ownership.
REPRESENTATIVE STORY expressed her concern about criminalizing
the possession of a detached catalytic converter.
3:47:45 PM
REPRESENTATIVE CARPENTER asked how ownership of a catalytic
converter could be proven with documentation, per Section 5 and
Section 3 of the bill.
CAPTAIN SIMS did not know the answer.
REPRESENTATIVE C. JOHNSON referred to the testimony from Mr.
Stefano who owned a company that tagged catalytic converters.
Additionally, she reported that current carmakers placed the
vehicle identification number (VIN) on catalytic converters.
3:51:55 PM
REPRESENTATIVE CARPENTER asked whether the theft of catalytic
converters could be prevented by prohibiting the sale of these
converters to scrapyards.
REPRESENTATIVE D. JOHNSON suggested that the crime was often
drug inspired. She said the legislation was modeled after a
bill in Tennessee with the intent to provide a tool for law
enforcement. She acknowledged that Representative Carpenter had
identified an issue that required further examination.
3:54:11 PM
REPRESENTATIVE STORY asked whether DPS could provide statewide
rates of catalytic converter theft.
3:54:50 PM
CHAIR SHAW announced that HB 118 would be held over.