CS FOR HOUSE BILL NO. 305(FIN) "An Act relating to the records of metal scrappers; repealing the requirement that a junk dealer or metal scrapper obtain a license; and providing for an effective date." TOM WRIGHT, STAFF, REPRESENTATIVE MIKE CHENAULT, read from a sponsor statement: HB 305 as originally introduced proposed to repeal a pre-statehood requirement for junk dealers and metal scrappers to obtain a state license. Research could not identify any licenses which were issued under the statute and therefore, it was felt the statute served no public purpose and should be repealed. Although the original intent of the legislation was to eliminate an unneeded law from the books, the process led to the identification of an area where Alaska state law was deficient and needed improvement. The junk dealer statute was discovered during discussions by a working group of contractors, utilities and scrap metal dealers looking for ways to deter metal theft in Alaska. Due to the higher value of metals such as copper, metal theft has been increasing nationwide. However, Alaska remains as the only state without a law specifically targeting metal theft. Thieves often target utilities, construction sites, and other locations with significant volumes of copper. In some cases, the value of the scrap metal stolen pales in comparison to the damage done by thieves. For utilities, theft can result in life threatening situations, service outages for many customers, and be very costly to repair. For construction sites, significant costs and project delays can result from theft. The main goal of metal theft laws is to provide law enforcement with additional tools to track down metal thieves as well as provide a deterrent to the crime by closing down avenues to sell stolen property. In many cases, other states have adopted very comprehensive laws, which are costly to implement as well as burdensome to businesses. This bill takes a different approach. Through the input of a those impacted (utilities, contractors, law enforcement, and scrap metal dealers), the legislation implements those tools the working group felt would be most effective in a manner which add as little burden as possible. Specifically, the bill adds new recording keeping requirements on the sale of scrap metal. Basic information includes date, time, location, and value of the metal as well as information about the seller including the name, address, driver's license number, and vehicle plate number. The legislation also requires the seller to sign a statement that the metal is not stolen. 2:31:43 PM Co-Chair Meyer clarified that the committee was working with version R of the bill. Mr. Wright replied in the affirmative. Senator Dunleavy understood that the bill would not prevent someone from selling wire or metal to someone else. Mr. Wright replied that it would not. Senator Dunleavy thought that there could be a way around the law. Mr. Wright agreed. He surmised that there were ways to circumvent nearly any law. 2:33:01 PM Co-Chair Meyer asked how many junk dealers or scrappers there were in the state. Mr. Wright deferred the question to available experts in the field. Co-Chair Meyer wondered if a scrappers/junk dealer license was the same as business license. Mr. Wright replied in the affirmative. 2:33:33 PM LOUISE BRAY, SHNITZER STEEL, TACOMA, WASHINGTON (via teleconference), spoke in support of HB 305. She felt that the bill was a first small step to combat metal theft and to provide additional tools for law enforcement to track thieves. She believed that there would always be non- compliant dealers, but once the law was implemented those dealers would be easier to locate. 2:36:47 PM PHIL STEYER, CHUGACH ELECTRICAL ASSOCIATION, ANCHORAGE (via teleconference), testified in support of HB 305. He stated that the Chugiak Electrical Association had been the victim of theft and property damage. He said that the cost of repairs for the damage and lost business was expensive inconvenient. 2:39:19 PM JOHN MACKINNON, EXECUTIVE DIRECTOR, ALASKA ASSOCIATION OF GENERAL CONTRACTORS, ANCHORAGE (via teleconference), testified in support of HB 305. He stated that the Alaska Association of General Contractors' hoped that the legislation would make to more difficult for thieves to sell scrap metal without adding more regulations or requirements for dealers. 2:41:17 PM AL BARRETTE, SELF, FAIRBANKS (via teleconference), spoke against the reporting requirements in HB 305. He questioned the constitutionality of the portion of the bill that would require that records be kept available for inspection by law enforcement during normal business hours. He opined that he should have to collect data or file burdensome paperwork for the sake of public safety. 2:44:27 PM Co-Chair Meyer CLOSED public testimony. Senator Bishop inquired whether the metal scrappers and dealers had been involved in crafting the bill. Mr. Wright replied yes. Vice-Chair Fairclough queried to what extent the record keeping proposed in the legislation would inconvenience business owners. 2:46:46 PM REPRESENTATIVE MIKE CHENAULT, replied that it was not the sponsor's intent make the reporting any more burdensome than what was considered good business practice. He asserted that it would be best for businesses to keep accurate records. He noted that if enforcement came into a pawn shop and found that things were stolen, the items were confiscated and given back to the rightful owner, resulting in a loss for the store owner; proper record keeping offers the proprietor the ability to recoup the costs from whoever pawned the item. He understood that there would be more paperwork and acknowledged the concerns; however, it was better business practice to keep the information regarding customers. He stressed that the legislation was an attempt to address theft concerns in the most innocuous way possible. 2:48:49 PM Vice-Chair Fairclough questioned the reasoning behind repealing the licensing requirement of junk dealers and metal scrappers. Mr. Wright replied that it was handed over as an arcane law that pre-dated statehood. He cited the Legislative Research Services Research Brief (copy on file): Because the licensing of junk dealers and metal scrappers involved the payment of fees, the Department of Revenue inherited the provision through passage of duties from territorial offices to the newly created state offices. Mr. Wright furthered that the law was not enforced by DOR and that the issue was now the per view of the Department of Commerce, Community and Economic Development (DCCED) under their business license division. Vice-Chair Fairclough stated if the number of metal scrappers/dealers was unknown, and there were increasing instances of metal scrappers buying stolen merchandise, then it would be in the state's best interest to require then to hold a license under DOR. Representative Chenault replied that the state did know how many there were and that they were all licensed under DCCED. He said that the original intent of the legislation was to terminate the section pertaining to DOR and not DCCED. 2:51:43 PM CSHB 305(FIN) was HEARD and HELD in committee for further consideration. 2:51:54 PM AT EASE 2:52:20 PM RECONVENED