Sheriff -Coroner. 701 Ocean Street, Suite 340, Santa Cruz, CA (831) FAX: (831) Steve Robbins Sheriff-Coroner

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1 0111 I County of Santa Cruz Sheriff -Coroner 701 Ocean Street, Suite 340, Santa Cruz, CA (831) FAX: (831) Steve Robbins Sheriff-Coroner March 18,2008 Agenda: April 15, 2008 Board of Supervisors County of Santa Cruz 701 Ocean Street, Room 500 Santa Cruz, California RE: Ordinance related to metal theft Dear Members of the Board: On March 18, 2008, your Board received a progress report related to the development of a proposed ordinance regarding metal theft issues. This letter provides additional information, including an account of recent legal challenges to similar ordinances, and requests that your Board accept a report regarding consideration of an ordinance relating to the licensing of junk dealers and scrap metal and direct this office to work in conjunction with County Counsel to further research this issue and provide a future report back. Background As your Board is aware, metal theft is a concern to a number of jurisdictions. The rising price of metals and the increased demand for copper, aluminum, and other non-ferrous metals are fueling a worldwide wave of scrap metal theft. Existing state law requires scrap metal dealers and recyclers to maintain a written record of all sales and purchases made during the course of their business. These businesses are also required to allow periodic inspection of their premises and produce their records of sales and purchase transactions for inspection by the Sheriffs Office or Police Department. The problem with the current law is that it is insufficient to stem the increase of metal thefts. The recent spikes in copper and aluminum prices have made the theft of these metals and other materials more attractive. While most scrap dealershecyclers conscientiously follow existing state law and industry standards, others ignore the reporting requirements and purchase

2 01 12 questionable goods. Additional regulations are necessary to discourage these thefts and to give law enforcement a better chance to identify stolen pro pe rty. The proposed ordinance for your Board s consideration would require scrap metal dealers/recyclers doing business in the unincorporated area of Santa Cruz County to obtain a special permit, submit to a background check, and show proof that they are in compliance with the California Weigh Master s I ice n si ng and reporting require men t s. Scrap meta I d ea le rs/recycle rs wo u Id also be required to inform law enforcement whenever there is an attempted sale of any junk that reasonably appears to be used by governments, utilities, railroads, or for specific purposes, such as guardrails, manhole covers, high voltage transmission lines, and other items. A model ordinance to address this statewide issue was developed by the California Farm Bureau and the California State Sheriffs Association. The Sheriffs Office has used portions of the model ordinance and worked with County Counsel, the Treasurer-Tax Collector s Office, Auditor Controller s Office and County Administrative Office to develop language consistent with other County ordinances. Cu rrent Developments At this time, local city/county ordinances are being challenged regarding metal theft regulations. Fresno County has appealed an order prohibiting enforcement of certain portions of its ordinance regulating scrap metal dealers. However, in a recent published opinion, the 5th District Court of Appeal affirmed the trial court decision and concluded that... the purchase of scrap metal by recyclers...are matters of statewide concern that our Legislature has comprehensively addressed through various provisions of the state s Penal and Business and Professions Codes, leaving no room for further regulation at the local level. Although the Sheriffs Office still supports a local ordinance, it may be advisable for your Board to have our office work with County Counsel to further review this issue and provide a report back at budget hearings.

3 0173 It is therefore recommended that your Board accept this report regarding consideration of an ordinance relating to the licensing of junk dealers and scrap metal recyclers and request the Sheriff's Office to work with County Counsel to provide a report back at budget hearings. Steve Robbins S heriff-coroner RECOMMENDED: Susan A. Maurkllo 8 County Administrative Officer cc: Sheriff-Coroner, Treasurer-Tax Collector, County Counsel, Auditor- Controller and CAO J

4 01 14 ORDINANCE NO. AN ORDINANCE ADDING CHAPTER 5.38 TO THE COUNTY CODE RELATING TO THE LICENSING OF JUNK DEALERS AND SCRAP METAL RECYCLERS The Board of Supervisors of the County of Santa Cruz ordains as follows: SECTION I The Santa Cruz County Code is hereby amended by adding Chapter 5.38 to read as follows: CHAPTER 5.38 JUNK DEALERS AND SCRAP METAL RECYCLERS Sections: Intent and purpose. Definitions. Exemptions. Reporting. Seller s age limit. Hours. Holding period for metal. Payment. Special consideration for certain transactions. Business license requirement. Registration requirement. Discipline procedures. Penalty Intent and purpose. The purpose of this Chapter is to provide regulation of junk dealers and scrap metal recyclers. This chapter is adopted in supplementation of Business and Professions Code Sections through This chapter is not intended to supersede the provisions of these statutes. Any conflict that may exist between this chapter and state laws shall be resolved in favor of the latter. Nothing contained herein shall relieve any person or legal entity of obligations contained in the Business and Professions Code or other provisions of state or local law Definitions. For the purpose of this chapter, certain words and phrases shall be interpreted as set forth in this section, unless it is apparent from the context that a different meaning is intended. 1

5 01 15 A. Junk means any and all secondhand and used machinery and all ferrous and nonferrous scrap metals and alloys, including any and all secondhand and used hrniture, pallets, or other personal property, other than livestock, or parts or portions thereof. B. 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 in Chapter 2 (commencing with Section 14502) of Division 12.1 of the Public Resources Code. C. Junk dealer includes any person engaged in the business of buying, selling and dealing in junk, any person purchasing, gathering, collecting, soliciting or traveling about from place to place procuring junk, 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, and any person employed by a business subject to licensing under this chapter. D. Junk yard includes any yard, plot, space, enclosure, building or any other place where junk is collected, stored, gathered together and kept. E. Recycler means any processor, recycling center, or non-certified recycler, as those terms are defined in Chapter 2 (commencing with Section 14502) of Division 12.1 of the Public Resources Code, who buys or sells scrap metal that constitutes junk, as defined in Business and Professions Code Section Exemptions. This chapter shall not apply to any of the following: A. Secondhand fkniture merchants; B. Pawnbrokers; C. Secondhand car dealers or merchants in connection with automobile and motor vehicle sales agencies but not carried on and conducted in conjunction with a junk yard; D. Persons engaged in the business of selling new automobile tires or batteries or other equipment taking in part payment used articles of the same kind and thereafter selling or disposing of the same; E. Secondhand oil well supply and equipment dealers not conducting or carrying on their business in connection with a junk yard; F. Secondhand clothing merchants and ragpickers; or G. Recyclers who do not engage in the purchase of Junk, Scrap Metals and Alloys, or who only receive Junk, Scrap Metals and Alloys on a donation basis with no cash or property reimbursement made in exchange for receiving Junk, Scrap Metals and Alloys. 2

6 Reporting. A. Junk dealers or recyclers shall report to the Sheriff of Santa Cruz County at the Office of the Sheriff, at least once a week, on a form provided by the Sheriff, a record of all sales and purchases of the previous seven (7) days. The report shall contain the information required by this chapter and any additional information required by the Sheriff as shown on the forms. A second invoice copy shall be held by the dealer in numerical or chronological order for two (2) years from the date of the transaction. B. The report shall at a minimum contain the following information: 1. The name, business name, business address, telephone number, facsimile number, and electronic mail address; 2. The place and date of each sale or purchase of junk made in the conduct of person's business as a junk dealer or recycler; 3. A photocopy of the sellers valid government issued picture identification card, and 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; 4. 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; 5 e A full and complete description of the item or items of junk purchased or sold, including the item type, quantity, length, diameter, size, brand, model, manufacturer, and identification number; 6. 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 it from, as shown on a signed transfer document; and 7. The fingerprint of the right hand index finger, unless such finger is missing, in which event the print of the next finger in existence on the right hand shall be obtained with a notation as to the exact fmger printed, of the person from whom junk is received Seller's age limit. It is unlawful for any junk dealer or recycler to purchase, or otherwise acquire, any junk fiom any person known, or reasonably should be known by the junk dealer or recycler, to be under the age of eighteen years Hours. It is unlawful for any junk dealer or recycler to conduct business as a junk dealer within this County between the hours of seven p.m. of one day and seven a.m. of the next day. P Holding period for metal. Every reporting business, as described in Section of this chapter, dealing in the purchase or transfer of scrap metals, as defined in this chapter, shall * i

7 01 17 retain in their possession for a period of ten (10) days all scrap metal in the same size, shape and condition in which it was received. The ten (10) day holding period shall commence with the date the report of acquisition was made by the reporting business to the Sheriff or its authorized designee A. Pay men t. It is unlawful for any junk dealer or recycler to make payment for the purchase of junk, in excess of ten dollars ($lo), to any person except by paper draft or check after a minimum period of seven (7) days from the date of purchase. This holding period shall commence with the date of the report of acquisition was made to the Sheriffs Office by the dealer. B. During the ten (10) day holding period, every dealer shall provide any items reported under Section for inspection by the Sheriff on request. Property subject to inspection which is stored off the dealer s business premises shall, upon request for inspection, be produced at the dealer s business premises within one (1) business day of the request Special consideration for certain transactions. A. Every junk dealer or recycler shall immediately notify the Sheriffs Department by telephone, or other means likely to reach the Sheriffs Department without delay, of the sale or purchase of any junk which reasonably appear to be used only by governments, utilities, railroads, or for specific purposes, such as guardrails, manhole covers, aluminum irrigation pipe, high voltage transmission lines, historical markers, cemetery plaques, light poles, and bleachers. B. Every junk dealer or recycler shall hold all scrap metals described in this section in its custody in the same condition in which they were received for a minimum of ten (10) days before the scrap metals and alloys may be released or disposed of Business license requirement. A. It is unlawful to own, maintain, or operate a junk dealing or recycling business without first making an application for, receiving, and maintaining a valid license from the Treasurer-Tax Collector. 3. Any person seeking a business license hereunder shall make application to the Treasurer-Tax Collector as follows: I. The application shall list the names, social security numbers, dates of birth, and current residence addresses of the applicant and each person with an ownership interest in the business or the property on which the business is located; -. 3 The application shall list each business name under which, and the place where, each owner has owned or conducted a similar business within twelve (12) months immediately preceding the date of the application; 3. The application shall include the address of where the business for which the license is sought will be located; 4

8 The applicant shall list the name of each individual employed, whether or not compensated, in the maintenance or operation of the business; 5. Upon submission of a complete application for a business license under this chapter, the application shall be referred by the Treasurer-Tax Collector to the Planning Department to verify compliance with applicable land use regulations; to the Environmental Health Department to verify compliance with applicable health requirements; and to the Sheriff for investigation concerning the applicant s business and character of the applicant; a. These departments shall, after investigation, file a report upon the application recommending whether or not the Treasure-Tax Collector should issue a license. b. A department shall be allowed sixty (60) days from the date of receiving an applicatior to file its report. c. No applicant shall granted a license under this chapter unless and until it appears that the applicant s conduct or proposed conduct of the business does and will comply with all applicable laws and ordinances, including but not limited to those relating to the public health and land use. An applicant s violation of any provision contained in subdivision B of Section may also constitute grounds for denial of a license. d. Each applicant for a license under this chapter shall acknowledge having read Penal Code Section 496a, which shall be prominently set forth on the application in bold type. e. A denial of a business license by the Treasurer-Tax Collector shall be in writing and state the reasons for denial. A denial shall be served upon the applicant by mailing a copy by certified mail, postage prepaid, return receipt requested, to the applicants address as listed in the application. The Treasurer- Tax Collector shall not accept a new application from the same owner or applicant for six months following a denial. f. A non-refundable application processing fee for the business license provided for in this section shall be established by resolution of the Board of Supervisors and paid before an application is deemed complete. g. The business license provided for in this section shall be issued for a period of one (1) year from the date of issuance. Each business license must be renewed for each subsequent year. In connection with the renewal of each such license, the licensee shall furnish the license renewal fee established by resolution of the Board of Supervisors. 6. Any time a business licensed under this section changes ownership, the Dew owner must apply and qualify for a new business license. No license may be sold, transferred, or assigned by the licensee or by operation of law. Any sale, transfer or assignment, or attempt to sell, transfer or assign, the license shall be deemed to constitute a voluntary surrender of such license, which shall thereafter be deemed terminated and void. This section does not restrict the right of any owner to sell, transfer or assign ownership interest in the business itself. 5

9 A licensee shall correct any information contained in an application by providing written notice of the change to the Treasurer-Tax collector and Sheriff within five (5) working days. A license may be suspended or revoked if the reporting requirements of this section are not met Registration requirement. A. It is unlawful for a person to act as a junk dealer or recycler, or be employed by a business subject to licensing under this chapter, without first making an application for, receiving, and maintaining a valid registration from the Treasurer-Tax Collector. 3. Any person seeking to register as a junk dealer or recycler shall make application to the Treasurer-Tax Collector. 1. In addition to other necessary information, the application shall include the applicant s social security number, date of birth, current residence address, photograph, and fingerprints of a quality that is acceptable to the Sheriff. 2. Upon submission of a complete application for registration under this chapter, the application shall be referred by the Treasurer-Tax Collector to the Sheriff for investigation concerning the applicant. The Sheriff shall, after investigation, file a report upon the application recommending whether or not the Treasure-Tax Collector should issue a registration. 3. The departments shall be allowed sixty (60) days fiom the date of receiving a completed application within which to file a report. 4..4n applicant s violation of any provision contained in subdivision B of Section mc,y also constitute grounds for denial of a registration. 5. A denial of registration by the Treasurer-Tax Collector shall be in writing and state the reasons for denial. A denial shall be served upon the applicant by mailing a copy by certified mail, postage prepaid, return receipt requested, to the applicants address as listed in the application. The Treasurer- Tax Collector shall not accept a new application from the same applicant for six (6) months following a denial. 6. A non-refundable application processing fee for the registration provided for in this section shall be established by resolution of the Board of Supervisors and paid before an application is deemed complete. 7. The registration provided for in this section shall be issued for a period of one (1) year fiom the date of issuance. Each registration must be renewecl for each subsequent year. In connection with the renewal of each such registration, the licensee shall furnish the license renewal fee established by resolutim of the Board of Supervisors. 8. A registrant shall correct any information contained in an application by providing written notice of the change to the Treasurer-Tax collector and Sheriff within five (5) working days. A registration may be suspended or revoked if the reporting requirements of this section are not met. 9. In the event of the denial of an application for registration by the Trea-surer-Tax Collector under this chapter, the applicant may, within ten (10 6

10 0720 days after the date written notice of such adverse report is mailed, file with the Board of Supervisors a notice of intention to appear before the Board to appeal the denial of the application. The Board shall set the matter for public hearing within forty-five (45:) calendar days of receipt of the appeal. Upon failure to file such notice within the ten-day period, the denial of the application shall be final and conchs ive. C. If applicable, in accordance with California Business and Professions Code Sections and 12733, the applicant shall attach to the application documentation to the satisfaction of the Treasurer-Tax Collector that the applicant holds a current and active California Weighmaster License. A copy of the applicant s current Weighmaster License shall be displayed in a prominent location at each location where the applicant conducts business. D. Each applicant for a registration under this chapter shall acknowledge having read Penal Code Section 496a, which shall be prominently set forth on the application in bold type. E Discipline procedures. A. The Sheriff may investigate the actions of any licensee or registrant and may, after ten (10) days written notice to the licensee or registrant request that the Board of Supervisors schedule a hearing concerning the suspension, revocation or conditionhg of a license or registration upon the commission of any one or more of the acts or omissions constituting grounds for disciplinary action under this section. The grounds for such action shall be summarized in the notice. The notice provided for herein shall be given by registered or certified mail, postage prepaid, or in the manner required for the service of summons in civil actions. Pending the Board s final decision regarding the license or registration, the person may continue to engage in the business. B. Disciplinary Action Grounds. It shall be a ground for disciplinary action if my registrant or licensee, agent or employee or any person connected or associated with the licensee as partner, director, officer, stockholder, general manager., or person who is exercising managerial authority of or on behalf of the licensee has: 1. Knowingly made any false, misleading or fraudulent statement of a material fact in an application for a license or registration, or in any report or record required to be filed; or 2. Violated any provision or this chapter or of any statute relating to the individual s activity regulated under this chapter; or 1.,. Been convicted of a felony or any crime involving theft, embezzlement, moral turpitude; dishonesty or fraud; or 4. Coimnitted any unlawful, false, fraudulent, deceptive or dangerous act while conducting activities relating to a licensed business; or 5. Published, uttered or disseminated any false, deceptive or misleading statements or advertisements in connection with activities relating to the operation cf dicensed business; or

11 Violated any rule or regulation adopted by the Board relating to activities of a licensee's business; or 7. Conducted the licensed business or activities relating to a licensed business in a manner contrary to the peace, health, safety, and general welfare or the public; or C. License or Registration- Revocation Without Hearing Upon Conviction. If any person holding a license or registration under this chapter is convicted in any court of the violation of any law relative to the individual's operation of a licensed business or activities relating to a licensed business, the Board of Supervisors may revoke the license or registration forthwith without any hrther action thereon other than giving notice of revocation to the licensee or registrant Penalty. 4ny person violating any provision of this chapter shall be guilty of a misdemeanor and subject to a fine of not more than five hundred dollars ($500) or imprisonment in the County Jail for not more than six (6) months, or both such fine and imprisonment. SECTION I1 If any section, subsection, sentence, clause or phase or word of this ordinance is for any reason held to be unconstitutional by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The Board of Supervisors hereby declares that it would have passed and adopted this ordinance and each and all provisions thereof irrespective of the fact that any one or more of said provisions be declared uncons titutisnai. SECTION I11 Upon final passage by the Board of Supervisors, this ordinance shall take effect and be operative on either the 3 lst day after the date of final passage or July I, 12008, whichever date is later. PASSED AND ADOPTED this day of,2008, by the Board of Supervisors of the County of Santa Cruz by the following vote: AYES: SUPERVISORS NOES: SUPERVISORS AB SEhTT: SUPERVISORS AB STAIN: SUPERVISORS 8

12 0122 Attest: Clerk of the Board Chairperson, Board of Supervisors 9

13 Page 1 of Supervisor Jan Beautz: I read an article in the SC Sentinel recently regarding licensing the purchase and sale of scrap metals. The article indicated there is an agenda item scheduled in April 2008 regarding licensing buyers and sellers of scrap metals. I am opposed to the licensing of sellers, particularly the low volume seller. In the past I have taken scrap metal from my garage to a local scrap metal dealer, recovering the slight intrinsic value myself. This happens only infrequently and in low volume. Licensing sellers implies that there will be fees and inconvenience for low volume sellers, preventing retrieval of the intrinsic value of the scrap metal by the owner. I understand the desirability of preventing theft and I am in agreement that scrap dealers should have adequate records and details of sales including identification of sellers. Inconveniencing individual citizens by licensing them seems excessive. Thank you for your attention. Ed Rosser 4/1/2008