JANUARY 2009

Anti-theft legislation proves burdensome to scrap recyclers
Delaware and Pennsylvania draft scrap metal theft legislation
Write the Author

The states of Delaware and Pennsylvania both have anti-theft legislation for ferrous and nonferrous metals.

Changing requirements have caused the development of new products to meet the needs of scrap recyclers. UDC, Inc. produced the Universal Data Camera to capture an image of the scrap and to record the information required for each purchase.

The Institute of Scrap Recycling Industries’ Mid-Atlantic Chapter (ISRI-MAC) was involved with the negotiations. ISRI-MAC stressed the need for lobbying on behalf of the scrap metal industry to ensure that the regulations put in place are effective but put the least onerous conditions upon scrap metal dealers.

In the case of Delaware, the scrap metal industry was initially excluded.

“We didn’t have much of an opportunity in the first round because the legislators were very set on passing something,” said Rick Allan, executive director for ISRI-MAC, “but in this last round, we were able to get an amendment changed to provide relief for the dealers.”

The change from an 18-day hold to a 7-day hold, the key issue, was achieved through the support of four ISRI-MAC member companies and many scrap processors and dismantlers.

Requests for legislation were made two and a half years ago by the state police as a means of helping them reduce a growing number of scrap metal thefts. The legislation - HB 635 - was passed in June 2006. It required that certain record keeping be done such as recording addresses, descriptions of materials and other standard regulations found in most state laws.

What really irked the scrap dealers was the 18-day hold. ISRI-MAC had met with Governor Ruth Ann Minner to discuss the issue, but was unable to secure changes.

“The legislators weren’t receptive to our explanations of how it was going to affect us adversely,” said Allan.

The law was passed but until amended in June 2008, it had no effect on scrap yard operations.

“In that interim period we were told that nothing was being done,” said Allan, “but then last April we were told that the state police had written the regulations.”

ISRI-MAC made it a point to maintain the lines of communications with the police to ensure that its concerns would be addressed in the new regulations.

“The state police were very receptive to amending the holding period. They were also willing to let us use certain reporting forms, if they were pre-approved,” said Allan. The ISRI amendments – the hold period and use of pre-approved reporting forms – were approved by the State Senate at the behest of a senator who realized the implications of the longer hold period.

Pennsylvania introduced its legislation in May 2006, but it was not enacted until June 2008.

“In February/March of 2006, Rep. Scott Boyd asked if I would consider working with him to draft something that would be agreeable to our industry,” he said. “We provided all of ISRI’s practices and procedures, which had a menu of options of what works best for your particular company and minimizes your exposure to buy potentially stolen materials.”

The options included installing video cameras to record sellers, their driver’s licenses and other records.

While discussions started out well, because of a change in leadership, the draft bill was transferred to Rep. Eddie Pashinski, who re-wrote the draft legislation several times.

Allan worked with Pashinski, the sponsor of the bill, as well as other legislators when the bill was introduced. Concerns about thefts were coming from the utility, construction, business and residential sectors.

“For the typical reasons,” said Allan, “There was a misconception in these states that we didn’t maintain records. We explained that we do keep track of our inventory.

“It reached the point where it was unworkable and very confusing – even terms weren’t accurate. We asked that they use national and international terms used by the industry,” he added. “This dragged on for six months before they had the hearing where I testified. We took the position that we didn’t oppose legislation - we simply wanted to make sure that it could be implemented by our members without too much aggravation.

“The sponsor of the bill was intent on getting this done and had put out negative misinformation about the industry,” he said. “It ended up that it was our industry against probably every type of building industry sector and utility companies. They even brought in service organizations to support the legislation.”

This did not deter ISRI-MAC, which had worked with national organizations on similar issues.

Success was achieved upon Senate committee review. The legislation input the ISRI-MAC led compromise and the Governor signed the bill into law in October.

Allan said it is important to educate all parties about the scrap industry and above all, to be persistent and not give up.

“They were educated to the point where they learned a lot about the industry and we showed them how we can account for every pound of metal that was brought in to us,” he says.

Maryland is now in the process of drafting anti-theft legislation, having taken over the issue from the City of Baltimore, which was drafting its own legislation.

Allan has already spoken with state legislators about the bill and negotiations about the language have begun.

Scott Sherr, president of Diamond State Recycling in Wilmington, Delaware, opposed the 18-day hold rule and took his concerns to Governor Minner.

“I gave her an idea of the volume that I did – 20,000 to 30,000 pounds a day,” he says. “For me to hold the material, you would need to have a warehouse the size of two football fields, and security measures that would greatly outnumber and out cost what the industries are losing through scrap.

“And with a little more protection of somebody else’s material,” he added, “the construction companies could lock up their buildings or put on a security guard. The state police were the first to admit they only needed three days because if they couldn’t identify the material during that time, the hold couldn’t do them any good.”

Sherr also purchases scrap from other dealers and did not appreciate the thought of having to hold onto that scrap for an additional 18 days.

The Governor told Sherr that the issue was out of her hands and that he would have to effect changes on his own. Later on in the process, Sherr met with State Treasurer Jack Markell (now Governor Elect), who helped him by providing essential government contacts.

Sherr did not appreciate the state labeling scrap dealers as criminals.

“They made a law and assumed that we were the criminals,” he says, stressing that the situation could have been avoided from the start had the state consulted the industry.