ISRI News: November/December 2008

November/December 2008

Fall Meeting Set Against Good, Bad News
ISRI held its fall governance meeting Oct. 14-17 in San Francisco during a best-of-times/worst-of-times scenario for the association and the scrap industry. On the positive side, ReMA has enjoyed a stellar year in 2008: membership ranks reached a 10-year high, its annual convention set an attendance record, and its three main revenue streams—membership, convention, and Scrap—were in the black. That good news lost much of its luster, however, in the face of the recent global economic meltdown, which was taking a serious toll on scrap operators when ReMA members gathered in the City by the Bay.

Despite the vast market uncertainty swirling around them, ReMA's board members and committee leaders dove into the fall meeting's hefty agenda, which included a public forum on ReMA's proposed code of conduct, introduction of the association's Image Tool Kit and Materials Theft Tool Kit, a leadership training seminar, a humorous and informative talk on dealing with the media, and two board meetings. At those meetings, the board passed the following motions:

• Adopt ReMA's 2009 budget. Due to the recent poor market conditions, the board also approved a two-tiered list of $946,000 of itemized expenses in the new budget that will be put on hold until the association's leaders conduct a budget review the last week of March 2009.

• Pursue federal legislation in response to proposed U.S. House and Senate bills—H.R. 6831 and S. 3666—that target copper thefts and seek to impose operational requirements on scrap processors as well as civil penalties for anyone who fails to comply (See "Senate Bill Takes Aim at Copper Thefts").

  In related action, ReMA's board authorized the expenditure of up to $240,000 on lobbying assistance to help the association combat the proposed copper-theft bills. The ReMA board will review the results of this expenditure at its next meeting during the ReMA convention in April 2009.

• Authorize ReMA to spend up to $75,000 to hire a constitutional law expert to analyze the relative strengths of legal arguments the industry could use to challenge tag-and-hold legislation. The expert also would recommend a legal strategy for choosing the best set of facts and best court circuit in which to bring such a case.

• Amend bylaw 9.5 regarding the ability of each ReMA chapter to elect an individual to serve as an ex officio representative to the ReMA board of directors and vote in place of the chapter president. The amended bylaw gives each chapter a vote through its president or its elected representative, but not both. The elected representative's term must exceed one year but may not exceed two years. No chapter president or elected representative shall serve on the board for more than two consecutive years as chapter president or elected representative. The term of the elected representative must correspond to the term of the chapter president on whose behalf the elected representative serves.

• Approve the following ReMA legislative policy on energy and climate change:

  Scrap recycling is a climate-friendly industry that substantially reduces greenhouse gas emissions. As a result, along with other environmental benefits of recycling, it is in the national environmental interest of the United States to promote scrap recycling as a climate-friendly industry and to enhance recycling-related activities that in turn help to reduce or avoid greenhouse gas emissions throughout the country. ReMA supports climate change policy that promotes and enhances the economic, social, life-cycle, and national security benefits of responsibly recycling scrap metal, paper, plastics, electronics, and rubber.

  ISRI shall advocate for legislative policy that

  —promotes and enhances the economic, social, life-cycle, and national security benefits of responsibly recycling scrap metal, paper, plastics, electronics, and rubber.

  —recognizes and enhances the existing scrap recycling infrastructure.

  —establishes equity in the statutory treatment of recyclable materials versus virgin materials.

  —distinguishes scrap recyclables from solid waste as it pertains to climate change.

  —protects against export controls and trade barriers that impede the free and fair trade of specification-grade scrap commodities.

  —funds research and programs to remove impediments to recycling, such as radioactive material, PCBs, mercury-containing devices, CFCs, automotive shredder residue, and cathode-ray tubes.

  —establishes incentives, such as accelerated depreciation and investment tax credits, for scrap recycling equipment that demonstrates a life-cycle benefit by reducing or avoiding direct or indirect greenhouse gas emissions.

  —provides offset credits for scrap recycling companies that increase the percent of recyclable material in scrap recyclables versus the waste sent for disposal.

• Modify bylaw 4.32 on emergency spending requests. Any request for funds in excess of $25,000 will be deemed an emergency spending request if it is brought to the ReMA board for approval without at least 10 days' notice to the board and without passing through the relevant committee(s), including the finance committee. The board will only consider an emergency spending request if two-thirds of the board members in attendance declare that an emergency exists, immediate action is necessary to address the emergency, and such action cannot wait to proceed through the normal funding channels. Once the board agrees to consider the emergency spending request, the board may debate the request and approve it by a majority vote of the board members in attendance.

• Adopt new ReMA governance policies regarding document destruction, staff compensation, and conflict of interest concerns regarding ReMA directors, officers, some committee/council chairs, and certain key employees. These new policies, which will become part of ReMA's Policy Manual, are required to comply with the IRS' new Form 990 annual tax return form for nonprofits.

• Adjust membership dues for retired individuals from the current level of $706 per year to $500 per year, with plans to review this dues level every three years.

• Revise bylaw 4.33 regarding refunds for ReMA program registrations. Under the new bylaw, ReMA will provide a full refund for registration cancellations made prior to the registration cut-off date stated on the registration form or ReMA Internet registration page for the meeting in question, less an administrative fee. For meetings with a registration fee less than $500, the administrative fee is $50. For meetings with a registration fee of $500 or more, the administrative fee is $100. For cancellations made after the cut-off date stated on the registration form or Internet registration page, ReMA will provide a refund equal to 50 percent of the registration fee. ReMA's president has the discretion to reduce or waive administrative fees when the registrant must cancel his or her registration due to serious medical emergency. All refund requests must be made in writing and may be sent by postal mail, e-mail, or fax within 10 days of the close of the event in question.

Tax Allowance Accelerates Equipment Depreciation
The federal government's financial rescue law—the Emergency Economic Stabilization Act of 2008—included an extra bit of good news for scrap processors. The law, passed Oct. 3, incorporated ISRI-backed language providing a 50-percent accelerated depreciation allowance in the first year for purchases of eligible recycling equipment. This allowance could yield $162 million in depreciation savings for scrap processors over 10 years, according to estimates by the Joint Committee on Taxation. The ReMA language was part of the former Recycling Investment Saves Energy Act, which the association has promoted for the past three years.

The new allowance applies to eligible recycling equipment purchased after Aug. 31, 2008. The law defines eligible equipment as machinery and equipment used exclusively to collect, distribute, or recycle scrap paper, metal, plastic, glass, textiles, rubber, packaging, and electronics. The new law sets an important precedent by defining electronic scrap, rather than electronic waste, for the first time in a federal statute, providing a precedent toward changing how federal law treats recycled electronics materials and electronics recyclers. The new law also recognizes the broader concept that "scrap is not waste."

ISRI credits this legislative success, in part, to the help of the Senate Recycling Caucus, especially the group's co-chairs, Sens. Olympia Snowe (R-Maine) and Tom Carper (D-Del.). ReMA members also promoted the allowance through their grassroots lobbying efforts, explaining how the accelerated depreciation would enable them to invest more in their operations, become more efficient, better protect the environment, become even more climate friendly, and create more jobs in the manufacturing sector. The Recycling Roundtable, an informal group of associations—including ISRI—and other stakeholders interested in recycling, also advocated for the passage of the new allowance.

ISRI is creating a fact sheet to explain the new accelerated depreciation allowance in more detail. In the meantime, contact Billy Johnson, 202/662-8548 or billyjohnson@isri.org, or Mark Reiter, 202/662-8517 or markreiter@isri.org, for more information.  

ISRI Acquires IAER
After more than 18 months of discussions and negotiations, ReMA has finalized an agreement to acquire the assets of the International Association of Electronics Recyclers (Albany, N.Y.). The acquisition will final once it has the approval of the New York state government as well as IAER's members and board of directors.

IAER, formed in 1998, has approximately 120 member companies, which will become part of ReMA's new Electronics Recycling Division upon completion of the deal. This acquisition will "reinforce ReMA's position as the single voice of the recycling industry," says ReMA President Robin Wiener. "With IAER members as part of ISRI, we will be able to communicate with the U.S. EPA, Congress, and the states with a single, clear message."

Contact Eric Harris, 202/662-8514 or ericharris@isri.org.  

Senate Bill Takes Aim at Copper Thefts
On Oct. 1, Sens. Amy Klobuchar (D-Minn.) and Orrin Hatch (R-Utah) introduced a companion bill to the House version of the Copper Theft Prevention Act of 2008 (H.R. 6831), which Reps. Bart Stupak (D-Mich.) and Jim Ramstad (R-Minn.) introduced Aug. 1. Like the original House bill, the Senate legislation—S. 3666—addresses thefts only of copper and not other materials such as aluminum or plastics. Among its features, the bill imposes recordkeeping requirements on scrap operators and requires them to pay for copper scrap transactions in excess of $250 by check rather than by cash. Scrap recyclers who fail to comply with the bill's requirements could face civil penalties up to $10,000.

By targeting copper thefts exclusively, both the House and Senate bills fail to fully address the materials theft problem, according to ReMA's government affairs staff. The legislation also focuses only on scrap processors and their business practices and not on crime prevention or punishment of the criminals. In addition, the bill demonstrates Congress' lack of understanding of the recycling industry.

ISRI staff members have met with members of Congress to explain the association's legislative positions and how the scrap industry has developed effective tools to combat materials theft, such as ReMA's Theft Alert e-mail system and outreach to law enforcement officials and other stakeholders. ReMA will continue working with members of Congress to address the shortcomings of both H.R. 6831 and S. 3666.

Contact Billy Johnson, 202/662-8548 or billyjohnson@isri.org, or Mark Reiter, 202/662-8517 or markreiter@isri.org. 

Top

ISRI, Scrap Welcome New Staff
ISRI has hired Gary Bush for the new position of director of materials theft prevention. Bush has 32 years of law enforcement experience, most recently serving in the Marion County sheriff's office in Ocala, Fla. There, he worked in special investigations as a liaison with local metal recycling companies on the materials theft issue. His previous positions included patrol deputy, property crimes detective, major crimes detective, and patrol sergeant. He also served two years in the U.S. Army military police in Germany. Bush, who is based in Florida, can be reached at 352/433-2477 or garybush@isri.org.

In other ReMA personnel news, Diana Mota Morgan has joined Scrap as associate editor. Morgan most recently worked as managing editor for the Gazette newspapers in Mount Airy, Md. Before that, she served as education reporter for the company's Frederick, Md., bureau. Morgan, who has a journalism degree from the University of Maryland, College Park, can be reached at 202/662-8531 or dianamotamorgan@scrap.org.  

DOJ Issues VIN Reporting Rules 
The U.S. Department of Justice issued long-awaited regulations in late September requiring the reporting of vehicle identification numbers of salvaged vehicles to a national database. These rules have languished for nearly 16 years following a congressional mandate contained in the National Anti-Car Theft Act of 1992.

DOJ designed the new regulations to implement the National Motor Vehicle Title Information System, an element of the 1992 act. The NMVTIS establishes an electronic means to verify and exchange titling, brand, and theft data among motor vehicle administrators, law enforcement officials, prospective purchasers, and insurance carriers. NMVTIS supporters expect the database will allow state titling agencies to verify the validity of ownership documents or identify stolen vehicles before they issue new titles. The system must hold information gathered for these purposes in strict confidence, as it may contain confidential business information of the scrap processors reporting the data.

ISRI contacted DOJ earlier this year to express its concerns about the reported development and promotion of a private VIN reporting mechanism. ReMA is urging DOJ to ensure that no single company or group of private market participants gains proprietary access to the NMVTIS database.

Contact Danielle Waterfield, 202/662-8516 or daniellewaterfield@isri.org.  

New Scam Uses U.S. DOT Stationery 
ISRI has learned of a new scam that could affect scrap recycling operations. Transportation companies in some areas are receiving faxes that appear to be on U.S. Department of Transportation stationery and that request financial information. DOT confirms that this is a fraudulent attempt to access private information. ReMA members who receive this fax should not respond. Instead, members should contact the Inspector General of DOT at 800/424-9071 or hotline@oig.dot.gov.

ISRI advises members to always be wary of calls, letters, e-mails, or faxes that request personal or financial information. Be sure to check with known sources prior to sending any private information. 

ISRI Urges Members to Become PAC Authorized
With the new 111th Congress set to convene in January, bringing with it many new senators and representatives, ReMA PAC—ReMA's political action committee—is even more vital to the scrap industry's representation in Washington. To make ReMA PAC as effective as possible, ReMA encourages all members to become PAC authorized. Becoming PAC authorized is easy and does not commit you to contributing to ReMA PAC, just to being contacted with information about the PAC. By signing the PAC authorization form at www.isri.org/isripac, you enable yourself and others at your company to receive legislative updates, participate in events for congressional candidates, and contribute to ReMA PAC.

In the past, ReMA PAC has helped the industry win major victories regarding Superfund reform, accelerated depreciation for equipment purchases, and formation of recycling caucuses in both the House and Senate, among other things. The PAC also has given ReMA staffers and members unprecedented access to members of Congress during the association's annual congressional fly-in and other legislative situations.

Contact Billy Johnson, 202/662-8548 or billyjohnson@isri.org.  

ISRI in Brief

• The 2008 ReMA Commodities Roundtable Forum, held in mid-September in Chicago, set a record with 716 attendees. The event earned kudos for its quality program content and its new venue in downtown Chicago rather than its customary location in the Chicago suburb of Rosemont. In addition to the perennial roundtable sessions on aluminum, copper/brass, and ferrous, this year's forum offered a program on plastics as well as a new training program on the use of ReMA specifications. In addition, a special-topic roundtable on the economy earned high marks from attendees.

  ISRI acknowledges the support of the following sponsors and exhibitors whose contributions added significantly to the forum's success:

  Sponsors: Gurona Corp., Harris Press & Shear, Jupiter Transport Services, Platts/McGraw-Hill, Alan Ross Machinery Corp., and The Shredder Co.

  Exhibitors: American Metal Market, GlobalScrap.com, Gurona Corp., Harris Press & Shear, Jupiter Transport Services, Platts/McGraw-Hill, Alan Ross Machinery Corp., ScrapRunner, SDS Logistics, The Shared Logic Group, The Shredder Co., Thermo Scientific Niton Analyzers, TRADEPAQ: TRM, Tung Tai Group, TY Cushion Tire, and Wendt Corp.

  Mark your calendar for next year's ReMA Commodities Roundtable Forum, Sept. 21-23, at the same downtown Hyatt Regency Chicago hotel.

  ISRI was a platinum sponsor at the E-Scrap 2008 conference, held in mid-September in Glendale, Ariz. E-Scrap 2008 featured extensive and detailed industry assessments, including analyses of stewardship systems and trends in the United States and Canada, e-scrap collection issues, recycling market factors, and legislative policy considerations. Eric Harris, ReMA's associate counsel/director of governmental and international affairs, spoke at the opening plenary session on the synergies between controlling climate change and recycling. ReMA also exhibited at the E-Scrap expo to promote the benefits of joining the association as well as its key policy initiatives, including RIOS, trade, Design for Recycling®, and safety. In addition, ReMA hosted an opening night reception to welcome attendees and announce its pending acquisition of the International Association of Electronics Recyclers. Several ReMA members supported the association's sponsorship activities at the E-Scrap show, including Sims Recycling Solutions, Xstrata Copper, Round2 Technologies, WeRecycle!, and Synergy Recycling.

  ISRI also participated in a two-day negotiation on R2 (Responsible Recycling Practices for Use in Accredited Certification Programs for Electronics Recyclers) during the E-Scrap show. The group agreed to end the substantive debate and move the document toward implementation. For the past two years, ReMA has provided leadership in this multistakeholder, EPA-sponsored process to develop nationally recognized e-recycling performance standards. ReMA plans to offer R2 certification to recyclers through its RIOS program.

  Contact Eric Harris, 202/662-8514 or at ericharris@isri.org.

• Chuck Carr, ReMA vice president for member services, participated in a panel discussion on copper theft at the National Association of Broadcasters radio convention in Austin, Texas, in mid-September. Carr served on the panel with two executives from Cox Communications and Clear Channel Communications, who praised ReMA's theft prevention efforts in their presentations. They referred U.S. radio station owners and engineers to the ReMA Web site for information and useful tools to address metal theft. Carr presented the materials theft issue from the recycler's point of view and shared details of many cooperative efforts that are successfully countering the theft problem across the nation. NAB asked to do a feature on ReMA's theft prevention efforts in a future issue of its magazine, and the group plans to repeat the theft program at its 2009 convention for international radio and television broadcasters in Las Vegas.

• Tom Herod, ReMA's transportation safety and training manager, spoke at the Sept. 18 meeting of the American Association of Railroads' Open Top Loading Rules Committee, held in Montréal. Herod presented the scrap industry's views on the committee's pending open-top railcar loading rule modifications and the premature implementation of these changes by railroads prior to official adoption. John Blackman, the committee's chair, noted that the group had received several telephone and e-mail comments from scrap recyclers, adding that the committee will consider all comments as it finalizes the new rule.

  The committee, which includes technical operations personnel from 10 railroads in North America, suggested that scrap shippers could load baled scrap on top of loose scrap, a practice that historically has proven effective at keeping loose scrap from falling out of the railcars. The current and pending AAR rule allows baled scrap to ride in open-top railcars with up to 50 percent of the bale dimension above the top of the car sides and ends. This approach yields the greatest transportation efficiency, AAR says, and is the only method included in the new open-top loading rules that would permit scrap to exceed the height of the railcar. Commenting on this option, Herod noted that many mill customers will not accept baled scrap and some scrap recyclers do not bale scrap at all.

  Contact Tom Herod, 202/662-8519 or tomherod@isri.org.

• ISRI members Michael Finn of Recycling Services (Chicago) and Frank Cozzi of Cozzi Enterprises (Burr Ridge, Ill.) joined with ReMA staff members to meet in mid-September with Illinois Commissioner of the Environment Suzanne Malec-McKenna and Deputy Commissioner Kimberly Worthington regarding Chicago's proposed franchise agreement ordinance. The ordinance, which is designed to help Chicago increase its recycling rates, includes a provision to divide the city into districts in which a franchisee would have exclusive rights to collect waste and recyclables. The plan would cover residential buildings with five or more units and commercial, industrial, and institutional establishments. This provision could have significant effects on ReMA members that already have private contracts to recycle material in the districts. The ReMA team expressed its views regarding such flow control provisions and cited court cases that established that recyclables are materials that, unless the owner relinquishes them, a municipality cannot compel the owner to give up his/her property rights to them. In response, the city officials suggested that the proposed plan could exempt businesses if they already have a successful recycling program with a private entity.

  Contact Scott Horne, 202/662-8513 or scotthorne@isri.org, or Jonathan Levy, 202/662-8530 or jonathanlevy@isri.org. •