January/Febraury 2009
Materials theft, electronics recycling, and stormwater were among the hot-button scrap issues state lawmakers addressed in 2008.
By Theodore Fischer
From sea to shining sea, state lawmakers were hard at work in 2008, creating laws and regulations that affect the scrap industry both directly and indirectly. To many states, materials theft was public enemy No. 1, the problem growing due to several years of unusually high scrap prices. Though theft reports slowed following last fall's precipitous drop in prices, state laws regulating the sale and purchase of scrap with the goal of deterring thieves continue to make their way through legislatures and, in some cases, courthouses.
That wasn't the only scrap-related issue garnering state attention, however. The growing volume of end-of-life electronics brought electronic scrap to the attention of a variety of statehouses. Stormwater control proposals, which often apply to facilities such as scrapyards, quadrupled from 2007 to 2008. And several states introduced measures to begin to address climate change.
Even scrapyards based in states that did not address scrap-related issues in 2008 have good reasons to keep an eye on what the other states are up to. After all, what scrap company operates entirely in one state? Regulations that affect suppliers and consumers of scrap in other states can affect the processor as well. Further, states that pioneer laws on certain topics can serve as models—good and bad—for other states' laws and for national legislation. The following highlight reel describes what the states are doing on the issues that have received the most legislative floor time and are most likely to catch fire nationwide.
Materials Theft
In terms of scrap-industry impact, materials theft attracted the most headlines and the most attention from statehouses in 2008. More than 25 states had enacted materials-theft laws in 2007, and several more followed suit in 2008.
At the more industry-friendly end, some laws mandate certain forms of recordkeeping or regulate the purchase of narrowly defined types of materials. Wisconsin passed such a law last year, addressing only "proprietary" materials such as copper and aluminum and items like manhole covers and grave markers. The law mandates some recordkeeping and reporting, but it does not force dealers to photograph or tag and hold purchases. "It's what I would call a retail-based ordinance, as opposed to a commercial, dealer-to-dealer type of law," says David Borsuk of Sadoff Iron & Metal (Fond du Lac, Wis.), legislative chair of ReMA's Wisconsin Chapter. "We're fortunate that we were able to work with the various stakeholders to pass a scrap theft law that was workable for all the parties." Along similar lines, Missouri now bars scrap processors from purchasing metal materials identified as belonging to local governments (such as street signs, manhole covers, traffic signal boxes, and guardrails) and from obtaining beer kegs from any source other than brewers.
On the more challenging side, in 2008 California passed the Berryhill Bill (AB 844), which requires scrap sellers to provide a thumbprint and photo ID and scrap dealers to photograph materials and hold payment for three days—a burdensome obligation for many. "It's something that the industry just needs to absorb," says Dave Mitchell, senior buyer for Sims Metal Management (Redwood City, Calif.) and president of ReMA's West Coast Chapter. "It's going to be absorbed easier by the larger companies, but it can severely impact smaller, mom-and-pop-type operations [because] the financial cost of putting together the system for recordkeeping can be quite burdensome."
California also narrowly passed a nettlesome bill that requires scrap dealers to obtain ID information from sellers and pay by check for specified quantities—more than $50 worth—of newspapers and other recyclables covered by the state's bottle bill, called California Refund Value recyclables. Because this bill conflicts with certain sections of the state's Business and Professions Code, however, Mitchell believes the next session of the legislature might rescind it.
A third bit of California sunshine, the Maldonado Bill (SB 447), requires dealers to provide scrap purchase details—including descriptions of the material and seller ID information—to local law enforcement every day. The bill does not provide guidelines for establishing reporting systems, a particular problem for businesses with yards in multiple jurisdictions that worry they might need to comply with a different requirement in each city or county. "Right now we're working very diligently with the California State Sheriffs' Association, which is hoping to work with the California Police Chiefs Association, to come up with some sort of unified reporting that businesses can use," Mitchell says.
Other states have created burdensome requirements for tagging individual scrap purchases, segregating them in the yard, and/or holding them for a defined period. Delaware lawmakers, for example, passed a bill that required recyclers to hold copper for 18 days before processing or shipping it and increased the maximum penalty for noncompliance to $10,000. The legislature debated and passed the bill through both houses in just 10 days without input from local scrap dealers, says Scott Sherr, president of Diamond State Recycling (Wilmington) and an ReMA Mid-Atlantic Chapter officer. Fortunately, he says, "through the lobbying efforts of ReMA members and staff, as well as a few nonmembers, we were able to have the law amended to [create] a seven-day hold with several exclusions." The law as originally written "would have damaged local businesses had the changes not been made," he adds.
In ReMA's wide-ranging Gulf Coast Chapter—which includes New Mexico, Texas, Oklahoma, Arkansas, Louisiana, Mississippi, and parts of Kansas—"virtually all of those states have enacted new laws or amended existing requirements for scrap dealers or secondary metals recyclers" to curb materials theft, says J. Barton Seitz, an attorney with Baker Botts (Washington, D.C.) who works with Gulf Coast Chapter members.
Gulf Coast members generally accept state requirements for recordkeeping and identification, even thumbprinting, while they attempt to keep tag-and-hold demands at bay, Seitz says. "Any hold requirement puts a huge burden on dealers because of the huge volume of materials changing hands on a daily basis," he explains. "Where there's been an opportunity for the dealers and the industry to coordinate with state legislators and city councilmen, there's been an effort to allow electronic records in lieu of hold requirements. That's something the industry has been willing to accept as a tradeoff."
Some laws are still being debated or will be reintroduced in 2009. ReMA members in Nevada are working with legislators on a materials theft law for the upcoming session in February. At the same time they're collaborating with utilities and law enforcement agencies to complement the law with a notification process. The goal, says John Oceguera, a Nevada assemblyman and North Las Vegas assistant fire chief, is that "when the utilities or the railroad or anybody loses something," they can use ReMA's Theft Alert system to "send notifications to all the scrap metal dealers in town so they can be on the lookout. … That's maybe even better than what we're doing in the Assembly."
Michigan's full-time state legislature worked overtime on nonferrous metals theft: Lawmakers introduced some 20 bills on the subject during the two-year session that had nearly completed by press time. ReMA supports SB 1358, which requires scrap processors to maintain detailed records, photograph the driver's license and license plate of all sellers, and collect thumbprints. It also requires recyclers to subscribe to an online database of stolen materials such as the ReMA Theft Alert system. Knowingly buying or selling stolen nonferrous metal articles would be a felony punishable by up to five years' imprisonment and/or a fine of up $5,000, on top of civil fines.
If those requirements sound stringent, alternative bills were even harsher, notes Charles "Fritz" Benson of Michigan Legislative Consultants (Lansing, Mich.), a scrap industry lobbyist. "The original bill would have required us to tag and hold every transaction for 15 days," he says, virtually preventing scrap companies from conducting business. The ISRI-backed bill, in contrast, has tag-and-hold requirements that apply only to materials such as government property, cemetery ornaments, and copper wiring.
A few states that already regulated scrap metal transactions in previous years are going back for more. In July 2007, the state of Washington passed ISRI-supported legislation that requires scrap dealers to record the names, phone numbers, and IDs of scrap sellers, a law that has had "not much effect" on the industry, says Jay Sternoff, president of Sternoff Metals (Redmond, Wash.) and president of ReMA's Pacific Northwest Chapter. "Yes, the police have shown up at places, and we hear that people have been complying with the law, but no one has been charged with violating the law."
Now a Washington State Department of Transportation and Washington State Patrol joint task force that had been operating for over a year has recommended stricter regulations, including fingerprinting sellers, lowering the maximum for cash purchases from $30 to $10, introducing a 10-day tag-and-hold requirement, mandating business licenses for all sellers, and forcing dealers to maintain three years of video records. Even though "it appears that metal theft reports have dropped dramatically" at the end of 2008, "commensurate with the implosion of metal commodities prices," Sternoff says, "it remains to be seen if the State Patrol will forward [its] recommendations to the governor in January."
Electronic Scrap
With the impending transition to digital television, and as portable electronic devices grow obsolete as quickly as the latest fashions, states are focusing on the challenge of what to do with end-of-life electronics. At last count, 17 states have enacted laws mandating some form of electronics recycling. Sixteen have "producer responsibility" laws that place the onus of paying for the collection and recycling of certain electronics on their manufacturers. Rhode Island's new law is fairly typical. The Electronic Waste Prevention, Reuse, and Recycling Act, which took effect Jan. 1, bans computers and televisions from landfills in the state and makes manufacturers pay for collecting and recycling the covered electronic devices, or CEDs.
The country's first state e-scrap law, passed in California in 2003, takes a different approach. Retailers collect an advance recycling fee from consumers purchasing CEDs that helps pay for their recycling. Pennsylvania and South Carolina currently have ARF bills under consideration.
All told, 19 states introduced e-scrap producer responsibility bills in 2008, though not all of them passed. New Jersey enacted its first e-scrap bill, and West Virginia amended existing legislation. Virginia, Oklahoma, and Missouri passed laws that address the recycling of computers but not televisions; North Carolina added TVs to its existing e-scrap program. Illinois enacted the first electronics producer responsibility bill that prescribes specific statewide e-scrap recycling and reuse goals. The state's goal in 2010, for example, is to recycle 2.5 pounds of CEDs for each person in the state. And the city of New York became the first U.S. municipality with its own e-scrap laws: one established a takeback program; the other set mandatory goals for manufacturers to recover or recycle greater percentages of what they sell in the city.
The Michigan legislature has on its agenda two e-scrap bills that "after numerous negotiations … look likely to pass in the final days of the legislative session," Benson says. SB 897 would require electronics manufacturers to register annually with the Department of Environmental Quality and pay a registration fee, and it prohibits a manufacturer from selling covered electronic devices in the state unless it offers a takeback program. SB 898 would require recyclers to register and pay a registration fee, report to the DEQ the total weight of CEDs recycled each year, obtain insurance, follow industry-accepted procedures, and maintain a management system and recordkeeping. The bill also prohibits the use of prison labor for processing CEDs. It prescribes civil and criminal fines, but it also grants manufacturers, recyclers, collectors, and retailers immunity from liability for the loss or use of data from a CED.
Stormwater
Stormwater is not a topic that makes headlines, but changes to the regulation of stormwater can have wide-ranging effects on scrap processing facilities. States produced a torrent of stormwater legislation last year, according to Jonathan Levy, ReMA's director of state and local programs. Whereas legislatures introduced 25 stormwater bills in 2005 and another 50 in 2007, they introduced a whopping total of 221 in 2008. Not all of them will directly affect ReMA members, Levy says, but they potentially can create a ripple effect, particularly in jurisdictions that authorize cities, counties, and other government entities to devise their own stormwater programs.
In Pennsylvania, House committees passed a bill that authorizes counties to regulate stormwater within watershed-based planning areas; permits the formation of water resource management authorities; and grants counties, municipalities, and water resource management authorities the right to develop integrated water resource management plans. Along similar lines, Georgia now allows municipalities to implement environmental protection initiatives, including stormwater regulations; and Virginia authorized certain localities to enact ordinances to enforce stormwater permits and to seek civil charges and injunctive relief from violators.
In Alaska, a bill sponsored by Gov. Sarah Palin allows the state Department of Environmental Conservation to require facilities to monitor, sample, and report activities detailed in the Clean Water Act; demands permits for certain discharges of pollutants; and prescribes criminal penalties for noncompliance.
Climate Change
The nation's economic crisis had taken some attention away from the subject of climate change by the end of 2008, but the year saw several states take steps to understand and measure the scope of the problem and create governing bodies to enforce future regulations. ReMA's Levy reports that states introduced 472 climate change bills in 2008—the first year ReMA has tracked them—and he expects the issue to be popular in upcoming legislative sessions.
Some states created new agencies or gave new mandates to existing agencies to address the issue. Under the Pennsylvania Climate Change Act, the state's Department of Environmental Protection must publish a report on the potential impact of climate change, assess greenhouse gas emission trends, and establish a voluntary greenhouse gas registry through which businesses can record and publicize any reductions in greenhouse gas emissions they've made without a government mandate. Virginia established the Commission on Energy and Climate Change and authorized it to undertake studies, gather data, and promote research and development on energy and climate issues.
One step further down the regulatory path, Connecticut set a goal of reducing greenhouse gas emissions regionally to 1990s levels and agreed to collaborate with the Conference of New England Governors and Eastern Canadian Premiers to meet the regional goal of reducing greenhouse gas emissions to 75 percent to 85 percent of 2001 levels by 2050. A New Hampshire law authorized a cap-and-trade program for CO2 emissions as part of regional greenhouse gas initiatives. And Minnesota voted to reduce greenhouse gas emissions by joining a regional cap-and-trade program, the Midwestern Greenhouse Gas Accord.
One state agency's work on climate change is raising some concerns from the state's recyclers. The state of Washington's Climate Action Team released a set of recommendations in November, one section of which aims to boost recycling to 80 percent of the material in the waste stream, up from about 50 percent currently. Sternoff explains that the measure is "backed by the solid waste industry, which has lost almost 20 percent of its gross revenues in the last 18 to 20 years because the materials for which they previously received tipping fees under state and local contracts are now being recycled." He fears that laws created as an outgrowth of these recommendations might impose new permitting burdens on the recycling industry and require metal and paper recyclers to bid out hauling from private recyclable suppliers. "These materials have never been part of the waste stream and have always been recycled by ReMA members," Sternoff says.
Shaping the Agenda
Whether the issue is materials theft, electronic scrap, greenhouse gas emissions, stormwater, or something entirely new, Sims' Mitchell says the best strategy for ensuring your state representatives actually represent you and look out for your interests is to work with them early and often. "For the longest time, the scrap industry and ReMA had a wait-and-see attitude" when it came to involvement in lawmaking, he says, getting involved only when a proposal had the potential to seriously damage the industry. "That can be problematic," he explains, "because if you don't know your assembly folks on the local level, then they automatically think you're the bad guy."
He advocates a more proactive approach, building relationships with lawmakers even when they don't have scrap on their agenda. "As soon as you have some of those people come to your facility and see with their own eyes what the challenges are in our business," he says, "they understand that some of the things they propose fundamentally don't work." •
Theodore Fischer is a writer based in Silver Spring, Md.
Materials theft, electronics recycling, and stormwater were among the hot-button scrap issues state lawmakers addressed in 2008.