CHARLESTON – The Senate Finance Committee approved a bill to crack down on a recent uptick in catalytic converter theft, though some believe the bill punishes scrap yards who already abide by current laws.

Senate Bill 626 updates the regulation of catalytic converter purchases by West Virginia scrapyards. The bill was introduced by Senate Judiciary Committee Chairman Charles Trump, R-Morgan, and co-sponsored by committee Vice Chairman Ryan Weld, R-Brooke, Senate Minority Whip Mike Woelfel, D-Cabell, and state Sen. Rupie Phillips, R-Logan.

The bill would require documentation to be shown to scrap dealers proving that the person attempting to sell the converter is the lawful owner or authorized to sell the converter. Under current law, documentation is only required when someone attempts to sell five or more converters. The bill also now requires automobile repair shops and automobile recycling businesses to show documentation before being allowed to sell a catalytic converter to a scrap dealer.

The bill requires scrap dealers to pay for catalytic converters by a mailed check to the seller or the seller’s bank no earlier than five days before the date of sale. Scrap dealers would be prohibited from processing, selling, or removing converters for 14 days. Dealers would be prohibited from taking possession of any converter that has had its identifying information altered or destroyed.

Any person in possession of a catalytic converter without the proof of ownership or documentation of the sale could be charged and convicted of a misdemeanor, face up to $1,000 in fines, and face up to one year in jail, with each converter counting as a separate charge.

Catalytic converters — found under automobiles and connected to mufflers — help scrub exhaust to remove harmful gases. Converters contain rare earth elements, such as platinum, palladium, and rhodium, which have become statistically more valuable than gold. While often a popular item for car thieves to grab – going so far as to crawl under cars to saw the converters off – the value of converters has jumped.

According to the National Insurance Crime Bureau, rhodium was valued at $14,500 per ounce at the end of 2020, with palladium going for $2,336 per ounce and platinum going for $1,061 per ounce. Catalytic converter thefts increased from 108 per month on average in 2018 to 1,203 per month in 2020. West Virginia is one of 18 states considering similar legislation.

“Vehicle thefts, carjackings, and break-ins are all crimes we’ve witnessed trending upward for several months, and now catalytic converter thefts are also on the rise,” said David Glawe, president and CEO of the NICB. “We have seen a significant increase during the pandemic. It’s an opportunistic crime. As the value of the precious metals contained within the catalytic converters continues to increase, so do the number of thefts of these devices. There is a clear connection between times of crisis, limited resources, and disruption of the supply chain that drives investors towards these precious metals.”

The West Virginia Automobile Dealers Association supports the bill, bringing several car dealership owners to Monday’s committee meeting. Bill Cole, the owner of the Bill Cole Automall in Bluefield and a former Republican senate president, said the thefts not only cost vehicle owners, but car lots as well, including increased costs of security and insurance premium increases. He told the committee of a recent theft of multiple catalytic converters from one of his lots.

“I called my insurance company to report a claim … and the insurance company came back and said that’s nine separate events,” Cole said. “It was nine vehicles, so it was nine deductibles … had that same crook gone and broke into my parts department and stolen 50 tires, a new engine, and a new transmission, there would have been one event and one deductible.”

Scrap dealers are required to have a business license, be registered with the West Virginia Secretary of State’s Office, have their scales registered with the Division of Labor, and file reports with the Department of Environmental Protection. According to the Secretary of State’s Office, there are 776 registered scrap metal dealers in the state.

By law, scrap metal dealers are already required to keep numerous records for purchases, such as name, home and business addresses, phone numbers; description of the vehicle used to transport the scrap and license plate number; time and date of the transaction; a complete description of the scrap; and a statement whether the scrap was purchased or used for collateral on a loan.

Scrap dealers are also required to obtain a signed certificate of ownership of the scrap being purchased and a photocopy of the seller’s drivers’ license or photo I.D. Dealers must maintain these records for up to three years for inspection by law enforcement by request.

Jason Webb, a representative of the West Virginia Recyclers Association, said the bill will only push the criminals further underground and to the internet. Webb said scrap dealers often work with law enforcement to weed out bad actors who try to sell stolen items, though often those same people are released by prosecutors and magistrates and go back to committing the same crimes.

“This bill obviously creates a burden on my folks,” Webb said. “We want to help build a better mousetrap … We want the people prosecuted. We want them thrown in jail.

“If you want us to pay by check, those people are not going to leave that material with us,” Webb continued. “They’re going to take it somewhere. It doesn’t deter anyone from stealing. It doesn’t deter anyone from buying. Someone somewhere down the line is going to purchase those stolen goods.”

Several committee members were working on a floor amendment to SB 626 to address issues raising during testimony Monday. The bill will be up for passage later in the week.

— Steven Allen Adams can be reached at [email protected]