HB1860

SECTION 1. The legislature finds that in recent years, the State has seen an increase in the number of catalytic converters being stolen from vehicles and resold for profit. News outlets reported that in 2021, the Honolulu police department received more than one thousand eight hundred reports of stolen catalytic converters, plus hundreds of attempted thefts of the devices. Catalytic converters contain precious metals such as platinum, palladium, and rhodium, making catalytic converters highly sought after by thieves due to their high resale value. Catalytic converters remove toxic elements from the exhaust stream making them essential to vehicles and thus are federally mandated to be installed on a vehicle. A catalytic converter can be stolen in less than sixty seconds, causing damage to other areas of a vehicle, leading to hundreds to thousands of dollars in repair costs.

The purpose of this Act is to:

(1) Require licensed used motor vehicle part dealers to keep records of purchases and sales of catalytic converters, and require the seller to file a written statement that the seller has the lawful right to sell and dispose of the catalytic converter, which may aid in the apprehension of those who engage in the theft and sale of catalytic converters;

(2) Establish the offense of theft of catalytic converter;

(3) Increase the penalty for engaging in the business of purchasing or selling used motor vehicle parts and accessories, or wrecking, salvaging, or dismantling motor vehicles for the purpose of reselling the parts or accessories thereof, without a license to a misdemeanor; provided that if one or more instances of engaging in such business includes transactions involving a catalytic converter, then it is a class C felony;

(4) Require scrap dealers to keep records of purchases and sales of palladium, platinum, and rhodium, which are precious metals typically found inside catalytic converters; and

(5) Require all scrap dealers to pay for palladium, platinum, and rhodium, and all used motor vehicle part dealers to pay for catalytic converters, by check to increase accountability for those who sell those substances to businesses.

SECTION 2. Chapter 289, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§289- Catalytic converters; penalty. (a) Every licensee, when the licensee purchases a catalytic converter within the State, shall obtain a written statement signed by the seller certifying that the seller has the lawful right to sell and dispose of the catalytic converter. This statement shall also contain the:

(1) Seller's name, business or residence address, and occupation;

(2) Description, including serial numbers and other identifying marks, when practical, of every catalytic converter;

(3) Amount paid to the seller;

(4) Date, time, and place of the sale; and

(5) License number of any vehicle used to deliver the property to the place of purchase.

(b) The seller shall provide a copy of a receipt that describes, with particularity:

(1) The exact item that is being offered for sale;

(2) Who issued the receipt;

(3) The date of sale of the item prior to the item being offered to the licensee; and

(4) The price, if any, of the item when obtained by the seller.

(c) If a receipt is not available, the seller shall provide to the licensee a notarized declaration, describing with particularity:

(1) The exact item that is being offered for sale;

(2) Who sold or otherwise transferred the item to the seller;

(3) The date of sale of the item; and

(4) The price, if any, of the item when obtained by the seller.

(d) If the seller does not provide a copy of the receipt or the notarized declaration as required by subsections (b) and (c), the licensee shall not purchase the catalytic converter, in whole or in part, and shall report the attempted sale to the police.

(e) If the licensee purchases any catalytic converter, in whole or in part, the licensee shall take one or more separate photographs of each individual catalytic converter offered for sale.

(f) The licensee shall require the seller to verify the seller's identity by presenting a valid photo identification card or license issued by a federal or state government agency authorized to issue valid identification. The licensee shall:

(1) Take a photograph of the seller; and

(2) Make a photocopy of the identification card or license of the seller.

(g) The licensee shall keep at the licensee's place of business the signed written statement, receipt, or notarized declaration required by subsections (b) and (c), photographs required by subsection (e), and photocopy of the identification card or license, and photograph of the seller, required by subsection (f), if applicable, from the seller for a period of two years after the date of purchase, and the statement, receipt, or notarized declaration required by subsections (b) and (c), photographs required by subsection (e), and photocopy and photograph required by subsection (f), if applicable, may be examined at any time by the director of finance, chief of police, attorney general, prosecuting attorney, or their designees.

(h) Violation of this section shall be a class C felony.

§289- Payment for catalytic converter purchased by licensee; check; mailing. (a) Payment for a catalytic converter shall be made by check payable to the seller. At the time of sale of the catalytic converter, the seller shall present to the licensee a valid photo identification card or license of the seller issued by a federal or state government agency authorized to issue valid identification. The check may be mailed to the address shown on the identification or the licensee may arrange for the check to be picked up personally by the seller at the place of business of the licensee.

(b) Violation of this section shall be a class C felony."

SECTION 3. Chapter 708, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§708- Theft of catalytic converter. (1) A person commits the offense of theft of catalytic converter if the person commits theft of a catalytic converter.

(2) For the purposes of this section, "catalytic converter" means a device that is incorporated in a motor vehicle's exhaust system and contains a catalyst for converting pollutant gas emissions into less harmful emissions.

(3) Theft of catalytic converter is a class C felony."

SECTION 4. Section 289-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Catalytic converter" means a device that is incorporated in a motor vehicle's exhaust system and contains a catalyst for converting pollutant gas emissions into less harmful emissions."

SECTION 5. Section 289-2, Hawaii Revised Statutes, is amended to read as follows:

"§289-2 Unlicensed person not to engage in business. (a) It shall be unlawful for any person or organization, not duly licensed under this chapter, to engage in the business of:

(1) Purchasing or selling used motor vehicle parts or accessories; or

(2) Engaging in the business of wrecking, salvaging, or dismantling motor vehicles for the purpose of reselling the parts or accessories thereof.

(b) Violation of this section shall be a misdemeanor; provided that if the violation includes one or more purchases, sales, or negotiations for purchase or sale, of a catalytic converter, it shall be a class C felony."

SECTION 6. Section 445-233, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (b) to read:

"(b) If the scrap presented for purchase is copper, palladium, platinum, rhodium, a beer keg, or an urn, in whole or in part, the seller shall provide a copy of a receipt that describes, with particularity:

(1) The exact item that is being offered for sale;

(2) Who issued the receipt;

(3) The date of sale of the item prior to the item's being offered to the scrap dealer; and

(4) The price, if any, of the item when obtained by the seller."

2. By amending subsections (d) to (f) to read:

"(d) If the seller does not provide a copy of the receipt or the notarized declaration as required by subsections (b) and (c), the scrap dealer shall not purchase the copper, palladium, platinum, rhodium, beer keg, or urn, in whole or in part, and shall report the attempted sale to the police.

(e) If the scrap dealer purchases any copper, palladium, platinum, rhodium, beer keg, or urn, in whole or in part, the scrap dealer shall take [~~a photograph or~~] one or more separate photographs of [~~all of the copper, beer keg, or urn,~~] each individual item offered for sale[.]; provided that if the item is in powdered or granular form then the photographs of the powdered or granular substance in aggregate shall be sufficient.

(f) The scrap dealer shall also require the seller to verify the seller's identity by presenting a valid photo identification card or license issued by a federal or state government agency authorized to issue valid identification. If the scrap being offered for sale is copper, palladium, platinum, rhodium, a beer keg, or an urn, in whole or in part, the scrap dealer shall:

(1) Take a photograph of the seller; [or] and

(2) Make a photocopy of the identification card or license of the seller."

SECTION 7. Section 445-233.5, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:

"[[]§445-233.5[]] Payment [of] for copper, palladium, platinum, or rhodium purchased by scrap dealer or recycler; check; mailing. (a) If the scrap dealer or recycler, as applicable, purchases any copper, palladium, platinum, or rhodium, payment for the [~~copper~~] items shall be made by check payable to the seller. At the time of sale of the copper, palladium, platinum, or rhodium, the seller shall present to the scrap dealer or recycler a valid photo identification card or license of the seller issued by a federal or state government agency authorized to issue valid identification. The check may be mailed to the address shown on the identification, or the scrap dealer or recycler may arrange for the check to be picked up personally by the seller at the place of business of the scrap dealer or recycler."

SECTION 8. Section 445-235, Hawaii Revised Statutes, is amended to read as follows:

"§445-235 Prohibitions; penalty. (a) Any person who violates section 445-232, 445-233, or 445-233.5, or any person who falsifies a statement required by section 445-233, shall be guilty of a misdemeanor [~~and shall be sentenced in accordance with chapter 706, except that~~].

(b) Where the violation of section 445-232, 445-233, or 445-233.5, or falsification of a statement required by section 445-223, involves palladium, platinum, or rhodium, it shall be a class C felony.

(c) In addition to any penalties the court may impose pursuant to subsections (a) and (b), the court shall [~~impose a~~] order at minimum [~~sentence of~~]:

(1) A fine of $1,000 for the first offense;

(2) A fine of $3,000 for the second offense; and

(3) A fine of $5,000 and the suspension of the scrap dealer's license for a period of six months for the third or subsequent offense; provided that if the third or subsequent offense occurs within a five-year period from the occurrence of two prior offenses, the scrap dealer shall be subject to license revocation."

SECTION 9. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1860
THIRTY-FIRST LEGISLATURE, 2022
STATE OF HAWAII