PHOENIX - An Arizona lawmaker is proposing new legislation to crack down on the catalytic converter black market and the thieves fueling it.

FOX 10 broke down the spike in cases Arizona law enforcement agencies face and the hit victims are taking in the wallet. Now, there's a potential solution at the state capitol.

It's important to note, there's already a law in place against a person buying or selling a used catalytic converter. However, Arizona Rep. Diego Espinoza wants to tighten up loopholes by introducing new language to give this law more teeth and ultimately help law enforcement.

Who's actually buying the stolen converters and where do they end up? That's part of the battle, but Espinoza says this bill would deter the black market buyers.

Catching a crook in the act of stealing a catalytic converter is hard. Police across the Valley are trying to keep up with a wave of thefts, especially in Phoenix – 2021 saw a spike of nearly 6,500% in reports.

"If we were to catch somebody after the fact, and they were in possession of a catalytic converter, unless we knew where they were coming from, it would be hard to link that particular converter back to the victim’s car," explained Det. Adam Popelier with the Phoenix Police Department.

So, who's actually buying stolen converters? Popelier says the chain of crimes starts with the theft and converters change hands multiple times, landing in possession of a "middleman" who could pay the thief a couple of hundred bucks.

The more converters collected, the more lucrative as they are selling the stolen goods in bulk for a profit at a scrapyard. The converters get "de-canned," meaning, the ceramic honeycomb inside contains pricey metals gets removed and sent to an illegal smelter where the platinum, rhodium and palladium are extracted, distilled and sold to manufacturers.

In Arizona, it's "unlawful for a person to purchase or sell a used converter unless the purchase or sale is in the ordinary course of business by a commercial motor vehicle parts or repair business in connection with the sale or installation of a new catalytic converter."

Yet, it still happens. Current state law doesn't make it illegal to possess, solicit or advertise a used catalytic converter, the black market can be accessed online.

On apps and websites like OfferUp, Facebook Marketplace, Craiglist and eBay, you can find a used catalytic converter easily listed by many individuals, not businesses.

The class 1 misdemeanor doesn't apply to scrap metal dealers purchasing the converter from an industrial account or after the converter is authorized for release by a peace officer of the jurisdiction in which the transaction occurs.

"Soon as we explain to them what the process is and they know that they cannot bring it in here without proper identification and proper proof or purchase of the one that they’re actually replacing it with, they call somebody else," says Trent Houg, president of I Buy Scrap in Tempe, a large-scale facility for scrap metal recycling.

His business can handle over 250,000 pounds of ferrous material on any given day, but Houg says there's strict protocol when catalytic converters are offered. If the transaction is legit, Houg says photos of the converter and the seller's ID are taken.

He then reports the sale online to the Department of Public Safety within 24 hours.

"We have sophisticated computer programs and we actually upload every night to a centralized database that the police are actually looking at it so if there are transactions that they’re actually looking at they can quickly identify who the people are and the material they’ve actually sold."

Rep. Espinoza believes his proposed legislation can slow down the black market and deter catalytic converter thefts. HB 2562 has now crossed over to the state Senate, heard by the Committee on Transportation and Technology on March 14.

It passed 9-0, and next, it heads to the Senate's rules committee.

HB 2652 would make it illegal to solicit, advertise or possess a used converter outside of buying or selling one. Again, it does not apply to licensed automotive recyclers and scrap metal dealers doing business legally, but Espinoza wants to hold all dealers accountable.

"Also ensuring that we are going over to the scrap metal dealers and ensuring that we have additional reporting mechanisms in place and reporting back to DPS to ensure that we can track and monitor the sales," Espinoza said.

Not only requiring reporting of transactions, but inspection and re-inspection periods. A scrap metal dealer would need to register with the state and sign up on a free theft notification website allowing law enforcement to send details on stolen items within a 100-mile radius of the theft.

Dealers would also notify law enforcement when offered any suspicious materials.

If the legislation is passed, violations can lead to civil fines of $500 to $4,000, and law enforcement will be able to crack down on used converter listings online.

"What we’re doing is actually including provisions in place where we can actually monitor these individuals and apprehend them," Espinoza said.

State Senator Lisa Otondo weighed in at the hearing, saying, "I know two people within a two block radius in two different households that have had their catalytic converters stolen. This problem is huge. Thank you for bringing this forward ..."

Espinoza breaks down the cost for insurance companies, saying, "From one current insurance company that's doing business here, in 2019, there were 4.6 million dollars in claims for just catalytic converters. In 2020, $20 million. In 2021, $62.6 million dollars in claims. These are just for catalytic converters."

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