ST. PAUL — A bill aimed at curbing catalytic converter thefts by creating new scrap sale rules and penalties is headed through the Minnesota Legislature with bipartisan support.
Thefts of catalytic converters, auto parts containing precious metals that can sell for up to $1,500, surged in the pandemic years. And Minnesota ranks third in the nation for thefts, behind California and Texas, according to state law enforcement.
Minnesota had just 40 reports of converter thefts in 2018, according to the Insurance Federation of Minnesota. In 2021, St. Paul and Minneapolis saw around 4,000 reports — more than the entire country just a few years before.
A proposal that moved through two state Senate committees this week would establish new rules to fight the trend, including requiring anyone removing a catalytic converter attached to a vehicle to label it with the VIN.
“We would make it a crime to possess a used catalytic converter that’s not attached to the car if it doesn’t have the vehicle identification number on it,” Sen. John Marty, the Roseville DFLer who authored the bill, told the Senate Commerce Committee on Tuesday. “The bill would allow you even to do it with a permanent maker or a sticker or something else.”
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In addition to the VIN label requirement, sellers would only be able to do business with licensed scrap dealers in Minnesota. Dealers would be required to keep track of converter sales and report them to a database similar to pawn shop databases used by some jurisdictions.
Dealers would not be allowed to pay cash for converters and would have to hold on to them for five days before doing anything with them. The Department of Public Safety would also conduct audits of scrap dealers to ensure compliance with the tracking rules. The tracking program would cost $298,000 a year.
Catalytic converters are auto components designed to scrub pollutants from auto exhaust. They contain platinum, palladium and rhodium and can sell for anywhere from $400-$1,500, said Marty, who noted that rhodium was worth $26,000 an ounce last year — more than 12 times the value of gold. They’re easy to steal, too — they can be quickly removed from the bottom of a vehicle using power tools.
Joseph Boche, special agent for the Minnesota Commerce Fraud Bureau, said that last year there were somewhere around 600,000-700,000 thefts in the U.S. resulting in about $1.5 billion in repairs. The average replacement cost is $2,600, he said, and some popular theft targets like the 2007-2009 Toyota Prius can cost up to $3,300 to repair. Costs go beyond repairs, too. People who have their vehicle’s converters stolen must often wait months for them to be fixed, leading to added transportation expenses and inconvenience.
Boche told the commerce committee that he’s investigated operations that sell as many as 2,000 converters every other week, and estimates there could be as many as 100,000 thefts in Minnesota last year that went unreported. Groups have become organized too, he added.
“People look at this as just a property crime. Well, it’s gone beyond a property crime. It’s now organized crime,” he said. “This is what people’s business is. They are making money on it. There are gangs of people that are going out on a daily basis with a team of three or four people; frequently, a couple of them armed.”
Boche estimates there was a 33% increase in thefts each year since 2020. Kurt Hallstrom, a senior commander for the Eastern District of the St. Paul Police Department, said that lined up with what his agency has seen. There were 1,166 thefts in 2020, 1,877 in 2021 and 2,380 in 2022, he said.
The Minnesota Chiefs of Police Association and Insurance Federation of Minnesota testified in favor of the bill earlier this week.
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The Institute of Scrap Metal Recycling Industries said the industry was willing to do its part to fight bad actors but had concerns about added regulation on business. Lobbyist Jeremy Estenson said criminals also might just take the converters out of state, circumventing the labeling and tracking rules.
The Commerce and Senate Judiciary Committees heard the bill this week. Its next stop is the Senate Finance Committee.
Follow Alex Derosier on Twitter @xanderosier or email aderosier@forumcomm.com .
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