HB-4593, As Passed House, October 31, 2013

SUBSTITUTE FOR

HOUSE BILL NO. 4593

     A bill to amend 2008 PA 429, entitled

"Nonferrous metal regulatory act,"

by amending the title and sections 1, 3, 5, 7, 11, 13, and 17 (MCL

445.421, 445.423, 445.425, 445.427, 445.431, 445.433, and 445.437)

and by adding section 10; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

     An act to regulate the purchase and sale of certain nonferrous

metals; to provide for disclosures by certain persons regarding

certain transactions; to require the creation of records for

certain purposes and for the use of certain databases by certain

persons; scrap metal and other items that contain ferrous or

nonferrous metal to scrap metal dealers; to require sellers to

provide and scrap metal dealers to obtain certain information at

the time of a purchase transaction; to require that scrap metal

dealers implement and maintain records of their purchase

transactions and to make those records available for law

enforcement purposes; and to provide for penalties and remedies.

Sec. 1. This act shall be known and may be cited as the

"nonferrous "scrap metal regulatory act".

     Sec. 3. As used in this act:

     (a) "Dealer" means any person that is not a first purchaser

who purchases nonferrous metals from any seller. Dealer includes,

but is not limited to, a person, whether or not licensed under

state law or local ordinance, that operates a business as a scrap

metal recycler, scrap processor, secondhand and junk dealer, or

other person who purchases any amount of nonferrous metal on a

regular, sporadic, or 1-time basis. Dealer does not include an

automotive recycler regulated by and complying with section 217 of

the Michigan vehicle code, 1949 PA 300, MCL 257.217; section 18 of

the motor vehicle service and repair act, 1974 PA 300, MCL

257.1318; or section 2 of 1986 PA 119, MCL 257.1352, when engaging

in activities that meet the definition of automotive recycler as

defined in section 2a of the Michigan vehicle code, 1949 PA 300,

MCL 257.2a.

     (b) "Documentation" means a signed statement that indicates

where the person obtained the article, that the person is

authorized to sell the article, or other evidence that reasonably

demonstrates ownership of the article and the source of the

article.

House Bill No. 4593 (H-2) as amended October 24, 2013

                          as amended October 31, 2013

(a) (c) "Ferrous metal" means a metal that contains

significant quantities of iron or steel.

(b) (d) "First purchaser" means the first buyer of a

manufactured product containing item that contains ferrous or

nonferrous metal in a retail or business-to-business transaction.

Persons purchasing nonferrous metal A person that purchases scrap

metal, or other [ ] property described in section 10, in

violation of this act, or an automotive recyclers, pawnshops,

recycler, pawnshop, scrap metal recyclers, and recycler, or scrap

processors are processor is not considered a first

purchasers.purchaser.

     (c) "Governmental unit" means a subdivision, agency,

department, county, parish, municipality, or other unit of the

government of the United States, this state, another state, or a

foreign country.

(d) (e) "Industrial or commercial account customer" means any

person, operating a person that operates from a fixed location ,

that and is a seller of ferrous or nonferrous scrap metal to a

scrap metal recycler pursuant to dealer under a written agreement

that provides for regular or periodic sale, delivery, purchase, or

receiving of scrap metal.

(e) (f) "Nonferrous metal" means a metal that does not contain

significant quantities of ferrous metal but contains copper, brass,

platinum [GROUP]-based metals, aluminum, bronze, lead, zinc, nickel, or

alloys of those metals.

(f) (g) "Person" means an individual, partnership,

corporation, limited liability company, joint venture, trust,

House Bill No. 4593 (H-2) as amended October 24, 2013

association, or other legal entity.

(g) (h) "Public fixtures fixture" means articles containing

nonferrous metal that are used or located in areas open to the

public and include, but are not limited to, utility access covers;

street light and fixtures; road and bridge guard rails; highway or

street signs; water meter covers; traffic directional and control

signs; traffic light signals; telecommunications cable; utility-

related articles; and historical markers.an item that contains

ferrous or nonferrous metal and is owned or under the exclusive

control of a governmental unit. The term includes, but is not

limited to, a street light pole or fixture, road or bridge

guardrail, traffic sign, traffic light signal, or historical

marker.

     (h) "Purchase transaction" means a purchase of scrap metal[, or

the purchase of property described in section 10(a) to (d) if the

knowing purchase or offer to purchase that property is not prohibited

by that section,] by

a scrap metal dealer. The term does not include any of the

following:

     (i) The purchase of 1 or more used or secondhand, distressed,

or salvage vehicles or vehicle parts by a used or secondhand

vehicle dealer or used or secondhand vehicle parts dealer that is

licensed as a dealer under section 248 of the Michigan vehicle

code, 1949 PA 300, MCL 257.248, and is acting within the scope of

that dealer's license.

     (ii) The purchase of 1 or more used or secondhand, distressed,

or salvage vehicles, vehicle parts, or vehicle scrap by a vehicle

scrap metal processor, vehicle salvage pool operator, or foreign

salvage vehicle dealer that is licensed as a dealer under section

248 of the Michigan vehicle code, 1949 PA 300, MCL 257.248, and is

House Bill No. 4593 (H-2) as amended October 24, 2013

acting within the scope of that dealer's license.

     (iii) The purchase of 1 or more used or secondhand, distressed,

or salvage vehicles, vehicle parts, or vehicle scrap by an

automotive recycler that is licensed as a dealer under section 248

of the Michigan vehicle code, 1949 PA 300, MCL 257.248, if the

transaction is authorized under section 217c of the Michigan

vehicle code, 1949 PA 300, MCL 257.217c; section 18 of the motor

vehicle service and repair act, 1974 PA 300, MCL 257.1318; or

section 2 of 1986 PA 119, MCL 257.1352.

     (iv) The purchase of scrap metal by a mill, foundry, die

caster, or other manufacturing facility that purchases scrap metal [from

an industrial or commercial customer]

for its own use in the production of metal articles or materials

and does not in the ordinary course of its business purchase scrap

metal for resale.

     (v) The purchase of scrap metal from a governmental unit.

     (i) "Record" means a paper, electronic, or other generally

accepted method of storing information in a retrievable form.

     (j) "Scale operator" means the employee of a scrap metal

dealer who operates or attends a scale that is used to weigh the

scrap metal in a purchase transaction.

     (k) "Scrap metal" means ferrous or nonferrous metal, or items

that contain ferrous or nonferrous metal, that are sold or offered

for sale for the value of the ferrous or nonferrous metal they

contain rather than their original intended use; ferrous or

nonferrous metal removed from or obtained by cutting, demolishing,

or disassembling a building, structure, or manufactured item; or

other metal that cannot be used for its original intended purpose

but can be processed for reuse in a mill, foundry, die caster, or

other manufacturing facility.

     (l) "Scrap metal dealer" means a person or governmental unit

that buys scrap metal and is not a first purchaser. The term

includes, but is not limited to, a person, whether or not licensed

under state law or local ordinance, that operates a business as a

scrap metal recycler, scrap processor, secondhand and junk dealer,

or other person that purchases any amount of scrap metal on a

regular, sporadic, or 1-time basis.

(m) (j) "Scrap metal recycler" means a person that purchases

ferrous or nonferrous metal that is intended for recycling or

reuse, whether regarded as a scrap processor, core buyer, or other

similar business operation.

(n) (k) "Scrap processor" means that term as defined in

section 3 of 1917 PA 350, MCL 445.403.

(o) (l) "Seller" means any individual or a person that either

regularly, sporadically, or on a 1-time basis receives

consideration from any other person from the purchase by a scrap

metal dealer of nonferrous scrap metal offered by that seller.

     Sec. 5. (1) A dealer shall do all All of the following apply

to a scrap metal dealer:

     (a) Produce and maintain records as required under section

7(2).

     (b) Participate in a database meeting the requirements of

section 11.

     (c) Tag and hold any nonferrous metal as provided for in

section 9.

     (d) Pay a seller by a method capable of being traced from the

dealer to the seller. Payment by cash or currency of more than

$50.00, barter, or trade is not considered a payment that complies

with the requirement of this subdivision. Payment of cash in any

amount in a transaction involving predominantly copper articles is

considered a violation of this subdivision.

     (e) In the case of a transaction involving nonferrous metal,

verify that the seller is at least 16 years of age.

     (a) Unless subdivision (b) applies, and except as provided in

subdivision (c), beginning 120 days after the effective date of the

amendatory act that added this subdivision, a scrap metal dealer

shall only pay a seller with 1 of the following in a purchase

transaction:

     (i) A check or money order. A scrap metal dealer shall make and

retain a photograph or digital or electronic image of the delivery

of the check or money order to the seller or individual acting on

behalf of the seller in the purchase transaction.

     (ii) An electronic payment card or encrypted receipt that may

only be converted to cash in an automated teller machine that is

located on the scrap metal dealer's premises; is used for the sole

purpose of dispensing cash in connection with purchase

transactions; and provides a digital or electronic image of the

dispensing of the cash to the seller.

     (b) Except as provided in subdivision (c), in a purchase

transaction of any of the following items, a scrap metal dealer

shall not pay the seller until 3 business days after the date of

the transaction, and shall pay the seller after that period by

making a direct deposit or electronic transfer to the seller's

account at a financial institution; by mailing a check, money

order, payment card, or receipt described in subdivision (a) to the

seller, at the address shown on the identification presented under

subsection (2)(a); or by delivering a check, money order, payment

card, or receipt described in subdivision (a) to the seller at the

scrap metal dealer's premises:

     (i) Catalytic converters, unless the seller is an automotive

recycler as defined in section 2a of the Michigan vehicle code,

1949 PA 300, MCL 257.2a; a manufacturer or wholesaler of catalytic

converters; or a muffler shop, tire store, or other retail business

that sells converters separately or as part of an exhaust system.

     (ii) Air conditioners, air conditioner evaporator coils or

condensers, or parts of air conditioner evaporator coils and

condensers.

     (iii) Copper wire, including copper wire that is burned in whole

or in part to remove the insulation.

     (c) All of the following apply in a purchase transaction with

an industrial or commercial customer:

     (i) The scrap metal dealer may pay using any of the following

forms of payment, as agreed to by the scrap metal dealer and the

industrial or commercial customer:

     (A) By check, money order, or payment card or receipt

described in subdivision (a)(ii). If a payment described in this

sub-subparagraph is mailed to the industrial or commercial

customer, the scrap metal dealer may mail that payment to the

street address or post office box of the industrial or commercial

House Bill No. 4593 (H-2) as amended October 24, 2013

customer or to another person or post office box as directed by the

industrial or commercial customer.

     (B) By bank wire transfer or other electronic delivery to an

account of the industrial or commercial customer.

     (ii) The 3-day waiting period described in subdivision (b) does

not apply to the purchase of any of the items described in that

subdivision by an industrial or commercial customer.

     (d) A scrap metal dealer may accept barter or a trade or

exchange of scrap metal or other [ ] property in a purchase

transaction as all or part of the consideration for that

transaction.

     (e) A scrap metal dealer in a purchase transaction shall

examine the identification presented under subsection (2)(a) by the

seller or individual acting on behalf of the seller, and if the

identification presented displays the date of birth of the

individual, confirm that the individual is at least 16 years old

based on that date of birth.

[

House Bill No. 4593 (H-2) as amended October 24, 2013

                                                        ]

(F)] A scrap metal dealer shall ensure that it trains each

scale operator, purchaser, and supervisor employed by the dealer

concerning the legal requirements of this act and the

responsibilities of the scrap metal dealer under this act.

     (2) A seller shall do all of the following:In a purchase

transaction, all of the following apply to a seller, if the seller

is an individual, or to an individual acting as an agent or

representative of a seller:

     (a) Present to the dealer an He or she must present his or her

operator's or chauffeur's license, military identification card,

Michigan identification card, passport, or other government-issued

identification containing a his or her photograph to the scrap

metal dealer and allow the scrap metal dealer to make a photocopy

or electronic copy of the identification.

     (b) Allow He or she must allow the scrap metal dealer to make

a take his or her thumbprint, to be used only for identification

purposes by the scrap metal dealer and for investigation purposes

by a law enforcement agency.

     (c) Execute He or she must provide the scrap metal dealer with

a signed statement indicating that the seller certifies that he or

she is the owner of, or is otherwise authorized to sell, the

nonferrous scrap metal offered for purchase to the scrap metal

dealer and is at least 16 years old.

     (d) Attest to the lack of any criminal convictions An

individual who has been convicted of a crime involving the theft,

conversion, or sale of nonferrous metals.scrap metal may not enter

into a purchase transaction. As part of a purchase transaction, the

individual shall certify that he or she has not been convicted of a

crime described in this subdivision.

     Sec. 7. (1) Except Subject to subsection (4), and except as

otherwise provided in this subsection, section, a scrap metal

dealer shall produce prepare and maintain an a separate, accurate,

and legible record of each purchase transaction. The dealer shall

maintain the records produced under described in this section for

at least 1 year; , the dealer shall keep the records in a location

that is readily accessible to a local, state, or federal law

enforcement agency for inspection during normal business hours; ,

and the dealer shall make the records, or copies of those records,

available on request to any local, state, or federal law

enforcement agency. upon reasonable suspicion of violation of this

act.

     (2) The record of a purchase transaction regarding nonferrous

metal shall contain described in subsection (1) must include all of

the following:

     (a) The name and address of the seller and the name and

address of the individual who is delivering the scrap metal if he

or she is not the seller. If an individual is a seller or

representative of a seller in more than 1 purchase transaction, the

scrap metal dealer may retain a copy of the individual's

information or document described in this subdivision in a separate

file and use that information in future purchase transactions.

(b) (a) The name, address, and identifying number from the

seller's operator's or chauffeur's license, military identification

card, Michigan identification card, passport, or other government-

issued identification containing a photograph. presented under

section 5(2)(a). A legible scan or photocopy of the identification

is considered satisfactory in fulfilling meets the requirement of

this subdivision. In the case of a repeat seller, a copy of the

information may be kept on file with the dealer and be used for If

an individual is a seller or representative of a seller in more

than 1 purchase transaction, the scrap metal dealer may retain a

copy of the information or document described in this subdivision

in a separate file and use that information in future purchase

transactions.

(c) (b) The If the scrap metal is delivered by licensed

vehicle, the license plate number of the vehicle. delivering the

nonferrous metal.

(d) (c) The date and time of the purchase transaction.

(e) (d) A description of the predominant types of scrap metal

purchases, purchased, made in accordance with the custom of the

trade.

(f) (e) The weight, quantity, or volume of metal, made the

scrap metal purchased, described and calculated in accordance with

the custom of the trade; the name of the scale operator who weighs

and inspects that property; and the name of the employee of the

scrap metal dealer who purchased or authorized the purchase of the

scrap metal on the dealer's behalf if the purchaser was not the

scale operator.

     (g) A photograph or digital, electronic, or video image of the

scrap metal purchased. A photograph or digital, electronic, or

video image that meets 1 of the following is sufficient for

purposes of this subdivision even if each item of scrap metal is

not shown in the image:

     (i) If the scrap metal and the vehicle in which it is delivered

are weighed, an overhead photograph or image of the vehicle and the

scrap metal in the vehicle on the scale.

     (ii) If only the scrap metal is weighed, a photograph or image

of the scrap metal on the scale.

(h) (f) The consideration paid and the method of payment.

(i) (g) A The signed statement from the seller that the seller

is the owner of the metal or is otherwise authorized to sell the

metal subject to the transaction.described in section 5(2)(c).

(j) (h) A legible thumbprint of the seller.described in

section 5(2)(b).

     (3) In the case of a seller that is A scrap metal dealer is

not required to obtain the information described in subsection (2)

for a purchase transaction with an industrial or commercial account

where payment is made by a method capable of being traced from the

dealer to the seller and payment is made customer that meets all of

the following:

     (a) Payment is made directly to the business, the dealer is

not required to produce the record described in subsection (2) so

long as the industrial or commercial customer.

     (b) The personal and business identifying information of the

industrial or commercial account seller customer is on file with

the scrap metal dealer and conforms to a written description of the

type of nonferrous scrap metal or articles customarily purchased by

House Bill No. 4593 (H-2) as amended October 24, 2013

the scrap metal dealer from that seller, and the information

customer.

     (c) The information on file with the scrap metal dealer under

subdivision (b) is periodically reviewed at least every 2 years and

validated as current or updated by the scrap metal dealer.

     (4) A scrap metal dealer may utilize an electronic record-

keeping system for purposes of subsection (1) if that system allows

for immediate access to each seller's purchase transaction

activities, documents, and images, including, but not limited to,

electronic copies of the records described in subsection (2) or

(3), the payment information contained in the card or receipt, and

the image of the seller described in section 5(1)(a)(ii).

     Sec. 10. A person shall not knowingly sell or attempt to sell

to a scrap metal dealer, and a scrap metal dealer shall not

knowingly purchase or offer to purchase, any of the following types

of [ ] property:

     (a) Public fixtures. This subdivision does not apply if the

seller is a governmental unit or the seller has written

authorization from the governmental unit that owned the property to

sell the property.

     (b) Metal articles or materials that are clearly marked as

property belonging to a person other than the seller[. THIS SUBDIVISION

DOES NOT APPLY IF] the

seller has authorization from that person to sell the property.

     (c) A commemorative, decorative, or other cemetery-related or

apparently ceremonial article. This subdivision does not apply if

the seller is the owner of the article; if the seller is authorized

by the owner of the article to sell the article; or if the seller

of a cemetery-related article is the cemetery in which the article

was located.

     (d) Metal articles or materials removed from property owned by

a railroad company or from a railroad right-of-way. This

subdivision does not apply if the seller is the owner of the metal

articles or materials; is the manufacturer of the metal articles or

materials; is a contractor engaged in the business of repairing

railroad equipment; or is a person that has written authorization

from that owner, manufacturer, or contractor to sell those metal

articles or materials.

     Sec. 11. (1) A scrap metal dealer shall register with or

subscribe to, and maintain that registration or subscription with,

and use in the conduct of its business, an internet-based database

available to scrap metal dealers, law enforcement agencies, and the

general public that lists and tracks, at a minimum, thefts of

nonferrous scrap metal. and articles containing nonferrous metals.

The database may be reasonably limited in terms of time and

geographical area.

     (2) The existing database established by the institute of

scrap recycling industries, inc., referred to as the ISRI theft

alert system, is considered an appropriate internet-based database.

A scrap metal dealer may register with or subscribe to any other

database that provides substantially the same services as the a

database described in subsection (1).

     (3) A scrap metal dealer shall ensure that it makes available

to each of its employees engaged in purchasing or weighing scrap

metal sold or offered for sale to the scrap metal dealer each theft

House Bill No. 4593 (H-2) as amended October 24, 2013

alert, or similar notice that a scrap metal theft has occurred,

that the scrap metal dealer receives from the database service

described in this section, and that those employees review any

recent alerts or similar notices that they have not previously

reviewed on a daily basis.

     Sec. 13. (1) A person who violates section 7(1) or section 9

knowing or having reason to know that he or she is violating those

sections If a person violates section 7, and knows or should have

known that section 7 was violated, the person is guilty of a

misdemeanor punishable by a fine of not more than $500.00 or

imprisonment for not more than 93 days, or both. If the violation

is the result of a malfunction of an electronic record-keeping

system described in section 7(4), it is an affirmative defense in

an action against the scrap metal dealer that utilizes that system

that the dealer diligently pursued repair of the electronic record-

keeping system after the malfunction occurred, and implemented and

maintained a manual record-keeping system for purchase transactions

that occurred while the electronic record-keeping system was

malfunctioning.

     (2) A person who buys or sells nonferrous metal articles

knowing or having reason to know that they are stolen [In connection

with a purchase transaction, each] of the

following is guilty of a felony punishable by imprisonment for not

more than 5 years or a fine of not more than $5,000.00, or both,

for a first offense and is guilty of a felony punishable by

imprisonment for not more than 5 years or a fine of not more than

$10,000.00, or both, for a second or subsequent offense:.

     (a) A scrap metal dealer that purchases scrap metal or an item

House Bill No. 4593 (H-2) as amended October 24, 2013

of [ ] property described in section 10 and knew or should

have known that it was stolen.

     (b) A person that sells scrap metal or an item of [ ]

property described in section 10 to a scrap metal dealer and knew

or should have known that it was stolen.

     Sec. 17. (1) A person may bring a private cause of action

against a seller or a scrap metal dealer, in a court of competent

jurisdiction, for monetary damages suffered from violation of this

act. by a seller or a dealer, or both.

     (2) The If the court in an action described in subsection (1)

finds that the violation included the purchase or sale of stolen

property and finds that the purchaser in an action against the

purchaser, or the seller in an action against the seller, knew or

should have known that the property was stolen, the court shall

award treble damages for the value of the nonferrous metal article

property stolen. The court may award costs regarding any aspect of

an action brought under subsection (1). As used in this subsection,

"value of the nonferrous metal article property stolen" means the

greatest of the following:

     (a) The replacement cost of the stolen article.property.

     (b) The cost of repairing the damage caused by the larceny of

that article.the property.

     (c) The total of subdivisions (a) and (b).

     (3) The court may award costs and reasonable attorney fees in

an action brought under subsection (1).

     Enacting section 1. Section 9 of the nonferrous metal

regulatory act, 2008 PA 429, MCL 445.429, is repealed.

     Enacting section 2. This amendatory act does not take effect

unless House Bill No. 4595 of the 97th Legislature is enacted into

law.