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Metal Theft 2013 Legislative Update

Metal Theft | 2013 Legislative Update

Jocelyn Durkay 2/1/2014

Introduction

MetalThe high price of copper and other metals—combined with extended economic hardship, increasing numbers of vacant homes and difficulties with enforcement of existing metals theft laws—continues to drive metal theft across the country, effecting urban, rural and agricultural communities.

Although lower than peak prices in recent years, copper’s per pound value ranges from double to triple that of values in the early 2000s, motivating thieves to take greater risks when attempting to steal wiring and piping from utility property or electrical infrastructure. The U.S. Department of Energy estimates that metal theft and resulting power outages, revenue losses, and repairs costs businesses nearly $1 billion annually. A recent explosion at the University of California, Berkeley in October 2013 that injured four individuals was found to be a result of copper wire theft.

Increased incidents of metal theft in recent years have provoked states, utilities, local police forces and industry to act by regulating metal sales, increasing requirements for licensed dealers and increasing penalties for illegal activity.

Currently 49 states have legislation regarding metal theft or scrap metal transactions; in the 2013 legislative session, North Dakota became the 49th state to enact a separate scrap metal purchase law.

Metal theft legislation continued to be a topic of interest in state legislatures in 2013: 40 bills were enacted in 29 states during the 2013 legislative session and a number of bills have been carried over to the 2014 session. Additionally, two bills in California and one in New Jersey were vetoed. At least 161 bills were considered in 39 states in the 2013 session. Bills have sought to increase requirements for documentation or seller identification, increase licensing requirement for scrap metal dealers and strengthen penalties for violations.

 

50-state map

 

State Action

Record Keeping

In the 2013 legislative session a number of states introduced legislation to increase existing documentation requirements, often including digital recordings or photographs of metal property, prospective sellers and seller’s vehicle license plates. For example, for the first three nonferrous or stainless steel transactions with the same seller within a one year, Idaho’s H.B. 241 required scrap metal dealers to make photographic or video records of a seller’s face, head and shoulders; the seller’s vehicle with the metal property clearly visible; the vehicle with the license plate clearly visible and the metal property. After the fourth transaction from the same seller within one year, documentation is no longer required.

Missouri’s legislation, S.B. 157, clarified the existing requirement for scrap metal dealers to document a seller’s government-issued photo identification by stipulating that scrap metal dealers document a seller’s vehicle license plate; gender, birth date and a photograph of the seller if the information is different than that on the seller’s government-issued identification.

Utah H.B. 108 allowed for abbreviated documentation for repeat sellers who use the same vehicle for each transaction, after completing an initial detailed record. Only a photograph of the seller and the seller’s signature are required for subsequent transactions.

A Virginia bill, H.B. 1481, required scrap metal dealers to take a photographic or video image of “proprietary articles” purchased and store the image for at least 30 days, if the seller is not an authorized scrap seller. The legislation added manhole covers, bronze or copper cemetery plaques and markers, aluminum bleacher seats or guardrails, and certain mining cables to an existing list of “proprietary articles.”

Proof of Ownership

A number of states have enacted legislation to prove a seller has legal right to sell scrap metal property by requiring waivers or documentation. For instance, Delaware S.B. 63 added a proof of ownership requirement for catalytic converters and "restricted items" while Indiana H.B. 1441 added a restriction to the existing law that scrap metal dealers may only purchase air conditioner coils or condensers from sellers who provide a bill of sale or other written documentation that shows the item lawfully came into the seller's possession, or provide documentation that they are an authorized HVAC contractor or engaged in HVAC repair.

Minnesota’s H.B. 1214 made additional changes to the state’s law requiring all scrap metal dealers to include a statement in their records signed by the seller attesting that the scrap metal is not stolen and the seller has the right to sell the metal property.

Rhode Island S.B. 79 required the seller's signed statement of ownership or authorization to sell for every regulated metals transaction. "Public property" can only be accepted if the seller provides evidence of a valid contract with a governmental entity.

Payment Methods

Permitted methods of payment are restricted in 19 states; in the 2013 legislative session several states either established or further restricted the use of cash for scrap metal transactions not involving commercial accounts. For instance, Louisiana S.B. 131 added the option for payment by loadable payment card and options to tender payment in person or by electronic transfer to existing payment restrictions for copper.

Maine H.P. 559 amended existing law by adding the options of payment by credit card or debit card along with payment by check for non-exempt transactions.

North Carolina S.B. 583 changed the definition of "cash card system" to require a photograph of the seller at the time of payment when providing payment in cash and to require an automated cash dispenser such as an ATM.

North Dakota S.B. 2151 prohibited scrap metal dealers from entering into cash transactions in excess of $1,000, unless with an exempted seller.

Oklahoma H.B. 1740 now prohibits scrap metal dealers from entering into cash transactions in excess of $1,000, unless with an exempted seller.

Statewide Database

A number of states are implementing or utilizing statewide databases to record the sales of scrap metal. For example, Arizona’s H.B. 2262 required all law enforcement in the state to register on a metal theft notification website which allows law enforcement to send theft alerts to scrap metal facilities and other law enforcement within a 100-mile radius of a theft. This active alert system will also allow scrap metal dealers to alert law enforcement when dealers are offered suspicious materials.

A Nevada bill, S.B. 235, called for a regulatory review and process that would allow scrap metal dealers and local law enforcement to use an electronic reporting system where scrap metal processors must submit records daily detailing each transaction; forthcoming regulations must address privacy and legal concerns. The bill required scrap metal processors to prominently display a written notice of the information they must submit to local law enforcement.

New Hampshire S.B. 104 creates a commission to study the current system of reporting by scrap metal dealers to evaluate the need a statewide database. The commission will examine the current system, the frequency of metal theft and arrests in the state, existing tools for deterring theft and models in other states to provide recommendations to the legislature on the necessity of creating a statewide database.

Washington’s H.B. 1552 establishes a statewide “no-buy” database where scrap metal businesses must enter a prospective seller’s information to determine if they have been convicted of a crime involving stolen property in the state within the past four years.

Licensing

There is an increasing movement in the states to address metals theft by requiring scrap metal dealers or processors to possess a license or register with the state governing agency. There are now 28 states that include some form of licensing, registration or permitting requirement. In the 2013 legislative session, both Arkansas and Washington developed licensing requirements for scrap metal dealers with Arkansas’ H.B. 1975 and Washington’s H.B. 1552. The Arkansas bill allows county sheriffs to distribute scrap metal dealer licenses and establishes fees, while the Washington bill specifies the required documentation for scrap metal businesses and allows to Department of Licensing to require additional information from applicants.

An additional state, Maine, enacted H.P. 560 this year to study the need for a state licensing process and other scrap metal regulatory components.

Tennessee S.B. 733 delays the expiration of a scrap metal licenses by 60 days, as opposed to immediately, upon the death of the registrant. The bill additionally states that a registration will expire upon notification to the Department of Commerce and Insurance by a registered scrap metal facility that the registrant is no longer an employee or agent of the location.

Enforcement and Penalties

Numerous states are either increasing enforcement of existing laws or increasing the severity of penalties related to metal theft. For example, an Arizona bill, S.B. 1107, seeks to make it easier to reduce illegal scrap metal transactions, by including those who knowingly purchase or control stolen scrap metal into to the state’s definition of theft.

Arkansas’ H.B. 1975 establishes that a person convicted of scrap metal theft is forever prohibited from selling scrap metal; and a recycler who fails to comply with the licensing provisions may have its license suspended or revoked.

California S.B. 485 now requires applicants to provide additional documentation when applying for or renewing a weighmaster’s license, including a current business license and proof of both photographic and thumb printing equipment. The bill also altered yearly licensing fees. California currently does not have a state license for scrap metal dealers.

Missouri S.B. 157 addresses both liability and repeat offenses: sellers of stolen scrap metal are liable for damages related to obtaining the stolen metal. A first violation of scrap metal law is a Class B misdemeanor with a fine of up to $500, a second offense is a Class A misdemeanor with a fine of up to $1,000 and a third offense will result in a loss of any business licenses.

Nevada’s S.B. 37 requires a person found guilty of metal theft to complete a specified amount of community service based on their offense, in addition to paying restitution and receiving criminal charges.

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