HB2262 - 511R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 44-1641, Arizona Revised Statutes, is amended to read:

START_STATUTE44-1641. Definitions

In this article, unless the context otherwise requires:

1. "Business records" means records of any purchase, trade, barter or other transaction that involves the receipt of scrap metals and that is made in the ordinary course of business at or near the time of the purchase, trade, barter or transaction including receipts, books or similar records as prescribed by section 44-1642, but does not include correspondence, tax returns or financial statements.

2. "Department" means the department of public safety.

2. 3. "Ferrous metals" means those metals which that will attract a magnet.

3. 4. "Industrial account" means a person or business entity that files or is required to file monthly returns for that person's or entity's transaction privilege tax licenses or a governmental entity that sells scrap metal to a scrap metal dealer.

4. "Nonferrous metals" means those metals which will not normally attract a magnet including copper, brass and aluminum.

5. "Scrap metal dealers" means each person or business entity including all employees of the person or business entity, except automotive recyclers as defined and licensed pursuant to title 28, chapter 10, and whose primary business is the dismantling, selling or disposing of parts or accessories of motor vehicles engaged in the business of purchasing, trading, bartering or otherwise receiving secondhand or castoff material of any kind, except used beverage containers, which is commonly known as scrap metal.

6. "Scrap metals" includes insulated and uninsulated metallic cables.END_STATUTE

Sec. 2. Title 44, chapter 11, article 3.1, Arizona Revised Statutes, is amended by adding sections 44-1641.01, 44-1641.02, 44-1641.03, 44-1641.04 and 44-1641.05, to read:

START_STATUTE44-1641.01. Powers and duties of department

The department shall:

1. Adopt rules that are necessary for the administration of this article.

2. Administer and enforce this article and rules adopted pursuant to this article.

3. Submit a report annually to the president of the senate and the speaker of the house of representatives about scrap metal dealers. The report shall include:

(a) The number of scrap metal dealers registered in this state.

(b) The number of scrap metal dealers who are registered in this state and who are in violation of provisions of this article.

(c) The number of persons who are acting as scrap metal dealers without being registered in violation of this article.END_STATUTE

START_STATUTE44-1641.02. Law enforcement; theft notification website

All law enforcement in this state shall be registered on a free theft notification website that allows law enforcement to send detailed descriptions of stolen items to recycling operations and other law enforcement within at least a one hundred mile radius of a theft. The website must allow scrap metal dealers to alert law enforcement when the dealers are offered suspicious materials. END_STATUTE

START_STATUTE44-1641.03. Registration; application

A. A person must register pursuant to this article to conduct business as a scrap metal dealer in this state.

B. A person shall submit an application for registration to the department in a form prescribed by the department. The form shall include all of the following:

1. The name and address of the scrap metal dealer.

2. The name of each person who owns at least ten per cent of a scrap metal dealer business.

3. Full personal identification information on each owner of a scrap metal dealer business including a copy of each owner's driver license.

4. A statement indicating that the applicant has registered on a free theft notification website that allows law enforcement to send detailed descriptions of stolen items to recycling operations and other law enforcement within at least a one hundred mile radius of a theft. The website must allow scrap metal dealers to alert law enforcement when the dealers are offered suspicious materials.

5. An affidavit signed by the applicant that states that the person is in compliance with this article.

6. The location of each principal office and branch office at which the scrap metal dealer will conduct business in this state.

7. The name and address of any wholly‑owned subsidiary of the scrap metal dealer.

C. A registered scrap metal dealer does not need to separately register either of the following:

1. Any of its branch offices. The registrant shall make copies of the registration certificate available at each branch office location.

2. A wholly‑owned subsidiary of the registrant. END_STATUTE

START_STATUTE44-1641.04. Registration expiration and renewal; fees

A. A scrap metal dealer registration certificate expires every two years unless renewed.

B. The department shall charge and collect fees as determined by the director to cover the costs of registering the scrap metal dealers pursuant to section 44‑1641.03 and this section.

C. The director may renew a registration certificate granted under this article after receiving an application on such forms as the department prescribes and receipt of the fees prescribed pursuant to subsection B of this section.

D. The renewal form must include a questionnaire that the scrap metal dealer must prepare every two years to show compliance with this article. The scrap metal dealer must maintain and make available the questionnaire for inspection by the department.

E. The department shall renew a suspended registration certificate as provided in this article. Renewal of the registration does not entitle the registrant, while the registration remains suspended and until it is reinstated, to engage in any activity regulated by this article, or in any other activity or conduct in violation of the order or judgment by which the registration was suspended.

F. The director shall not reinstate a revoked registration. The director shall not accept an application for registration from a person whose registration has been revoked until at least one year after the date of revocation.END_STATUTE

START_STATUTE44-1641.05. Enforcement

A. The department may suspend, revoke or refuse to issue or renew a registration certificate if the applicant or registrant:

1. Commits a third or subsequent violation of this article or any rule adopted pursuant to this article within a thirty‑six month period.

2. Knowingly makes or causes to be made to the department any false representation of a material fact.

B. The denial of the issuance or renewal of a registration certificate under this article shall be in writing and shall describe the basis for the denial. A hearing to contest a denial shall be held in accordance with title 41, chapter 6, article 10.

C. Except as provided in section 41-1092.08, subsection H, final decisions of the director are subject to judicial review pursuant to title 12, chapter 7, article 6.END_STATUTE

Sec. 3. Section 44-1642, Arizona Revised Statutes, is amended to read:

START_STATUTE44-1642. Records of purchase; transaction limitations; age requirement for scrap metal seller; exception

A. Every scrap metal dealer shall keep on the business premises a book or other similar record legibly printed or written in ink, in the English language of each transaction exceeding twenty‑five dollars involving the receipt of scrap metal. The record of each receipt of scrap metal shall include the following information:

1. The date, time and place of the transaction.

2. A photograph and an identifying description and weight of the specific scrap metal received.

3. The dollar amount of the transaction.

4. Except as otherwise provided in this paragraph, the seller's name, physical description including gender, height, weight, race and eye and hair color, physical address, date of birth, and signature and a photocopy of a current driver license, nonoperating identification license issued pursuant to section 28‑3165 or photo identification card issued by a tribal government or the United States military. The scrap metal dealer must validate the recorded information by using the seller's current driver license, nonoperating identification license issued pursuant to section 28‑3165 or photo identification card issued by a tribal government or the United States military. This paragraph does not apply to a seller who is exclusively selling aluminum beverage containers.

5. The seller's transaction privilege tax number, if applicable.

6. The number and state of issuance of the license on the vehicle used to deliver the scrap metal.

7. A photograph, video record or digital record of the seller involved in the transaction.

8. A right index fingerprint of the seller.

B. The record and entries shall be retained in a book or similar record at the business premises for one year after making the final entry of any transaction and shall be retained either at the business premises or any other reasonably available location for an additional year. A scrap metal dealer shall not purchase materials for which a record is required to be kept by this section in a series of purchases under twenty-five dollars to avoid the requirements of this section. A scrap metal dealer's business premises, business records relating to scrap metal transactions, including a book or similar record prescribed by this section, and business inventory shall be open during regular business hours for reasonable inspection by a peace officer. Before an inspection shall take place a peace officer shall first identify himself and the purpose for the inspection to the scrap metal dealer, dealer's manager or other responsible person and comply with all reasonable and customary safety requirements of that scrap metal dealer for the business premises inspected. The scrap metal dealer may require the peace officer to sign an inspection log that includes the officer's name and serial or badge number and the time, the date and the purpose for the inspection.

C. A scrap metal dealer shall not provide payment for any scrap metal on site at the time of the scrap metal transaction. Payment shall be made by mailing a check or money order to a physical address provided by the seller through a current driver license or other identification prescribed in subsection A, paragraph 4 of this section. The check or money order shall be made payable to the business name for an industrial account. This subsection:

1. Except as provided in paragraphs 2, and 3 and 4 of this subsection, only applies to industrial accounts, copper and aluminum wire with a diameter of at least three-eighths of an inch.

2. Except as provided in paragraph 3 or 4 of this subsection, applies to all scrap metal transactions of three hundred dollars or more.

3. Does not apply to industrial accounts if the industrial accounts annually preregister employees who are authorized sellers on behalf of the industrial accounts.

4. Applies to all transactions involving air conditioner cooling coils.

D. A scrap metal dealer shall provide a receipt to the seller on site at the time of the scrap metal transaction, for every transaction, and shall include the following information:

1. The date, time and place of the transaction.

2. An identifying description and weight of the specific scrap metal received.

3. The dollar amount of the transaction.

E. A scrap metal seller may not conduct a series of transactions for one vehicle load of scrap metal to avoid the requirements of this section.

F. A scrap metal seller shall not participate in more than one cash transaction per day for scrap metal.

G. A scrap metal seller shall be at least sixteen years old of age.

H. This section does not apply to transactions involving used aluminum beverage containers or materials consisting of a metal product in its original manufactured form that is comprised of no more than twenty per cent by weight nonferrous metal. END_STATUTE

Sec. 4. Section 44-1644, Arizona Revised Statutes, is amended to read:

START_STATUTE44-1644. Report; exemption; violation; classification

A. Within twenty-four hours of receipt of scrap metals, except from an industrial account or a scrap metal dealer, for which a record is required to be kept by section 44‑1642, a scrap metal dealer shall electronically submit to the department of public safety a record of the receipt of the scrap metals. The record shall include the following information:

1. The date, time and place of the receipt of the scrap metal.

2. An identifying description of the specific scrap metal received including the weight and amount of the transaction or other consideration given.

3. A description of the person delivering the metal to the scrap metal dealer including the person's gender, height, weight, race and hair and eye color, address and date of birth and a photocopy of a current driver license, nonoperating identification license issued pursuant to section 28‑3165 or photo identification card issued by a tribal government or the United States military.

4. The number and state of issuance of the license on the vehicle used to deliver the scrap metal.

B. The department of public safety shall establish by rule electronic submission standards. The submission standards shall allow the submission of the information in an electronic format that is compatible with the output format of not less than four of the record keeping software programs currently in use in the scrap metal industry in this state in a manner that will allow the information to be electronically merged with the department of public safety's department's database. A scrap metal dealer that submits information to the department of public safety pursuant to this section shall not be required to submit the same information to a local law enforcement agency.

C. The department of public safety shall make the information submitted pursuant to this section available to local law enforcement agencies over the internet and shall provide for training and procedures to allow law enforcement personnel to access the information provided electronically for law enforcement purposes.

D. For copper, aluminum wire with a diameter of at least three‑eighths of an inch and transactions with a value over one hundred dollars, a scrap metal dealer shall hold in its custody in the same size, shape and condition in which the scrap metal was received on its business premises any scrap metal received in a reportable transaction for seven days after filing the report prescribed by subsection A of this section.

E. Subsection D of this section does not apply to transactions with industrial accounts, other scrap metal dealers or purchases by scrap metal dealers of used aluminum beverage containers or ferrous scrap metals and of scrap metal authorized for release by a peace officer of that jurisdiction.

F. A person who fails to file a report prescribed by this section is guilty of a class 1 misdemeanor.END_STATUTE

Sec. 5. Title 44, chapter 11, article 3.1, Arizona Revised Statutes, is amended by adding sections 44-1648 and 44‑1649, to read:

START_STATUTE44-1648. Preemption; power of local authorities

A. The state legislature determines that the registration of scrap metal dealers is a matter of statewide concern. The power to register scrap metal dealers is preempted by this state.

B. This article does not affect a city, town or county's power to enforce laws relating to business licensing. END_STATUTE

START_STATUTE44-1649. Joint legislative committee on metal theft

The president of the senate and the speaker of the house of representatives for the fifty‑sixth legislature, first regular session shall appoint a joint legislative committee on metal theft that is composed of legislators to review the effectiveness of sections 13‑1820 and 28‑3511 and this article in deterring crime and the costs of compliance to industries affected by this article. The committee shall report on its findings to the president of the senate and the speaker of the house of representatives by December 1, 2023.END_STATUTE

Sec. 6. Delayed repeal

Section 44‑1649, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2023.