Scrap Metal Sales Regulations

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					                 Legislative Briefs
                       from the Legislative Reference Bureau
Legislative Brief 08−4	                                                                    April 2008

      2007 Wisconsin Act 64, passed by the legis-    ing scrap metal consisting primarily of iron or

lature and signed by Governor Jim Doyle on           steel. The sole requirement for ferrous scrap is

March 11, 2008, requires scrap metal dealers to      that a dealer may only buy material from a per-

ask for identification and proof of ownership        son who is at least age 18.

before purchasing scrap and certain other                 The law’s provisions (Sections 134.405 and

metal items. The law does not apply to sales of      895.09, Wisconsin Statutes) apply to three

items such as gold or silver coins or jewelry.       defined classes of metal materials or items:

Dealers must maintain sales records and make
        � “Metal article” means a manufactured item

the records available to law enforcement offi-         that consists of metal (which may be iron or

cers investigating thefts of stolen property. It       steel), is usable for its original intended pur-

also allows the owners of certain metal items to	      pose without additional processing, repair,

file civil suits to recover theft-related costs.       or alteration; and is offered for sale for the

                                                       value of metal it contains. Not included are
      Act 64 was introduced as 2007 Senate Bill        antique or collectible articles, including jew-
473 on February 12, 2008, by Senators Plale,           elry, coins, silverware, and watches.
Hansen, Harsdorf, and eight others. It was           � “Nonferrous scrap” means scrap metal con-
cosponsored by Representatives Montgomery,             sisting primarily of metal other than iron or
Honadel, Zepnick, and 26 others. SB-473	               steel, but does not include aluminum bever-
passed the Senate unanimously and the	                 age cans, used household items, items
Assembly on a voice vote on February 28, 2008.	        removed from a structure during renovation
It took effect on March 26, 2008.	                     or demolition, or small quantities of nonfer-
      High metal prices spur thefts. Record and        rous metals contained in large manufactured
near-record prices for metal in recent years,
fueled in part by demand in developing econo-        � “Proprietary article” means a metal article
                                                       stamped, engraved, stenciled, or marked to
mies such as China, have led to a surge in the
                                                       identify it as the property of a governmental
theft of commodities such as copper, alumi-            entity; telecommunications provider, public
num, iron, and steel. Thieves have raided              utility or electrical producer or transmitter;
construction sites, homes, and businesses in	          cable operator; or a transportation, ship-
search of electrical cable and plumbing fix-	          building, ship repair, mining, or manufactur-
tures, siding, beer kegs, and other items. Public	     ing company. Articles include copper or alu-
safety has been compromised by scavengers              minum cables or wires, metal beer kegs,
stealing manhole covers and sewer grates,              manhole covers, grave markers or other cem-
                                                       etery items, and railroad rails or spikes.
street lamps, and roadside guardrails and has
resulted in electric utility and cable TV outages.   IDENTIFICATION; RECORD-KEEPING
      New Mexico and Washington have                      At the time of the sale, a seller or deliverer
enacted laws regulating scrap metal dealers,         of nonferrous scrap, metal articles, or propri-
and legislation has recently been considered in      etary articles must provide to the scrap metal
about a dozen other states.	                         dealer the motor vehicle operator license or
                                                     other government-issued, current photo-
CATEGORIES OF SCRAP METAL                            graphic identification which includes the per-
     The identification and record-keeping           son’s full name, current address, date of birth,
requirements      of   Act     64     (www.le-       and ID number. Sellers must be over age 18.               The scrap metal dealer must record the
generally do not apply to ferrous scrap, mean-       seller’s or deliverer’s identification, the time
Prepared by Dan Ritsche, Senior Legislative Analyst            Reference Desk: (608) 266-0341
                                                               Web Site:
−2 −                                                                                         LB−08−4

and date of the purchase, the number and state        must be maintained for not less than two years
of issuance of the license plate on the seller’s or   after the most recent transaction.
deliverer’s vehicle, the weight of the scrap or            Police access. A dealer’s records may be
articles, and a description of the items received     examined by a law enforcement officer who
that is consistent with recognized national           presents proper credentials at the dealer’s
recycling industry guidelines.                        place of business during business hours. Also,
     Proof of ownership. If the purchase              a law enforcement officer of the city, village,
involves nonferrous scrap or a metal article, the     town, or county in which a dealer conducts
scrap metal dealer must obtain the seller’s           business may request that all scrap metal deal-
signed declaration that the seller is the owner of    ers in the jurisdiction provide reports of all
the items being sold.                                 applicable purchases. Dealers must comply no
                                                      later than the next business day. Municipalities
     For a proprietary article, the dealer must
                                                      may specify that reports to police be in an elec-
ask for documentation establishing lawful pos-
                                                      tronic format.
session, such a bill of sale, receipt, or letter of
authorization. If the seller fails to provide own-    PENALTIES
ership evidence, the dealer must document                  A dealer who knowingly violates the law
that he or she has made a diligent inquiry into       and has not knowingly committed a previous
whether the seller has a legal right to sell. Not     offense may be subject to a fine not to exceed
later than one business day after the purchase,       $1,000 or imprisonment not to exceed 90 days,
the dealer must submit to a local law enforce-        or both. A second violation carries the same 90
ment department a report describing the pro-          day sentence, with a fine of up to $10,000. Third
prietary article and the seller’s ID information.     and subsequent violations are a Class I felony,
     Retain records for two years. Records            with a fine of not to exceed $10,000 or imprison-
must be maintained at the dealer’s place of           ment not to exceed 3 years and 6 months, or
business regarding the seller’s or deliverer’s        both. Each day constitutes a separate violation.
identification and the description of the scrap       Municipalities may enact local ordinances not
or articles sold for not less than two years.         more stringent than state law, except that a 1st
Other than to law enforcement personnel, a            class city (Milwaukee) may enact one more
dealer may disclose personally identifiable           stringent.
information relating to scrap sales only to a suc-    CIVIL SUITS FOR THEFT COSTS
cessor in interest in the operation, resulting             An owner of stolen items sold in violation
from the sale, merger, assignment, restructur-        of the law may bring a civil action against a
ing, or change of control of the business. A law      dealer seeking actual damages; lost profits;
enforcement officer or agency that receives a         costs, disbursements, and reasonable attorney
report may disclose the information only to           fees; and punitive damages if the court deter-
another law enforcement officer or agency.            mines the violation was committed for the pur-
     Commercial accounts. If purchases are            pose of commercial advantage. The burden of
made from a commercial enterprise with                proof in such suits is “by the preponderance of
whom the scrap dealer maintains an ongoing            the evidence.” Awards will be reduced by any
business relationship, the dealer must create a       restitution collected in a criminal theft prosecu-
record that includes the full name of the com-        tion. “Value” of the items means the market
mercial account; its business address and tele-       value at the time of the theft or the cost to the
phone number; the name of the responsible             victim of replacing the property within a rea-
contact person; the time, date, and value of          sonable time after the theft, whichever is less,
each purchase; and a description of the pre-          including any costs that would be incurred in
dominant types of scrap the dealer has pur-           repairing or replacing any property damaged
chased from that account. The ID information          in the theft or removal of the scrap metal.