Senate Study Bill 3088 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON SCHULTZ) A BILL FOR An Act relating to scrap metal transactions, including by 1 regulating the sale of catalytic converters to scrap metal 2 dealers and providing for recordkeeping requirements, 3 providing penalties, and making penalties applicable. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5065XC (4) 89 th/ns

S.F. _____ Section 1. Section 714.1, subsection 4, Code 2022, is 1 amended to read as follows: 2 4. Exercises control over stolen property, knowing such 3 property to have been stolen, or having reasonable cause to 4 believe that such property has been stolen, unless the person’s 5 purpose is to promptly restore it to the owner or to deliver it 6 to an appropriate public officer. The fact that the person is 7 found in possession of property which has been stolen from two 8 or more persons on separate occasions, or that the person is a 9 dealer or other person familiar with the value of such property 10 and has acquired it for a consideration which is far below its 11 reasonable value, or that the person is a scrap metal dealer 12 and has violated section 714.27, subsection 2, paragraph “b” , 13 in a transaction involving the property, shall be evidence 14 from which the court or jury may infer that the person knew or 15 believed that the property had been stolen. 16 Sec. 2. Section 714.27, subsections 2, 4, 5, 6, and 7, Code 17 2022, are amended to read as follows: 18 2. a. A person shall not sell scrap metal to a scrap metal 19 dealer in this state unless the person provides to the scrap 20 metal dealer, at or before the time of sale, the person’s name, 21 address, and place of business, if any, and presents to the 22 scrap metal dealer a all of the following: 23 (1) The person’s valid driver’s license or nonoperator’s 24 identification card, military identification card, passport, or 25 other government-issued photo identification. 26 (2) For transactions involving the sale of a catalytic 27 converter, an original receipt or invoice for a replacement 28 catalytic converter purchased fewer than thirty days before 29 the person sells the replaced catalytic converter to the scrap 30 metal dealer, or a junking certificate for a vehicle that was 31 issued fewer than thirty days before the person sells the 32 catalytic converter to the scrap metal dealer. The receipt, 33 invoice, or junking certificate presented by the person to the 34 scrap metal dealer must be unmarked by a scrap metal dealer 35 -1- LSB 5065XC (4) 89 th/ns 1/ 6

S.F. _____ pursuant to paragraph “b” . This subparagraph does not apply to 1 a transaction if the person presents proof to the scrap metal 2 dealer that the sale is approved by the sheriff of the county 3 in which the vehicle from which the catalytic converter was 4 removed is registered. 5 b. (1) A scrap metal dealer shall not make an initial 6 purchase of scrap metal from a person without demanding 7 and receiving the information required by this subsection . 8 However, after an initial transaction, a scrap metal dealer 9 may only require the person’s name and place of business waive 10 the requirement that the person present an address and photo 11 identification for subsequent purchases, provided the scrap 12 metal dealer retains all information received during the 13 initial transaction. 14 (2) On the purchase of a catalytic converter, a scrap metal 15 dealer shall mark the receipt, invoice, or junking certificate 16 presented under paragraph “a” to indicate the catalytic 17 converter has been sold. 18 (3) A scrap metal dealer shall reasonably verify that a 19 catalytic converter being offered for sale is appropriate 20 for the type of vehicle for which the replacement catalytic 21 converter was purchased as shown on the receipt or invoice, or 22 is appropriate for the type of vehicle for which the junking 23 certificate was issued, as applicable. 24 4. All scrap metal transactions, other than those 25 transactions exempt pursuant to subsection 5 , in which the 26 total sale price exceeds fifty dollars shall require payment by 27 check or electronic funds transfer. 28 5. The following scrap metal transactions Transactions in 29 which the total sale price is fifty dollars or less, except 30 transactions for the sale of a catalytic converter, are exempt 31 from the requirements of this section : . 32 a. Transactions in which the total sale price is fifty 33 dollars or less, except transactions for the sale of catalytic 34 converters. 35 -2- LSB 5065XC (4) 89 th/ns 2/ 6

S.F. _____ b. Transactions for the sale of catalytic converters in 1 which the total sale price is seventy-five dollars or less. 2 c. Transactions in which a scrap metal dealer is selling 3 scrap metal. 4 d. Transactions in which the person selling the scrap 5 metal is known to the scrap metal dealer purchasing the scrap 6 metal to be the officer, employee, or agent of an established 7 commercial or industrial business, operating from a fixed 8 location, that may reasonably be expected to produce scrap 9 metal during the operation of the business. 10 6. a. The provisions of this section shall take precedence 11 over and supersede any local ordinance adopted by a political 12 subdivision that regulates scrap metal transactions , except 13 for local ordinances that provide additional or more stringent 14 requirements for transactions involving scrap metal . 15 b. Notwithstanding paragraph “a” of this subsection , a city 16 ordinance regarding scrap metal or other scrap material in 17 effect prior to January 1, 2012, in a city with a population 18 exceeding one hundred fifty thousand as shown by the 2010 19 federal decennial census may continue to be enforced by the 20 city which adopted it. 21 7. A person who violates subsection 2 , paragraph “a” , or a 22 person who conducts a scrap metal transaction by or on behalf 23 of a scrap metal dealer who violates this section shall be 24 subject to a civil penalty as follows: 25 a. An initial violation shall subject the person to a civil 26 penalty in the amount of one hundred thousand dollars. 27 b. A second violation within two years shall subject 28 the person to a civil penalty in the amount of five hundred 29 thousand dollars. 30 c. A third or subsequent violation within two years shall 31 subject the person to a civil penalty in the amount of one ten 32 thousand dollars. 33 Sec. 3. Section 714.27, Code 2022, is amended by adding the 34 following new subsection: 35 -3- LSB 5065XC (4) 89 th/ns 3/ 6

S.F. _____ NEW SUBSECTION . 8. Proof that a scrap metal dealer, or a 1 person acting on behalf of a scrap metal dealer, conducted a 2 scrap metal transaction in violation of subsection 2, paragraph 3 “b” , shall be evidence from which the court or jury may infer 4 any of the following: 5 a. The person aided and abetted the underlying theft of the 6 catalytic converter involved in the transaction from a vehicle, 7 under section 703.1. 8 b. The person had knowledge that a public offense has been 9 committed and that a certain person committed it, for purposes 10 of proving the scrap metal dealer or person acting on behalf of 11 a scrap metal dealer acted as an accessory after the fact under 12 section 703.3. 13 Sec. 4. Section 805.8C, subsection 10, Code 2022, is amended 14 to read as follows: 15 10. Scrap metal transaction violations. For violations of 16 section 714.27 , the scheduled fine is one hundred thousand 17 dollars for a first violation, five hundred thousand dollars 18 for a second violation within two years, and one ten thousand 19 dollars for a third or subsequent violation within two years. 20 The scheduled fine under this subsection is a civil penalty 21 which shall be deposited into the general fund of the county 22 or city if imposed by a designated officer or employee of a 23 county or city, or deposited in the general fund of the state 24 if imposed by a state agency, and the crime services surcharge 25 under section 911.1 shall not be added to the penalty. 26 EXPLANATION 27 The inclusion of this explanation does not constitute agreement with 28 the explanation’s substance by the members of the general assembly. 29 Current law requires all scrap metal transactions for the 30 sale of catalytic converters totaling more than $75 to meet 31 certain requirements. A person who sells the parts must 32 provide identifying information to the scrap metal dealer and 33 the dealer must keep a confidential record of each transaction. 34 In addition, payments for the parts must be made by check 35 -4- LSB 5065XC (4) 89 th/ns 4/ 6

S.F. _____ or electronic funds transfer. A person who violates these 1 provisions is subject to a civil penalty of between $100 and 2 $1,000. 3 This bill requires a person who sells a catalytic converter 4 to a scrap metal dealer to provide to the dealer an original 5 receipt or invoice for a replacement catalytic converter 6 purchased fewer than 30 days before the person sells the 7 replaced catalytic converter, or a junking certificate for 8 a vehicle issued fewer than 30 days before the person sells 9 the catalytic converter. The receipt, invoice, or junking 10 certificate must be unmarked by a scrap metal dealer. The 11 requirement does not apply if the person presents proof to the 12 dealer that the sale is approved by the sheriff of the county 13 in which the vehicle from which the catalytic converter was 14 removed is registered. 15 A scrap metal dealer is required to keep a confidential 16 register or log of each transaction, including a record of the 17 information required by the bill. Under the bill, a scrap 18 metal dealer must mark the original receipt, invoice, or 19 junking certificate, as applicable, to indicate the catalytic 20 converter has been sold. A scrap metal dealer must also 21 reasonably verify that a catalytic converter being offered 22 for sale is appropriate for the type of vehicle for which the 23 replacement converter was purchased as shown on the receipt or 24 invoice, or is appropriate for the type of vehicle for which 25 the junking certificate was issued, as applicable. 26 The bill strikes all exemptions for the recordkeeping 27 requirements except for sales of $50 or less that do not 28 involve a catalytic converter. 29 Any local ordinance adopted by a political subdivision that 30 regulates scrap metal transactions is superseded by the bill, 31 except for local ordinances that provide additional or more 32 stringent recordkeeping requirements for transactions involving 33 scrap metal. 34 The bill increases the civil penalty for persons who violate 35 -5- LSB 5065XC (4) 89 th/ns 5/ 6

S.F. _____ Code section 714.27 for an initial violation from $100 to 1 $1,000, for a second violation within two years from $500 to 2 $5,000, and for a third or subsequent violation within two 3 years from $1,000 to $10,000. 4 For purposes of theft as defined in Code section 714.1(4), 5 the bill adds that a scrap metal dealer’s violation of 6 recordkeeping requirements shall be evidence from which the 7 court or jury may infer that the person knew or believed that 8 the property had been stolen. The penalty for theft ranges 9 from a simple misdemeanor to a class “C” felony depending on 10 the value of the property. A simple misdemeanor is punishable 11 by confinement for no more than 30 days and a fine of at 12 least $105 but not more than $855, and a class “C” felony is 13 punishable by confinement for no more than 10 years and a fine 14 of at least $1,370 but not more than $13,660. 15 Under the bill, proof that a scrap metal dealer, or a 16 person acting on behalf of a scrap metal dealer, conducted 17 a scrap metal transaction in violation of the recordkeeping 18 requirements shall be evidence from which the court or jury may 19 infer that the person aided and abetted the underlying theft 20 of the catalytic converter involved in the transaction from 21 a vehicle, under Code section 703.1, or that the person had 22 knowledge that a public offense has been committed and that a 23 certain person committed it, for purposes of proving the scrap 24 metal dealer or person acting on behalf of a scrap metal dealer 25 acted as an accessory after the fact under Code section 703.3. 26 -6- LSB 5065XC (4) 89 th/ns 6/ 6