SSB 3088 (LSB 5065XC (4) 89)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON SCHULTZ)

A BILL FOR

An Act relating to scrap metal transactions, including by regulating the sale of catalytic converters to scrap metal dealers and providing for recordkeeping requirements, providing penalties, and making penalties applicable.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 714.1, subsection 4, Code 2022, is amended to read as follows:
   4.  Exercises control over stolen property, knowing such property to have been stolen, or having reasonable cause to believe that such property has been stolen, unless the person’s purpose is to promptly restore it to the owner or to deliver it to an appropriate public officer. The fact that the person is found in possession of property which has been stolen from two or more persons on separate occasions, or that the person is a dealer or other person familiar with the value of such property and has acquired it for a consideration which is far below its reasonable value, or that the person is a scrap metal dealer and has violated section 714.27, subsection 2, paragraph “b”, in a transaction involving the property, shall be evidence from which the court or jury may infer that the person knew or believed that the property had been stolen.
    Sec. 2.  Section 714.27, subsections 2, 4, 5, 6, and 7, Code 2022, are amended to read as follows:
   2.  a.  A person shall not sell scrap metal to a scrap metal dealer in this state unless the person provides to the scrap metal dealer, at or before the time of sale, the person’s name, address, and place of business, if any, and presents to the scrap metal dealer a all of the following:
   (1)  The person’s valid driver’s license or nonoperator’s identification card, military identification card, passport, or other government-issued photo identification.
   (2)  For transactions involving the sale of a catalytic converter, an original receipt or invoice for a replacement catalytic converter purchased fewer than thirty days before the person sells the replaced catalytic converter to the scrap metal dealer, or a junking certificate for a vehicle that was issued fewer than thirty days before the person sells the catalytic converter to the scrap metal dealer. The receipt, invoice, or junking certificate presented by the person to the scrap metal dealer must be unmarked by a scrap metal dealer pursuant to paragraph “b”. This subparagraph does not apply to a transaction if the person presents proof to the scrap metal dealer that the sale is approved by the sheriff of the county in which the vehicle from which the catalytic converter was removed is registered.
   b.  (1)  A scrap metal dealer shall not make an initial purchase of scrap metal from a person without demanding and receiving the information required by this subsection. However, after an initial transaction, a scrap metal dealer may only require the person’s name and place of business waive the requirement that the person present an address and photo identification for subsequent purchases, provided the scrap metal dealer retains all information received during the initial transaction.
   (2)  On the purchase of a catalytic converter, a scrap metal dealer shall mark the receipt, invoice, or junking certificate presented under paragraph “a” to indicate the catalytic converter has been sold.
   (3)  A scrap metal dealer shall reasonably verify that a catalytic converter being offered for sale is appropriate for the type of vehicle for which the replacement catalytic converter was purchased as shown on the receipt or invoice, or is appropriate for the type of vehicle for which the junking certificate was issued, as applicable.
   4.  All scrap metal transactions, other than those transactions exempt pursuant to subsection 5, in which the total sale price exceeds fifty dollars shall require payment by check or electronic funds transfer.
   5.  The following scrap metal transactions Transactions in which the total sale price is fifty dollars or less, except transactions for the sale of a catalytic converter, are exempt from the requirements of this section:.
   a.  Transactions in which the total sale price is fifty dollars or less, except transactions for the sale of catalytic converters.
   b.  Transactions for the sale of catalytic converters in which the total sale price is seventy-five dollars or less.
   c.  Transactions in which a scrap metal dealer is selling scrap metal.
   d.  Transactions in which the person selling the scrap metal is known to the scrap metal dealer purchasing the scrap metal to be the officer, employee, or agent of an established commercial or industrial business, operating from a fixed location, that may reasonably be expected to produce scrap metal during the operation of the business.
   6.  a.  The provisions of this section shall take precedence over and supersede any local ordinance adopted by a political subdivision that regulates scrap metal transactions, except for local ordinances that provide additional or more stringent requirements for transactions involving scrap metal.
   b.  Notwithstanding paragraph “a” of this subsection, a city ordinance regarding scrap metal or other scrap material in effect prior to January 1, 2012, in a city with a population exceeding one hundred fifty thousand as shown by the 2010 federal decennial census may continue to be enforced by the city which adopted it.
   7.  A person who violates subsection 2, paragraph “a”, or a person who conducts a scrap metal transaction by or on behalf of a scrap metal dealer who violates this section shall be subject to a civil penalty as follows:
   a.  An initial violation shall subject the person to a civil penalty in the amount of one hundred thousand dollars.
   b.  A second violation within two years shall subject the person to a civil penalty in the amount of five hundred thousand dollars.
   c.  A third or subsequent violation within two years shall subject the person to a civil penalty in the amount of one ten thousand dollars.
    Sec. 3.  Section 714.27, Code 2022, is amended by adding the following new subsection:
   NEW SUBSECTION.  8.  Proof that a scrap metal dealer, or a person acting on behalf of a scrap metal dealer, conducted a scrap metal transaction in violation of subsection 2, paragraph “b”, shall be evidence from which the court or jury may infer any of the following:
   a.  The person aided and abetted the underlying theft of the catalytic converter involved in the transaction from a vehicle, under section 703.1.
   b.  The person had knowledge that a public offense has been committed and that a certain person committed it, for purposes of proving the scrap metal dealer or person acting on behalf of a scrap metal dealer acted as an accessory after the fact under section 703.3.
    Sec. 4.  Section 805.8C, subsection 10, Code 2022, is amended to read as follows:
   10.  Scrap metal transaction violations.  For violations of section 714.27, the scheduled fine is one hundred thousand dollars for a first violation, five hundred thousand dollars for a second violation within two years, and one ten thousand dollars for a third or subsequent violation within two years. The scheduled fine under this subsection is a civil penalty which shall be deposited into the general fund of the county or city if imposed by a designated officer or employee of a county or city, or deposited in the general fund of the state if imposed by a state agency, and the crime services surcharge under section 911.1 shall not be added to the penalty.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Current law requires all scrap metal transactions for the sale of catalytic converters totaling more than $75 to meet certain requirements. A person who sells the parts must provide identifying information to the scrap metal dealer and the dealer must keep a confidential record of each transaction. In addition, payments for the parts must be made by check or electronic funds transfer. A person who violates these provisions is subject to a civil penalty of between $100 and $1,000.
   This bill requires a person who sells a catalytic converter to a scrap metal dealer to provide to the dealer an original receipt or invoice for a replacement catalytic converter purchased fewer than 30 days before the person sells the replaced catalytic converter, or a junking certificate for a vehicle issued fewer than 30 days before the person sells the catalytic converter. The receipt, invoice, or junking certificate must be unmarked by a scrap metal dealer. The requirement does not apply if the person presents proof to the dealer that the sale is approved by the sheriff of the county in which the vehicle from which the catalytic converter was removed is registered.
   A scrap metal dealer is required to keep a confidential register or log of each transaction, including a record of the information required by the bill. Under the bill, a scrap metal dealer must mark the original receipt, invoice, or junking certificate, as applicable, to indicate the catalytic converter has been sold. A scrap metal dealer must also reasonably verify that a catalytic converter being offered for sale is appropriate for the type of vehicle for which the replacement converter was purchased as shown on the receipt or invoice, or is appropriate for the type of vehicle for which the junking certificate was issued, as applicable.
   The bill strikes all exemptions for the recordkeeping requirements except for sales of $50 or less that do not involve a catalytic converter.
   Any local ordinance adopted by a political subdivision that regulates scrap metal transactions is superseded by the bill, except for local ordinances that provide additional or more stringent recordkeeping requirements for transactions involving scrap metal.
   The bill increases the civil penalty for persons who violate Code section 714.27 for an initial violation from $100 to $1,000, for a second violation within two years from $500 to $5,000, and for a third or subsequent violation within two years from $1,000 to $10,000.
   For purposes of theft as defined in Code section 714.1(4), the bill adds that a scrap metal dealer’s violation of recordkeeping requirements shall be evidence from which the court or jury may infer that the person knew or believed that the property had been stolen. The penalty for theft ranges from a simple misdemeanor to a class “C” felony depending on the value of the property. A simple misdemeanor is punishable by confinement for no more than 30 days and a fine of at least $105 but not more than $855, and a class “C” felony is punishable by confinement for no more than 10 years and a fine of at least $1,370 but not more than $13,660.
   Under the bill, proof that a scrap metal dealer, or a person acting on behalf of a scrap metal dealer, conducted a scrap metal transaction in violation of the recordkeeping requirements shall be evidence from which the court or jury may infer that the person aided and abetted the underlying theft of the catalytic converter involved in the transaction from a vehicle, under Code section 703.1, or that the person had knowledge that a public offense has been committed and that a certain person committed it, for purposes of proving the scrap metal dealer or person acting on behalf of a scrap metal dealer acted as an accessory after the fact under Code section 703.3.