Michigan Metal Scrap Statute

"Scrap Metal" means:

• Ferrous or Nonferrous Metal, or items that contain Ferrous or Nonferrous Metal, that are sold or offered for sale for the value of the Ferrous or Nonferrous Metal they contain rather than their original intended use;
• Ferrous or Nonferrous Metal removed from or obtained by cutting, demolishing, or disassembling a building, structure, or manufactured item; or
• Other metal that cannot be used for its original intended purpose but can be processed for reuse in a mill, foundry, die caster, or other manufacturing facility.

"Ferrous Metal" means a metal that contains significant quantities of iron or steel.

"Nonferrous Metal" means a metal that does not contain significant quantities of Ferrous Metal but contains copper, brass, platinum group-based metals, aluminum, bronze, lead, zinc, nickel, or alloys of those metals.

"Public Fixture" means an item that contains ferrous or nonferrous metal and is owned or under the exclusive control of a governmental unit. The term includes, but is not limited to, a street light pole or fixture, road or bridge guardrail, traffic sign, traffic light signal, or historical marker.

Restricted Property, as used in this summary, means the following items as listed in MCL 445.430:

• Public Fixtures;
• Metal articles or materials that are clearly marked as property belonging to a person other than the seller;
• A commemorative, decorative, or other cemetery-related or apparently ceremonial article;
• Metal articles or materials removed from property owned by a railroad company or from a railroad right-of-way; or
• A silver alloy telecommunication battery with a threaded insert terminal connection, not including a battery used in auto or mobile equipment.

Special Payment Items, as used in this summary, means the following items as listed in MCL 445.426. Section 6(1):

• Air conditioners, air conditioner evaporator coils or condensers, or parts of air conditioner evaporator coils and condensers; or
• Copper wire, including copper wire that is burned in whole or in part to remove the insulation, copper pipe, or copper fittings

Catalytic converters, unless the Seller is:

• An automotive recycler as defined in MCL 257.2a;
• A manufacturer or wholesaler of catalytic converters; or
• A muffler shop, tire store, or other retail business that sells converters separately or as part of an exhaust system;

The following items are covered by the Purchase Restrictions - Section 9 provision as listed in MCL 445.429, Section 9(4):

• Any article containing Nonferrous Metal that is marked with any form of the name, initials, markings, or logo of a Governmental Entity, utility, cemetery, or railroad;
• Any beer kegs;
• Any Public Fixtures.

"First Purchaser" means the first buyer of a manufactured item that contains ferrous or nonferrous metal in a retail or business-to-business transaction. A person that purchases Scrap Metal or Restricted Property in violation of this act, or an automotive recycler, pawnshop, Scrap Metal Recycler, or Scrap Processor is not considered a first purchaser.

"Seller" means a person that either regularly, sporadically, or on a 1-time basis receives consideration from any other person from the purchase by a scrap metal dealer of scrap metal offered by that seller.

"Industrial or Commercial Customer" means a person that operates from a fixed location and is a seller of scrap metal to a scrap metal dealer under a written agreement that provides for regular or periodic sale, delivery, purchase, or receiving of scrap metal.

"Governmental Unit" means a subdivision, agency, department, county, parish, municipality, or other unit of the government of the United States, this state, another state, or a foreign country.

"Scrap Metal Dealer" (referred to in this summary as Dealer) means a person or governmental unit that buys scrap metal and is not a first purchaser. The term includes, but is not limited to, a person, whether or not licensed under state law or local ordinance, that operates a business as a Scrap Metal Recycler, Scrap Processor, secondhand and junk dealer, or other person that purchases any amount of scrap metal on a regular, sporadic, or 1-time basis.

"Scrap Metal Recycler" means a person that purchases ferrous or nonferrous metal that is intended for recycling or reuse, whether regarded as a Scrap Processor, core buyer, or other similar business operation.

"Scrap Processor" is as defined in MCL 445.403, means a person, utilizing machinery and equipment and operating from a fixed location, whose principal business is the processing and manufacturing of iron, steel, nonferrous metals, paper, plastic, or glass, into prepared grades of products suitable for consumption by recycling mills, foundries, and other Scrap Processors.

"Scale Operator" means the employee of a Scrap Metal Dealer who operates or attends a scale that is used to weigh the scrap metal in a purchase transaction.

"Record" means a paper, electronic, or other generally accepted method of storing information in a retrievable form.

"Purchase Transaction" means a purchase of Scrap Metal, or the purchase of Restricted Property if the knowing purchase of or offer to purchase that Restricted Property is not prohibited, by a Scrap Metal Dealer. The term does not include any of the following:

• Scrap Metal by a manufacturing facility that purchases from an Industrial or Commercial Customer for its own use in the production of metal articles or materials and does not in the ordinary course of its business purchase Scrap Metal for resale.
• Scrap Metal from a Governmental Unit.

Used or secondhand, distressed, or salvage vehicle or vehicle parts by:

• A used or secondhand vehicle or vehicle parts dealer that is licensed as a dealer under MCL 257.248 and is acting within the scope of that dealer's license;
• A vehicle scrap metal processor, vehicle salvage pool operator, or foreign salvage vehicle dealer that is licensed as a dealer under MCL 257.248 and is acting within the scope of that dealer's license;
• An automotive recycler that is licensed under MCL 257.248 if the transaction is authorized under MCL 257.217c; MCL 257.1318; or MCL 257.1352.

In a Purchase Transaction, a Seller who is an individual or an individual acting as an agent or representative of a Seller must:

• Present their operator's or chauffeur's license, military ID card, Michigan ID card, passport, or other government-issued photo ID, and allow the Dealer to make a copy;
• Allow the Dealer to take their thumbprint, to be used only for identification purposes by the Dealer and investigation purposes by a law enforcement agency.
• Provide the Dealer with a signed statement that certifies they are the owner of, or otherwise authorized to sell, the Scrap Metal to the Dealer and are at least 16 years old.
• Certify that they have not been convicted of a crime involving the theft, conversion, or sale of Scrap Metal. An individual that has been convicted of a crime involving the theft, conversion, or sale of Scrap Metal may not enter into a Purchase Transaction.

A Dealer must prepare and maintain a separate, accurate, and legible record of each Purchase Transaction. A Dealer may use an electronic record-keeping system if it allows immediate access to each Seller's purchase transaction activities, documents, and images, including record information, images of the payment if required by the Payment Restriction provision, and payment information contained within an electronic payment card or encrypted receipt if such a method is used to pay the Seller

A Purchase Transaction record must contain the following information:

• If delivered by licensed vehicle, the vehicle's license plate number;
• The date and time of the Purchase Transaction;
• A description of the predominant types of Scrap Metal purchased, made in accordance with the custom of the trade;
• The weight, quantity, or volume of Scrap Metal purchased, described and calculated in accordance with the custom of the trade;
• The name of the Scale Operator who weighs and inspects the Scrap Metal;
• The name of the Dealer's employee who purchased or authorized the purchase of the Scrap Metal if the purchaser was not the Scale Operator;
• The consideration paid and method of payment;
• The Seller's signed statement that certifies they are the owner of, or otherwise authorized to sell, the Scrap Metal to the Dealer and are at least 16 years old;
• The Seller's legible thumbprint;
• A digital photograph of the Seller or deliverer that includes their face and is taken at the time the Scrap Metal is delivered to the Dealer.

The following information from the Seller, and the deliverer if the deliverer is not the Seller, which may be retained in a separate file and used for future transactions:

• The Seller's name and address.
• The deliverer's name and address if the deliverer is not the Seller.
• A legible copy of, or the name, address, and identifying number from, the Seller's or deliverer's operator's or chauffeur's license, military ID card, Michigan ID card, passport, or other government-issued photo ID.

A photograph or digital, electronic, or video image of the Scrap Metal purchased that meets one of the following, even if each item of Scrap Metal is not shown:

• If the metal and the delivery vehicle are weighed, an overhead photo or image of the vehicle and the Scrap Metal in the vehicle on the scale; or
• If only the metal is weighed, a photo or image of the Scrap Metal on the scale.

If required by the Payment Restrictions provision, the photo, or digital or electronic image, of the Seller receiving payment by one of the following methods:

• The delivery of the check or money order to the Seller; or
• The dispensing of the cash to the Seller by an ATM located on the Dealer's premises and operated by electronic payment card or encrypted receipt.

A Dealer is not required to prepare a record for a Purchase Transaction with an Industrial or Commercial Customer that meets all of the following:

• Payment is made directly to the Customer;
• The Customer's personal and business identifying information is on file and conforms to a written description of the type of Scrap Metal customarily purchased from them; and
• The information on file with the Dealer is periodically reviewed at least every 2 years and validated as current or updated by the Dealer.

Records must be retained for at least 1 year in a location readily accessible for inspection.

A Seller's thumbprint may be used only for identification purposes by the Dealer and investigation purposes by a law enforcement agency.

A local, state, or federal law enforcement agency, or railroad police in investigation of stolen railroad property, may inspect a Dealer's transaction records during normal business hours. The Dealer shall make the records, or copies of the records, available on request to any local, state, or federal law enforcement agency.

7 calendar day hold on any article containing Nonferrous Metal if the following apply:

• The article is subject to a notification or bulletin from any law enforcement agency received by the Dealer prior to the purchase.

The deliverer does not have a written receipt or Documentation and:

• The article has altered or obliterated serial numbers; or
• The nonferrous Dealer would reasonably have knowledge it is or was the property of a Governmental Entity or a business due to identification on it or its type; or
• The article is a commemorative, decorative, or other cemetery-related or apparently ceremonial article; or
• The article is copper wiring, whether burned or with sheathing;

Exempts articles that have been tagged and held by a Dealer or that were not initially subject to tag and hold if resold directly to another Dealer.

MCL 445.429 (Section 9) includes restrictions that are similar to the requirements of the Restricted Property provision, but are listed and penalized separately in the law.

Unless the Seller has specific written Documentation that the Seller is the owner, agent, or person with authority to possess and sell the following, a Seller shall not sell or offer for sale and a nonferrous Dealer shall not purchase any of the following:

• Any article containing Nonferrous Metal that is marked with any form of the name, initials, markings, or logo of a Governmental Entity, utility, cemetery, or railroad;
• Any beer kegs; or
• Any Public Fixtures.

A person shall not knowingly sell or attempt to sell to a Dealer, and a Dealer shall not knowingly purchase or offer to purchase the following:

• Public Fixtures, unless the Seller is a Governmental Unit or has written authorization from the Governmental Unit that owned the property to sell the property.
• Metal articles or materials that are clearly marked as property belonging to a person other than the Seller, unless the Seller has authorization from that person to sell the property.

A commemorative, decorative, or other cemetery-related or apparently ceremonial article, unless:

• The Seller is the owner of the article;
• The Seller is authorized by the owner to sell the article; or
• The Seller of a cemetery-related article is the cemetery in which it was located.

Metal articles or materials removed from property owned by a railroad company or from a railroad right-of-way, unless the Seller is:

• The owner;
• The manufacturer;
• A contractor engaged in the business of repairing railroad equipment; or
• A person that has written authorization from that owner, manufacturer, or contractor to sell those metal articles or materials.

A silver alloy telecommunication battery with a threaded insert terminal connection (not including a battery used in auto or mobile equipment), unless the Seller is:

• A provider of telecommunication service; or
• Has written authorization from the provider of telecommunication service that owned the property to sell the property

For Purchase Transactions with Industrial or Commercial Customers, a Dealer must use one of the following payment methods, as agreed to by the Dealer and Customer:

• By bank wire transfer or other electronic delivery to an account of the Customer; or
• By barter or a trade or exchange of Scrap Metal or other property as all or part of the consideration for the transaction.

By one of the following methods; if the payment is mailed, the Dealer may mail the payment to the street address or post office box as directed by the Customer:

• Check or money order;
• An electronic payment card or encrypted receipt that may only be converted to cash in an ATM that is:
• Located on the Dealer's premises;
• Is used for the sole purpose of dispensing cash in connection with Purchase Transactions; and
• Provides a digital or electronic image of the dispensing of the cash to the Seller or individual acting on behalf of the Seller that includes the person's face.

For Purchase Transactions with Sellers that are not Industrial or Commercial Customers and that do not involve Special Payment Items, a Dealer must pay by:

• A check or money order. The Dealer shall make and retain a photograph or digital or electronic image of the delivery of the check or money order to the Seller or individual acting on behalf of the Seller that includes the face.

An electronic payment card or encrypted receipt that may only be converted to cash in an ATM that is:

• Located on the Dealer's premises;
• Is used for the sole purpose of dispensing cash in connection with Purchase Transactions; and
• Provides a digital or electronic image of the dispensing of the cash to the Seller or individual acting on behalf of the Seller that includes the face.

For Purchase Transactions involving Special Payment Items, if the purchase price for the transaction is less than $25, or if the total purchase price for all of a Seller’s purchase transactions involving Special Payment Items in a business day is less than $25, a Dealer must pay by:

• A direct deposit or electronic transfer to the seller’s account at a financial institution;
• A check or money order, or an electronic payment card or encrypted receipt, as described for transactions that do not involve Special Payment Items.

If the purchase price for the transaction involving Special Payment Items is $25 or more, or if the total purchase price for all of a Seller’s purchase transactions for Special Payment Items in a business day is $25 or more, for those Special Payment Items only payment must be made by mailing one of the following to the Seller at the address shown on the ID card presented for the record (italicized text clarifying payment restriction added by SB 304):

• A check or money order, or an electronic payment card or encrypted receipt, as described for transactions that do not involve Special Payment Items;
• A nontransferable receipt that the Seller may redeem at the Dealer's premises for a check or money order, or an electronic payment card or encrypted receipt, as described for transactions that do not involve Special Payment Items.

Representatives of the scrap metal industry may, in consultation with the Dept. of State Police, develop or contract for the development of a web-based electronic database of Special Payment Item transactions. If selected by the State Police, the scrap metal representatives may implement, operate, and maintain the database. The database must:

• Be available to all Dealers in Michigan;
• Be web-based;
• Be capable of conducting statewide real-time searches by item description or Seller;
• Be accessible to law enforcement agencies through a password supported, internetbased platform;
• Allow a law enforcement agency to flag the name of any Seller that appears in the database and has been convicted of a crime involving the theft, conversion or sale of Scrap Metal. The database must notify the agency of subsequent Purchase Transactions by the Seller, with the notice providing all information about the Seller and their Purchase Transactions that Dealers have reported to the Database.

Allow a Dealer to report all of the following information concerning the purchase of 1 or more Special Payment Items by noon of the next business day:

• Name and address of the Dealer;
• Name and address of the Seller;
• Date and time of the Purchase Transaction;
• A description of the items purchased;
• The weight or volume of the items purchased;

If one or more databases are developed, the State Police shall notify each group of companies whether the features of their database meet the above requirements. The State Police shall select a single shared electronic database that meets the above requirements for implementation and operation. A person objecting to the selection may file a petition with the State Police that describes the basis of their objection; the State Police shall provide them with an administrative hearing, conducted as a contested case under the Administrative Procedures Act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

If the database is implemented, beginning no later than 30 days after the database is determined in operation by the State Police and after the State Police publishes notice that the database is implemented and operational, a Dealer shall:

• Register or subscribe to the database and pay a reasonable fee for such;
• By noon of the next business day, electronically report the information required above for the purchase of Special Payment Items to the database. A Dealer is not required to report the consideration paid or other pricing information.

A Dealer shall register with or subscribe to, maintain that registration or subscription, and use in the conduct of its business, an internet-based database available to Dealers, law enforcement agencies, and the general public that lists and tracks, at a minimum, thefts of Scrap Metal. The database may be reasonably limited in terms of time and geographical area. ISRI's ScrapTheftAlert.com is considered appropriate; a Dealer may register with or subscribe to any other database that provides substantially the same services.

A Dealer must make each theft alert or similar notice available to each employee engaged in purchasing or weighing Scrap Metal sold or offered for sale to the Dealer, and ensure those employees review on a daily basis any recent alerts or notices that they have not previously reviewed.

By July 1, 2016, the State Police shall provide a written report to the governor, the speaker of the house, and the senate majority leader on the effectiveness of the amendments made by 2013 Michigan HB 4593 in reducing Scrap Metal theft and assisting in the investigation and prosecution of Scrap Metal theft, as well as any recommendations for further legislative action.

An individual that has been convicted of a crime involving the theft, the conversion, or the sale of Scrap Metal may not enter into a Purchase Transaction.

A person who violates the Recordkeeping, Retention, Information Confidentiality, Inspection, Tag and Hold, or Purchase Restrictions - Section 9 provisions, and knows or should have known they have violated the provisions, is guilty of a misdemeanor punishable by a fine of up to $500 and/or imprisonment for up to 93 days. If a violation of the Recordkeeping provision is the result of a malfunction of an electronic recordkeeping system, it is an affirmative defense that the Dealer diligently pursued repair of the system after the malfunction occurred, and implemented and maintained a manual recordkeeping system for Purchase Transactions that occurred while the electronic system was malfunctioning.

A Dealer that purchases Scrap Metal or Restricted Items and knew or should have known that it was stolen, or a person who sells Scrap Metal or Restricted Items to a Dealer and knew or should have known that it was stolen, is guilty of a felony punishable by:

• 1st offense: up to 5 years imprisonment and/or up to a $5,000 fine;
• 2nd or subsequent: up to 5 years imprisonment and/or up to a $10,000 fine.

A person that violates this act knowing or having reason to know that the person is violating this act is responsible for a state civil infraction and may be ordered to pay a civil fine of not more than $5,000.

If a Special Payment Items Reporting Database is implemented, a Dealer that knowing fails to register with and report to the database is responsible for a state civil infraction and shall pay a civil fine of $500 for the first violation, $1,000 for a second violation, and $5,000 for a third or subsequent violation.

A person may bring a private cause of action against a Seller or a Dealer, in a court of competent jurisdiction, for monetary damages suffered from violation of this act. If the court finds the violation included the purchase or sale of stolen property and the Dealer in an action against the Dealer, or the Seller in an action against the Seller, knew or should have known the property was stolen, the court shall award treble damages for the value of the property stolen, meaning the greatest of the replacement cost of the stolen property, the cost of repairing damage caused by the larceny, or the total of the replacement and repairs costs. The court may also aware costs and reasonable attorney fees.

The remedies under this act are cumulative and do not affect the ability or right of any other person, local governmental unit, or state or federal governing unit to bring any action under this or any other civil, criminal, or regulatory act or ordinance that is otherwise not prohibited by law.

This act does not exempt or release any person from obtaining and maintaining a license under, or complying with any strictures contained in, any other act or ordinance.

Under MCL 750.356, for a person who commits larceny by stealing Scrap Metal, the value of the property stolen will be determined as the greatest of the replacement cost of the stolen property, the cost of repairing damage caused by the larceny, or the total of the replacement and repairs costs.