Tennessee Metal Scrap Statute

The State Metals Theft Laws summaries are not intended to provide or be relied as a legal advice. This material is provided to serve as a reasonable compilation of the most current state scrap laws and is intended to be a resource or supplement to, and provide ideas for, compliance with all applicable laws. The ISRI State Scrap Laws are subject to change and readers should visit http://www.isri.org/metalstheftdb to make certain they are reading the most recent version of ISRI's summaries of the State Metals Theft Laws

Please Note: Amendments by 2016 Tennessee SB 2134, effective April 12, 2016 and creating a new section in the state law, are included and noted in this summary.

Tennessee's Scrap Metal Dealers law is found in Title 62, Chapter 9; additional requirements concerning transactions with Metals Recycling Facilities are found in Title 39, Chapter 17, and are presented separately following the Scrap Metal Dealers provisions.

Materials Covered and other Definitions

"Scrap Metal Dealer" means a person who buys, exchanges or deals in Scrap Metal or an employee or agent of that Dealer who has the express or implied authority to buy, exchange or deal in Scrap Metal on behalf of the Dealer.

"Scrap Metal" means any ferrous or nonferrous metal that is no longer used for its original purpose and is capable of being processed for reuse by a metal recycling facility, including, but not limited to, iron, brass, wire, cable, copper, bronze, aluminum, platinum, lead, solder, steel, stainless steel, catalytic converters or other similar obsolete ferrous or nonferrous metals, but shall not include recyclable aluminum cans.

Restricted Scrap Metal refers to the following types of Scrap Metal as listed in Section 62-9-106:

Scrap Metal marked with the initials of an electric, telephone, cable or other public utility or an electric or telephone cooperative;
Utility access covers;
Street light poles and fixtures;
Road and bridge guard rails;
Highway or street signs;
Water meter covers;
Traffic directional and control signs;
Traffic light signals;
Any Scrap Metal visibly marked or painted with the name of a government entity, business, company or the name of the owner of the metal (must be marked in accordance with the Uniform Scrap Metal Marking System provision);
Property owned by a telephone, cable, electric, water or other utility, an electric or telephone cooperative or a railroad, and marked or otherwise identified as such;
Unused and undamaged historical markers or grave markers and vases.

"Licensed HVAC Contractor" means a person holding a license from the state board for licensing contractors with a CMC, MC, CMC-C, or MC-C classification.

"Department" means the Department of Commerce and Insurance.

"Commissioner" means the Commissioner of Commerce and Insurance or their designee or, in the event of their absence or vacancy in the office, the Deputy Commissioner.

Aggregate Value, as used in this summary, refers to the value of Scrap Metal in its original undamaged condition plus any costs which are or would be incurred in repairing or recovering property damaged in the theft or removal of the metal.

Exemptions

Scrap Metal transactions between registered Dealers are exempt provided the Scrap Metal is lawfully obtained and may be lawfully sold for scrap at the time of the transaction.

Registration

A Dealer must register itself and any location the dealer uses to engage in the scrap metal business with the Department. A registration is valid for 2 years, with registration and renewal fees set by the Department to cover administrative costs. Registrants must declare under penalty of perjury whether they have ever been convicted of a violation of the Tennessee Scrap Metal Dealers law or of a criminal offense of theft, burglary, or vandalism, which involves Scrap Metal. Upon the death of the registrant, registrations shall continue to be effective for the locations designated for at least 60 days; the Commissioner may extend the period for good cause. A registration shall expire upon notification to the Department by the location registered that the registrant is no longer an employee or agent of the location.

(added by SB 2134) Effective April 11, 2016, each location used by a registered Dealer for conducting business requiring compliance with Section 55-3-202 - Records of motor vehicle dismantler and recycler or scrap metal processor - shall pay an additional $500 fee accompanying their application for registration or renewal of a location. This additional fee will expire June 30, 2017.

Under Section 55-4-124. Registration of vehicles hauling certain materials, any vehicle, freight motor vehicle, truck-tractor, trailer or semitrailer or combinations of these vehicles that transports ferrous and non-ferrous scrap metal (among other listed materials) is permitted to register as follows; however, this section shall not be construed as authorizing the vehicles to use the interstate highway system:

A vehicle with 4 axles and designed to unload itself, with a gross weight not exceeding 74,000 lbs. including load, may register as a Class 10 vehicle or purchase the appropriate special zone tag;
A vehicle with 3 axles and designed to unload itself, with a gross weight not exceeding 66,000 lbs. including load, may register as a Class 9 vehicle or purchase the appropriate special zone tag.

Government or Waste Entity

Nothing in this law should be constructed to prevent a governmental entity, regulated landfill, or solid waste processing facility from selling any Scrap Metal donated to it or otherwise lawfully obtained by it without compensation, or from registering as a Dealer.

Pre-Purchase Inquiry

Before purchasing Scrap Metal, a Dealer must "conduct a reasonably diligent inquiry, based upon the seller, type and quantity of metal offered for sale and other circumstances surrounding the transaction, to determine whether the person selling or delivering the scrap metal has a legal right to do so and whether a lawful transaction may be made."

Recordkeeping

A Dealer that purchases or acquires Scrap Metal from a person must record the following information in chronological order of sale from day to day, as the business is transacted:

A right thumbprint impression, or left thumb or another finger if unavailable, with the finger used identified on the record;
If the Seller presents a bill or sale, receipt, or other document indicating lawful possession or acquisition of the Scrap Metal, a copy of such a document;
The date of purchase;
The Seller's name;
The amount paid for the Scrap Metal;
The weight of each kind of Scrap Metal;
A detailed description of the metal purchased using terminology developed by the Department.

One of the following; a Seller must present some form of identification to sell:

If the Seller has a valid state or federally issued photo ID card:

The Seller's name, sex, height, date of birth, residence address, and identification card number; and
A copy of the photo ID card;

If the Seller does not have a state or federally issued photo ID card:

A record of the information from some other form of state or federally issued identification; and
A photograph of the Seller;

The license plate number, make, and model of the Seller's motor vehicle;

For a commercial vehicle, the name of the business owning or leasing it;

Restricted Scrap Metal - Additional Recordkeeping

A purchase of Restricted Scrap Metal must also record a copy of the Seller's reasonable, written documentation of ownership or authorization to sell on the owner's behalf.

Retention

Records must be retained on the site where the transaction occurred for 3 years.

Inspection

During a Dealer's usual and customary business hours, a law enforcement officer or the Commissioner may inspect any purchased Scrap Metals in the possession of a Dealer and any required transaction records.

No Purchase from Minors

No Dealer may purchase, or acquire any Scrap Metal from a person under 18 years old, whether the metal is acquired directly from, through, or by the aid of the minor.

Beer Kegs

No Dealer may knowing purchase or possess a metal beer keg, whether damaged or undamaged, or any reasonably recognizable part of a metal beer keg, on any premises the Dealer uses to buy, sell, store, shred, melt, cut, or otherwise alter Scrap Metal.

HVAC

A Dealer may only purchase an air conditioner evaporator coil or condenser, in whole or in part, from a Seller bearing documentation with the following:

The Seller is an authorized agent, representative, or employee of the company.

The Seller's company is one of the following:

A licensed HVAC contractor who acquired the item in performance of contracting as defined in Section 62-6-102;
In a jurisdiction exempt from the requirements of Section 68-120, a company meeting all local or municipal permitting requirements to repair, replace, and install HVAC units containing copper evaporator coils or condensers; or
A company holding a current business tax license, with a Class 4 classification, or a current sales tax identification number indicating it is an HVAC installer or repairer;

Payment Restrictions - HVAC

No cash payments for an air conditioner evaporator coil or condenser. Payment must be by check or money order, payable to the Seller's company and mailed to its business address.

Payment Restrictions - Copper or Catalytic Converters

For copper or an unattached catalytic converter payment must be:

If the Seller is an agent or employee of a business, by check or money order made payable to the business and mailed to the business address.

If the Seller is not the agent or employee of a business, by check, money order, or voucher, at the option of the Seller subject to the following requirements:

A check must be mailed to the physical address provided on the driver's license the Seller used for identification.

If the Seller did not provide a driver's license, payment must be by voucher. No voucher may be redeemed sooner than 5 days from the date of the transaction. A voucher may only be redeemed by the person whose name appears on the voucher as the Seller or by their heirs or legal representative. If a voucher is not redeemed by an authorized person within 6 months of a transaction, it expires and the transaction amount must be transmitted to the Department within 1 year for use in the administration of the law. A voucher must include the following information:

The date on which the voucher may be redeemed;
The date of purchase;
The Seller's name;
The amount paid for the Scrap Metal;
The weight of each kind of Scrap Metal;
A detailed description of the metal purchased using terminology developed by the Department.

A Dealer may charge the Seller a fee established by the Department for the Dealer's administrative costs of processing and issuing a required check. The fee may vary according to the value or weight of the purchase, but shall not exceed $5 per check.

A Seller is exempt from the payment restrictions if the Seller is an agent or employee of a business that sells copper or unattached catalytic converters on a regular or frequent basis and the business has preregistered the Seller with the Dealer.

Payment Restrictions - Governmental or Waste Entity

Payment to a governmental entity, regulated landfill, or solid waste processing facility must be by check or money order, payable to the entity and mailed to its business address.

Uniform Scrap Metal Marking System

To be considered Restricted Scrap Metal, Scrap Metal marked or painted with the name of a government entity, business, company, or the name of the owner must be marked in accordance with a uniform scrap metal marking system developed by the Department. The Department may consult with other government departments and private companies in devising the system, and may appoint a committee to develop the system.

Uniform Scrap Metal Marking System Committee

If appointed, the committee shall consist of 5 to 7 members with at least one member from:

The scrap metal industry;
The Tennessee Association of Chiefs of Police;
The Tennessee Sheriffs' Association;
The Home Builders Association of Tennessee, and
A member of the public who is not engaged in any of the above groups.

Study - No Buy List

The Department was tasked with conducting a study of the cost and feasibility of implementing a "no buy list" where Dealers would be prohibited from purchasing Scrap Metal from persons listed on the Department's web site as having been convicted of a violation of this law or of theft, vandalism, or burglary pertaining to Scrap Metal. The Department was to have reported its findings to the state legislature by January 31, 2009.

Penalties

A person who is convicted of a violation of the Tennessee Scrap Metal Dealers law or of a criminal offense of theft, burglary or vandalism, which involves scrap metal, shall have any existing scrap metal registration immediately revoked and is prohibited from registering as a Scrap Metal Dealer for 5 years from the date of conviction.

The Commissioner may investigate a Dealer for an alleged violation of the Registration, Restricted Scrap Metal, HVAC, Payment Restrictions - HVAC, or Payment Restrictions - Copper and Catalytic Converters provisions, and must investigate such upon the verified written complaint of any person. If the Commissioner finds the Dealer in violation, the Commissioner must notify the Dealer of their right to a hearing in writing. If the Dealer fails to request a hearing in writing within 10 days, the hearing right is waived and the Commissioner may impose any sanction permitted by the law. The Commissioner may also deny an application or suspend, revoke, or refuse to issue or renew a registration for a violation of the provisions above, or of any other rule properly made by the Commissioner.

In addition to or in lieu of any other lawful disciplinary action, the Commissioner may assess a civil penalty of up to $1,000 for each violation, with each day of constituting a separate violation.

A Seller that knowingly sells or attempts to sell Restricted Scrap Metal to a Dealer without complying with the Restricted Scrap Metal - Additional Recordkeeping provision commits:

A Class A misdemeanor; or
If the Aggregate Value of the metal exceeds $500, a Class E felony punishable only by a fine of up to $5,000.

A Dealer that knowingly purchases or attempts to purchase Restricted Scrap Metal without complying with the Restricted Scrap Metal - Additional Recordkeeping provision commits a Class A misdemeanor.

A Seller or Dealer prosecuted for violating the Restricted Scrap Metal - Additional Recordkeeping provision may also be prosecuted for theft or any other applicable offense.

A violation of the HVAC or Payment Restrictions - HVAC provisions or the Beer Keg provision is a Class A misdemeanor punishable only by a fine, but a person prosecuted for such may also be prosecuted for any other applicable offense.

A person who violates the Scrap Metal Dealers Act, a Dealer who fails to or falsely registers, or a registered Dealer who knowingly purchases Scrap Metal that the Seller did not own or have authorization to sell or was unlawfully obtained by the Seller, commits either:

A Class A misdemeanor, punishable only by a fine; or
If the Aggregate Value exceeds $500, a Class E felony punishable only by a fine of up to $5,000.

A Seller who sells or attempts to sell Scrap Metal knowing it is stolen, whether by the Seller or another person, shall be subject to punishment for theft graded as provided in Section 39-14- 105 according to the Aggregate Value of the metal.

Definitions

"Metals Recycling Facility" means any business that is predominantly engaged in performing the process by which scrap, used or obsolete ferrous or nonferrous metals are converted into raw materials consisting of proper grades and having an existing or potential economic value.

Acknowledgement Required Items

A Seller may not sell, convey, or otherwise transfer to a Metals Recycling Facility any of the following, whether included with a load of scrap or contained or enclosed within any other item, without first obtaining a signed written acknowledgement from the facility that such has been sold, conveyed, or transferred:

Lead-acid battery;
Fuel Tank;
PCB-containing capacitor;
Chlorofluorocarbon refrigerant; or
Unspent air bag.

Notice to Seller

A Metals Recycling Facility must post the following notice, no smaller than 24" by 18", in a conspicuous location that is readily visible to all Sellers:

TENNESSEE LAW PROHIBITS THE SALE, TRANSFER OR CONVEYANCE OF ANY OF THE FOLLOWING ITEMS TO THIS FACILITY WITHOUT FIRST OBTAINING OUR SIGNED WRITTEN ACKNOWLEDGMENT THAT WE WILL ACCEPT THE ITEM:

LEAD-ACID BATTERIES;
FUEL TANKS;
PCB-CONTAINING CAPACITORS;
CHLOROFLUOROCARBON REFRIGERANTS; AND
UNSPENT AIR BAGS

A VIOLATION OF THIS LAW IS A CLASS B MISDEMEANOR.

Penalties

A violation of the Metals Recycling Facility provisions is a Class B misdemeanor.