Texas 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

Materials Covered and Other Definitions
Exemptions
License and Registration
Recordkeeping
Retention
Inspection
Reporting
Hold
Payment Restrictions
Cash Transaction Cards (added by HB 2187)
Hours of Purchase
Notice to Sellers
Restrictions on Certain Property
Prohibited Acts
Penalties
Hearing
Advisory Committee
Texas Department of Public Safety
Preemption

Please Note: Amendments by 2015 Texas HB 2187, effective September 1, 2015, are included and noted in this summary.

Texas has special requirements for items listed as "Regulated Metal" as opposed to the general term "Regulated Material". Due to the similarity of the terms, references to "Regulated Metal" are bolded in this summary.

Materials Covered and Other Definitions

"Regulated Material" means Aluminum Material, Bronze Material, Copper or Brass Material, Lead Material, or Regulated Metal. (Lead Material added by HB 2187)

"Aluminum material" means a product made from aluminum, an aluminum alloy, or an aluminum by-product. The term includes aluminum wiring and an aluminum beer keg but does not include another type of aluminum can used to contain a food or beverage.

"Bronze Material" means a cemetery vase, receptacle, or memorial made of bronze; bronze statuary; or material readily identifiable as bronze, including bronze wiring.

"Copper or Brass Material" means (italicized text added by HB 2187):

Copper pipe or copper tubing.

(added by HB 2187) "Lead Material" means:

A commercial grade lead battery, lead-acid battery, or spiral cell battery; or
A material or an item readily identifiable as being made of or containing lead.

A power inverter or insulated or noninsulated copper wire or cable that contains copper or an alloy of copper or zinc and is of the type used by:

A public utility or common carrier;
A telecommunications provider as defined by TX Utilities Code Section 51.002;
A cable service provider as defined by TX Utilities Code Section 66.002; or
A video service provider as defined by TX Utilities Code Section 66.002;

A copper or brass item commonly used in construction or by:

A public utility;
A telecommunications provider as defined by TX Utilities Code Section 51.002;
A cable service provider as defined by TX Utilities Code Section 66.002; or
A video service provider as defined by TX Utilities Code Section 66.002;

"Regulated Metal" consists of the following:

Manhole covers;
Guardrails;
Metal cylinders designed to contain compressed air, oxygen, gases, or liquids;
Beer kegs made from metal other than aluminum;
Historical markers or cemetery vases, receptacles, or memorials made from metal other than aluminum;
Unused rebar;
Street signs;
Drain gates;
Safes;
Communication, transmission, and service wire or cable;
Condensing or evaporator coils for central heating or air conditioning units;
Utility structures, including the fixtures and hardware;
Aluminum or stainless steel containers designed to hold propane for fueling forklifts;
Metal railroad equipment, including tie plates, signal houses, control boxes, signs, signals, traffic devices, traffic control devices, traffic control signals, switch plates, eclips, and rail tie functions;
Catalytic converters not attached to a vehicle;
Fire hydrants;
Metal bleachers or other seating facilities used in recreational areas or sporting arenas;
Any metal item clearly and conspicuously marked with any form of the name, initials, or logo of a governmental entity, utility, cemetery, or railroad;
Insulated utility, communications, or electrical wire that has been burned in whole or in part to remove the insulation;
Backflow valves;
Metal in the form of commonly recognized products of the industrial metals recycling process, including bales, briquettes, billets, sows, ingots, pucks, and chopped or shredded metals; and
(added by HB 2187) Commercial grade lead batteries or lead-acid batteries.

Condensing or evaporator coils from a central heating or air conditioning unit and communications wire burned to remove insulation are subject to special documentation requirements.

Bronze cemetery vases, receptacles, memorials, or statuary, and aluminum irrigation pipes are subject to special reporting requirements.

Lead acid batteries, fuel tanks, or PCB-containing capacitors are subject to special seller requirements and purchase restrictions.

Motor vehicles that include, contain, or enclose a scrap tire, and metal alcoholic beverage kegs are subject to special purchase restrictions.

"Metal Recycling Entity" is a business operating from a fixed location that predominantly:

Converts scrap, used, or obsolete metal into raw material products;
Uses said raw materials in the manufacture of producer or consumer goods; or
Acquires scrap metals for use in one of the above purposes.

"Department" means the Texas Department of Public Safety.

"Personal Identification Document" means a valid US state-issued driver's license, a US military ID card, or a state-issued personal ID certificate.

Exemptions

The law exempts:

Purchases of Regulated Material from Sellers that sell Regulated Material in the ordinary course of the Seller's business;
Purchases of Regulated Material by manufacturers who primarily manufacturer iron and steel products made from melting scrap iron and scrap steel; or
The transport of materials to or from a Recycler.

The Department's summary report tracking sales of Regulated Metal exempts "regulated material sold by a utility company, municipality, manufacturer, railroad, cemetery, cable or satellite entity, or other business entity that routinely has access to regulated metal".

Transactions between Recyclers are exempt from the Recordkeeping requirements if the purchaser verifies the Seller's registration using the state database.

Transactions with Sellers that regularly sell Regulated Material in the ordinary course of their business are exempt from the automatic Hold requirements on Regulated Metal.

The Restrictions on Certain Property provision exempts sales or transfers by or on behalf of a Recycler, as well as fuel tanks that has been completely drained and rendered unusable in accordance with Texas Commission on Environmental Quality rules. The restriction on sales or transfers of a motor vehicle that that includes, contains, or encloses a scrap tire does not apply to a motor vehicle sold or transferred from another state.

License and Registration

Political subdivisions may require and issue a license or permit to operate as a Recycler, with a maximum $100 issuance or renewal fee that may not be increased without approval from the local governing body based on costs associated with law enforcement and administration. Political subdivisions with licensing or permitting requirements must submit information on the businesses to the state.

Recyclers must register with the state every 2 years; the law mandates a maximum registration fee of $250 annually and renewal fees with tiered late renewal penalties. The Department must send an expiration notice to registered Recyclers at least 45 days before their registration expires. The Department may establish registration qualifications by rule, which may include accepting copies of a license or permit issued by a local government.

Recordkeeping

A Recycler must make an electronic or written English record of and a Seller must present the following material for transactions involving Regulated Materials. A Recycler does not have to collect the signed statement of ownership or a copy of the Seller's ID if both are already on file and the information has not changed.

Date and Place of the purchase;
(added by HB 2187) The amount of the purchase;
Seller's name and address;
Identification number from the Seller's personal ID document, which must be visually verified at the time of the transaction;
Copy of seller's personal ID Document;
Description in accordance with custom of commodity type and quantity purchased;
The make, model, color, license plate number and issuing state of the motor vehicle used to transport the Regulated Material;
For communications wire burned to remove insulation, a copy of acceptable documentation that the material was salvaged from a fire.
For an item listed as Regulated Metal, a digital photograph or video of the Seller's entire face and of each type of Regulated Metal purchased.
For any item, a Recycler may photograph the Seller's entire face and obtain the name of the Seller's employer for the record.

One of the following:

A copy of written documentation evidencing that the Seller is the legal owner or is lawfully entitled to sell;
A statement of ownership signed by the Seller that the Seller is the legal owner or is lawfully entitled to sell; or
A photograph of Seller's motor vehicle with the make, model, and license plate number identifiable.

For condensing or evaporator coils from a central heating or air conditioning unit:

The identifying number from the Seller's air conditioning and refrigeration contractor license issued under Tex. Occ. Code Section 1302 Subchapter F or G;
A copy of the Seller's air conditioning and refrigeration technician registration issued under Tex. Occ. Code Section 1302 Subchapter K;
A copy of documentation showing the Seller purchased the coils; or
A copy of documentation showing the Seller purchased a replacement central heating or air conditioning unit.

(Added by HB 2187) For Regulated Material paid for by:

Cash, a copy of the Seller's cash transaction card or approved application for a cash transaction card;
Debit card, a copy of the debit card receipt and the Seller's cash transaction card or approved application for a cash transaction card;
Check, a copy of the check.

If a Seller represents themselves as a Recycler, the purchaser must either:

Verify the Seller's registration by using the state database, or
Obtain a copy of the Seller's registration in addition to the record information above

Retention

Records must be retained for 2 years, or 91 days for video recordings, or 181 days for a digital photograph, in an "easily retrievable" format.

(added by HB 2187) A Recycler must preserve for 2 years:

Each application for a cash transaction card the entity receives, and
A copy of each transaction card the entity issues or renews.

Inspection

Records must be available for inspection within 72 hours after the time of purchase. On request, a Recycler shall permit a Texas peace officer, a Department representative, or a representative of a political subdivision that issues a Recycler license or permit, to inspect, during the Recycler's usual business hours, the Recycler's records, Regulated Material in the Recycler's possession, or an application for a cash transaction card submitted to the Recycler (italicized text added by HB 2187). The person seeking to inspect a record or material must:

Inform the Recycler of their status as a peace officer; or
Inform and display identification or another appropriate document establishing them as a representative of the Department or an appropriate political subdivision.

Reporting

Recyclers must send an electronic transaction report to the Department by the close of the Recycler's second working day after the date of acquisition. A Recycler is not required to include the amount of the purchase or a copy of the cash transaction card, debit card receipt, or check in the transaction report (italicized text added by HB 2187).

For a purchase of bronze cemetery vase, receptacle, memorial, or statuary, or an aluminum irrigation pipe, a Recycler must also notify the Department by phone, email, or the Department's website by the close of the business on the first working day after the purchase date in addition to the standard report, unless the Seller:

Is the manufacturer or fabricator of the material or pipe;
Bears a bill of sale for the material or pipe; or
Is the owner of the material or pipe.

Recyclers may submit reports by fax if they receive an annual exception from the Department for having no available and reliable means of electronic transmission.

Hold

For an item of Regulated Metal, the Recycler must hold the item for the following unless the Seller regularly sells Regulated Material in the ordinary course of business:

8 days, excluding weekends and holidays, if the item is a cemetery vase, receptacle, or memorial made from a Regulated Material other than aluminum material; or
72 hours, excluding weekends and holidays, for other items.

A Peace officer may issue a 60 day hold on an item of Regulated Material by issuing the Recycler written notice specifically identifying item alleged stolen and informing the Recycler of the hold requirements.

Payment Restrictions

Under Section 1986.038.(b), a metal recycling entity may not pay for Regulated Material in cash unless they are registered with the state and licensed or permitted by their political subdivision, if applicable. The Department may also prohibit cash payments by metal recycling entities that fail to comply with the Reporting requirements. Political subdivisions may not enact more restrictive limits on cash payments after January 1, 2011.

(added by HB 2187) A Recycler may only pay for Regulated Material by:

Check if the Recycler records a copy of the check;
Money order; or
Direct deposit by electronic funds transfer.

If the Seller presents a cash transaction card issued by a Texas Recycler or the Recycler obtains a copy of the Seller's card from the Recycler's records:

Cash if the Recycler records a copy of the cash transaction card or the application for such, unless the metal recycling entity is prohibited under Section 1956.038.(b);
Debit card if the Recycler records a copy of the debit card receipt as well as the cash transaction card or a copy of the application for such;

Cash Transaction Cards (added by HB 2187)

An application for the issuance or renewal of a cash transaction card must include:

The name, address, sex, and birth date of the applicant;
The identification number from the applicant's personal identification document;
A digital photo that accurately depicts the applicant's entire face taken at the time the applicant completes the application;
A clear and legible thumbprint of the applicant;
The signature of the applicant; and
The signature of the individual approving the application on behalf of the Recycler.

A Recycler may approve an application upon receipt and issue a cash transaction card; the Recycler must mail the issued card to the address provided on the application for the card. A cash transaction card is not transferrable, is valid for up to 2 years, and must include:

The name and address of the Seller;
A digital photo of the Seller that accurately depicts the Seller's entire face;
An identifying number unique to the individual card; and
The expiration date of the card, which may not be later than 2 years from the date it was issued or renewed.

A Recycler must preserve for 2 years:

Each application for a cash transaction card the entity receives, and
A copy of each transaction card the entity issues or renews.

Hours of Purchase

A recycler may not purchase Regulated Material from the general public more than 15 consecutive hours in one day or later than 9 PM.

Notice to Sellers

A Recycler must maintain in a prominent place at their business, in open view to Sellers, a notice in 2-inch lettering that states the Recycler's usual business hours as well as the following, which may be on a sign with other information a Recycler is required to display:

A PERSON ATTEMPTING TO SELL ANY REGULATED MATERIAL MUST PRESENT SUFFICIENT IDENTIFICATION AND WRITTEN PROOF OF OWNERSHIP REQUIRED BY STATE LAW.

WARNING: STATE LAW PROVIDES A CRIMINAL PENALTY FOR A PERSON WHO INTENTIONALLY PROVIDES A FALSE DOCUMENT OF IDENTIFICATION OR OTHER FALSE INFORMATION TO A METAL RECYCLING ENTITY WHILE ATTEMPTING TO SELL ANY REGULATED MATERIAL.

A Recycler must also post a 24-inch horizontal by 18-inch vertical sign that is readily visible to the Seller and that includes the following language:

TEXAS LAW PROHIBITS:

THE SALE OF A WHOLE, FLATTENED, OR JUNKED MOTOR VEHICLE, AN APPLIANCE, OR ANY OTHER SCRAP METAL ITEM CONTAINING A LEAD-ACID BATTERY, FUEL TANK THAT HAS NOT BEEN COMPLETELY DRAINED AND RENDERED UNUSABLE, OR PCB-CONTAINING CAPACITOR; AND
THE SALE OF LEAD-ACID BATTERIES, FUEL TANKS THAT HAVE NOT BEEN COMPLETELY DRAINED AND RENDERED UNUSABLE, OR PCB-CONTAINING CAPACITORS INCLUDED WITH OTHER SCRAP METALS WITHOUT OUR PRIOR WRITTEN ACKNOWLEDGMENT.

VIOLATION OF THIS LAW IS A MISDEMEANOR.

Restrictions on Certain Property

Before selling or transferring a lead-acid battery, fuel tank, or PCB-containing capacitor that is included with another type of scrap, the Seller must obtain a written and signed acknowledgement from the Recycler that the scrap contains one or more of the listed materials. A Seller may not sell or transfer a motor vehicle, an appliance, or any other scrap, used, or obsolete metal item that contains a lead-acid battery, fuel tank, or PCB-containing capacitor as a part.

A Seller may not sell or transfer:

A motor vehicle that includes, contains, or encloses a scrap tire.
A metal alcoholic beverage keg unless the Seller is the manufacturer of the keg, the brewer or distiller of the beverage that was contained in the keg, or an authorized representative of the manufacturer, brewer, or distiller.

Prohibited Acts

Displaying a false or invalid personal identification document, making a false material statement or representation, displaying or providing information a person knows is false or invalid, displaying another individual's identification, or violating the Payment Restrictions are all prohibited acts.

Penalties

(added by HB 2187) The Public Safety Commission, after notice and an opportunity for a hearing, may impose an administrative penalty on a person who violates the Reporting provision after September 1, 2015. The amount of the penalty may not exceed $1,000; each day the violation occurs or continues to occur is considered a separate violation. In determining the amount, the Commission shall consider:

The seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation;
The economic harm caused by the violation;
The history of previous violations;
The amount necessary to deter a future violation;
Efforts to correct the violation; and
Any other matter that justice may require.

(added by HB 2187) The enforcement of the administrative penalty may be stayed while the order is under judicial review if the person pays the penalty to the clerk or files a supersedeas bond with the court in the amount of the penalty. A person who cannot afford such may stay enforcement by filing an affidavit as required by the Texas Rules of Civil Procedure, subject to the right of the Commission to contest the affidavit. The Attorney General may sue to collect the penalty. A proceeding to impose an administrative penalty is considered to be a contested case under TX Government Code Chapter 2001. If any element of the offense occurred before September 1, 2015, the offense is considered to be committed before this penalty was effective and must be governed by the former law.

Failure to obtain a required local license or permit is a Class B misdemeanor, or a Class A misdemeanor if the defendant has been previously convicted of the same. A violation is also subject to a maximum $1,000 civil penalty for each violation, with each day a violation occurs or continues to occur counting as a separate violation. The Department or a political subdivision may enjoin the business operations of a Recycler for 30 to 90 days if the Recycler has not submitted an application for a required registration, license, or permit.

Knowingly committing a Prohibited Act is a Class A misdemeanor, or a state jail felony if previously convicted of a violation of Subchapter A-3: Practice by Certificate Holders.

Knowingly failing to register, representing oneself as a Recycler or performing collection services without a registration, failing to report, or failing to abide by the hours for purchasing material are Class A misdemeanors punishable by a maximum $10,000 fine, or a state jail felony if previously convicted of the same. Municipalities may retain 10% of the fine; the rest is to be used to finance administration of the law and fund grants distributed under the prevention of scrap metal theft grant program established by Tex. Gov. Code Section 411, Subchapter N.

Knowing purchase of stolen Regulated Material or insulated communication wire that has been burned and is not accompanied by acceptable documentation is a Class A misdemeanor, or a state jail felony if previously convicted of the same. A court may also order a convicted Recycler to cease doing business for 30 days from the date of the order for each violation, or 180 days for each violation if previously convicted of a violation under the Criminal Penalty section (Section 1956.040).

Knowing sale of stolen Regulated Material is a state jail felony, or a 3rd degree felony if previously convicted of the same.

If an offense under the Criminal Penalty section also constitutes an offense under any other law, the actor may be prosecuted under the Criminal Penalty or the other law.

A person who violates the requirements of the Restrictions on Certain Property provision commits a misdemeanor punishable by a maximum $1,000 fine and/or 60 days confinement in the county jail.

A person who violates this chapter or a rule adopted under this chapter is liable to this state for a maximum $1,000 civil penalty for each violation. The amount of the penalty shall be based on the seriousness of the violation; the history of previous violations; the amount necessary to deter a future violation; and any other matter that the justice may require. However, a civil penalty may not be assessed for violations of the requirements for Registration, Reporting, Prohibited Acts, or Hours of Purchase.

The Department shall deny an application for a certificate of registration, suspend or revoke a certificate of registration, or reprimand a registered person who:

Obtains a certificate of registration by means of fraud, misrepresentation, or concealment of a material fact;
Sells, barters, or offers to sell or barter a certificate of registration; or
Violates a provision of this chapter or a rule adopted under this chapter.

A person commits a Class B misdemeanor if the person solicits the purchase of Regulated Material at a location other than a business location at which the material is produced as a by-product in the ordinary course of that business.

A person who violates this chapter or a rule adopted under the chapter, including such issued by a local government in compliance with the Preemption provision, is guilty of a Class C Misdemeanor; however, if such also constitutes an offense under another section of the chapter, the person may only be prosecuted under the other section.

Hearing

A person whose application for a certificate of registration is denied, whose certificate of registration is suspended or revoked, or who is reprimanded is entitled to a hearing before the Department if the person submits to the Department a written request for the hearing.

Advisory Committee

The law creates a 12 member Advisory Committee appointed by the Director of the Department of Public Safety, consisting of the following:

1 representative of the Department;
2 representatives of local law enforcement from different municipalities with populations under 200,000
2 representatives of local law enforcement from different municipalities with populations between 200,000 and 500,000;
1 representative of local law enforcement from municipality with a population greater than 500,000;
5 representatives of metal recycling entities (HB 2187 increased from 4);
2 representatives of industries impacted by theft of Regulated Material;
(added by HB 2187) 1 sheriff of a county with a population of 500,000 or more; and
(added by HB 2187) 1 sheriff of a county with a population of less than 500,000.

The Advisory Committee elects its own presiding officer to 2 year term (no term limit) and meets annually and at call of the presiding officer or Director. No compensation or reimbursement is granted.

The Department must submit annual reports to both chambers of the Texas Legislature on the number of Recyclers who complied with the registration requirements and the total number of Recyclers identified statewide; the report must include information submitted by political subdivisions. The Department must also make a list of all registered Recyclers available to the public on its website, containing a Recycler's name, physical address, and the name of and contact information for a representative of the Recycler.

The Department must establish a state electronic reporting system to track sales of Regulated Metal and post a summary of reports to its website. The sales report must include the frequency with which a person presents Regulated Materials for sale to a Recycler by county or region. The report must maintain the confidentiality of all information provided, including the name of the seller, the price paid for the purchase, and the quantity of Regulated Material purchased. The report shall exclude "regulated material sold by a utility company, municipality, manufacturer, railroad, cemetery, cable or satellite entity, or other business entity that routinely has access to regulated metal".

The Department may enter into a contract to operate the statewide reporting system, but the contract must require that the contractor maintain the confidentiality of all information and specify that the contract may be terminated for a violation of confidentiality. The Department must investigate complaints alleging that contractors have failed to maintain the confidentiality of information related to sales of Regulated Material.

The Department may investigate a person who engages in a practice that violates the law or a complaint filed with the Department against a registered Recycler.

Texas Department of Public Safety

The Department is permitted to issue broad rules on various implementations of the law.

Preemption

Political subdivisions may adopt rules, charters, or ordinances or issue regulations imposing more stringent standards that do not conflict; the law specifically mentions political subdivisions creating recordkeeping thumbprint requirements and/or reporting requirements. A political subdivision must provide a minimum 30-day notice followed by public hearing prior to enacting a prohibition on the sale or use of a recyclable product. Political subdivisions may not enact limits on cash payments after January 1, 2011.