Arizona Metal Scrap Statute

"Scrap Metals" includes (but is not limited to) insulated and uninsulated metallic cables.

"Ferrous Metals" means those metals that will attract a magnet.

Prohibited Scrap Metal, as used in this summary, refers to the items listed in Section 44-1642.01

• Metal manhole covers;
• Brass or bronze valves or fittings that are commonly used on structures for access to
  water for the purpose of extinguishing fires;
• Brass or bronze commercial potable water backflow preventer valves;
• Water meters used for measurement of the use and consumption of domestic water;
• Aluminum trench shoring that is commonly used for shoring below ground trenches
  and excavations for the construction of buildings and structures.
• Aluminum loading ramps used for loading and hauling motor vehicles;
• Aluminum or stainless steel beer or malt beverage kegs;
• Catalytic converters;
• Metal municipal storm grates that are used to allow for water drainage from municipal streets or alleys.

"Scrap Metal Dealers" means each person or business entity engaged in the business of purchasing, trading, bartering, or otherwise receiving secondhand or castoff material of any king which is commonly known as Scrap Metal. Excludes automotive recyclers as defined and licensed in Section 28-4301 and whose primary business is the dismantling, selling,or disposing of parts or accessories of motor vehicles.

"Industrial Account" means an entity that files or is required to file monthly returns for its transaction privilege tax licenses or a governmental entity that sells to a Dealer.

"Department" means the Department of Public Safety

Purchases from Industrial Accounts and other Dealers are exempt from the Reporting and Hold provisions.

Other exemptions are specific to and listed with each provision.The Recordkeeping, Seller's Receipt, Retention, Inspection, Payment Restrictions, and NoPurchase from Minors provisions (Section 44-1624 of the law) do not apply to transactions involving materials consisting of a metal product in its original manufactured form that is composed of no more than 20% by weight of nonferrous metal

Dealers and law enforcement must register on a free theft notification website that allows:

• Law enforcement to send detailed descriptions of stolen items to recycling operations and other law enforcement within at least a 100 mile radius of a theft;
• Dealers to alert law enforcement when the Dealers are offered suspicious metals

A Dealer must register with the Department every 2 years by submitting the following information along with a fee determined by the Department to cover administration costs.A Dealer does not need to separately register branch offices or wholly-owned subsidiaries.

• The Dealer's name and address;
• The name of each person who owns at least 10% of the business;
• Full personal identification info on each owner of the business;
• A copy of each owner's driver's license;
• The location of each principal office and branch office;
• The name and address of any wholly-owned subsidiary.

A Dealer must keep the following documents at each place of business:

• Proof of registration issued by the Department;
• A statement indicating compliance with the Theft Notification Website provision;
• An affidavit signed by the Dealer that the Dealer is in compliance with the law;
• A questionnaire the Dealer must prepare every 2 years to show compliance.

A Dealer must keep an English record, legibly printed or written in ink, of each Scrap Metal
transaction with the following information:

• The date, time, and place of the transaction;
• A photograph of the Scrap Metal;
• An identifying description and weight of the Scrap Metal;
• The dollar amount of the transaction;
• The following identifying information, unless the Seller is exclusively selling aluminum beverage containers:
  The Seller's name, physical description (including gender, height, weight,race, and eye and hair color), physical address, date of birth, and signature, a copy of the Seller's current driver's license, nonoperating ID license issued pursuant to Section 28-3165, or photo ID issued by a tribal government or the United States military to validate the information; and
  A copy of the identification used to verify the Seller's information.
  
  

A Dealer must provide a receipt to the Seller on site at the time of the transaction, for every transaction, with the following information:

• The date, time, and place of the transaction;
• An identifying description and weight of the Scrap Metal;
• The dollar amount of the transaction.

Records must be retained for 2 years: at the business premises for 1 year after making the final entry of any transaction; and at the business premises or any other reasonably available location for an additional year.

A Dealer's business premises, business records relating to Scrap Metal transactions, and business inventory must be open during regular business hours for reasonable inspection by a peace officer. Inspecting peace officers must first identify themselves and the purpose for the inspection to the Dealer, Dealer's manager, or other responsible person and comply with all of the Dealer's reasonable and customary safety requirements for the premises.The Dealer may require the officer to sign an inspection log with the officer's name, serial or badge number, time, date, and purpose of the inspection.

A Dealer's required registration documents (proof of registration, statement showing registration on a Theft Notification Website, affidavit of compliance, and biennial compliance questionnaire) for each place of business must be available for inspection bylaw enforcement. If a Dealer does not have the documents law enforcement must submit a notice of violation to the Dealer, and may not reinspect the premises for such until 15 days after the notice was received.

A Dealer must submit an electronic report to the Department within 24 hours of receiving Scrap Metal, except from an Industrial Account or another Dealer, with the following:

• The date, time, and place of the transaction;
• An identifying description and weight of the Scrap Metal;
• The dollar amount of the transaction;
• The Seller's name, physical description (including gender, height, weight, race, and eye and hair color), physical address, date of birth, and signature;
• A copy of the identification used to verify the Seller's information.
• The license number and state of issuance of the delivery vehicle.

The Department shall design and make available a seller and transaction form that may be used for reporting. A Dealer that submits information to the Department shall not be required to submit the same information to a local law enforcement agency.

7 day hold after a report is filed for any reportable transaction involving:

• Copper;
• Aluminum wire with a diameter of at least 3/8ths of an inch; or
• Any transaction with a value over $100.

Exempts transactions with Industrial Accounts or another Dealer, or purchases of:

• Used aluminum beverage containers;
• Ferrous Metals; or
• Scrap Metal authorized for release by a peace officer of that jurisdiction.

A Scrap Metal Seller must be at least 16 years old.

A Dealer may only knowingly purchase Prohibited Scrap Metal:

• From an Industrial Account;
• From another Dealer; or
• After the metal is authorized for release by a peace officer of that jurisdiction

A Dealer may only purchase or receive metallic wire that was burned in whole or in part to remove insulation from:

• An Industrial Account;
• Another Dealer; or
• A Seller who provides the Dealer written evidence identifying the person who delivers the wire that includes evidence the wire was lawfully burned.

A Dealer shall not accept aluminum wire with a diameter of at least 3/8ths of an inch or any copper wire that has had the insulation removed and shall not remove insulation from the wire until after the 7 day hold period unless the Seller is an Industrial Account or another Dealer.

No cash payments for purchases involving the following:

• Any Transactions involving air conditioning cooling coils; or
• Any of the following, unless the Seller is annually preregistered as an authorized Seller on behalf of an Industrial Account:
  
  Industrial accounts
  Copper and aluminum wire with a diameter of at least 3/8ths of an inch,
  Any scrap Metal transactions of $300 or more.
  
  

Payment for such must be by mailing a check or money order to the address provided in the transaction record, payable to the business name for an industrial account. For transactions involving air conditioning cooling coils with an Industrial Account, a Dealer may also pay the seller on site with a check made payable to the Industrial Account. A Seller may not participate in more than one cash transaction per day for Scrap Metal, or conduct a series of transactions for one vehicle load of Scrap Metal to avoid requirements.

The Department shall submit a report every 2 years to the President of the Arizona Senate and the Speaker of the Arizona House about Scrap Metal Dealers identifying the Dealers registered in Arizona.

The Department shall establish electronic reporting submission standards by rule, allowing
submission in a format that is compatible with the output format of at least 4 record keeping software programs currently in use in the scrap metal industry in Arizona and that can be electronically merged with the Department's database. The Department shall make reported information available to local law enforcement over the internet and provide for training and procedures to allow law enforcement to access the information.

(Added by HB 2288) The Department must post the name and address of each scrap metal dealer and the location of each principal office and branch location as submitted in the scrap metal dealer's registration on the Department's website.

The President of the Arizona Senate and the Speaker of the Arizona House for the first regular session in 2023 may appoint a joint legislative committee on metal theft to review the effectiveness of this law in deterring crime and the cost of compliance to industries affected. The Committee may report on its findings by December 1, 2023.

A Dealer who fails to maintain the required registration documents for each place of business is subject to any or all of the following that apply:

• A penalty of any costs associated with enforcement;
• The immediate suspension of all Scrap Metal transactions unless the business was
  previously registered as a Scrap Metal Recycler or has a local business license;
• 1st violation: a civil penalty of $500, except the Dealer is not subject to the penalty if the Dealer corrects the violation within 15 days of receiving notice; or
• 2nd or subsequent violation: a civil penalty of $1,000 and a suspension or revocation of the business license, or the suspension or permanent cessation of business operations if a business license is not required.

A Seller may not conduct a series of transactions for one vehicle load of Scrap Metal to avoid the requirements of the Recordkeeping or Payment Restrictions provisions.

A Dealer who fails to comply with the law is guilty of a class 1 misdemeanor.

Under Section 13-1802, a person commits theft if, without lawful authority, the person knowingly commits one of the following involving ferrous or nonferrous metal:

• Controls the metal of another with the intent to deprive the other person of it;
• Controls the metal of another knowing or having reason to know it was stolen; or
• Purchases metal within the ordinary course of business knowing it was stolen.

Under Section 13-1802, the value of any ferrous or nonferrous metal for sentencing includes the amount of any damage to property caused as a result of the theft. In an action for the theft of ferrous or nonferrous metal, unless satisfactorily explained or acquired in the ordinary
course of business by an automotive recycler as defined in Section 28-4301 or a Dealer:

• Proof of possession of Scrap Metal that was recently stolen may give rise to an inference that the person in possession was aware of the risk it was stolen or participated in the theft;
• Proof of sale of stolen Scrap Metal at a price substantially below its fair market value may give rise to an inference that the person selling was aware of the risk that it was stolen

Under Section 12-712, a defendant may be found not liable in a civil action if the claimant (or the deceased person in an action taken by their heir or estate) was attempting to commit, was committing, or was immediately fleeing from an act in violation of the metal theft provisions of Section  13-1802 (subsection A, paragraphs 7 and 8), and was as a result in any way responsible for the accident or event that caused their harm.

Under Section 13-3728, the purchase or sale of a used catalytic converter is a class 1
misdemeanor unless the purchase or sale:

• Is in the ordinary course of business by a commercial motor vehicle parts or repair
  business in connection with the sale or installation of a new catalytic converter;
• Is by an automotive recycler as defined and licensed in Title 28, Chapter 10; or
• Is conducted as prescribed by Section 44-1642.01 (the Prohibited Scrap Metal provision).

Counties, cities, and towns may not enact or enforce ordinances, rules, or regulations that conflict, but may enact such that regulate Scrap Metal Dealers and are not in conflict.

The power to register Scrap Metal Dealers is preempted by the state; this does not affect a city's, town's, or county's power to enforce business licensing laws, or a city's, town's, or county's system for licensing a Scrap Metal Dealer if the licensing system includes background checks or identification and fingerprinting of the owners of the Scrap Metal Dealer. A Scrap Metal Dealer's license that is current and in good standing with a city's, town's or county's licensing system before September 13, 2013 is in compliance with that licensing system and the city, town or county may not require the Scrap Metal Dealer to reapply for licensure in order to be in compliance with the city's, town's or county's licensure system unless there is an event or circumstance that requires an amendment or filing pursuant to the city's, town's or county's licensing system's requirements