Who is defined as a scrap dealer under the Scrap Metal Dealers Law and Rules?
A scrap metal dealer is any person, including any corporation, firm, company or association or an employee or agent who has the express or implied authority to buy, exchange or deal in scrap metal on behalf of the dealer. The business and any other person or entity acting as a scrap metal dealer or on behalf of the scrap metal business must register with the Department of Commerce and Insurance. T.C.A. 62-9-101(4) and Rule 0780-05-14-.02(2)
What do scrap metal dealers have to do in order to comply with the law?
Effective July 1, 2012 all scrap metal dealers and any location used by the dealer to purchase, deal or engage in the scrap metal business must be registered with the Department of Commerce and Insurance. T.C.A. 62-9-102 (a)
I occasionally sell scrap metal and I have been told to register so that it will be easier for me to conduct business with scrap metal dealers – how do I register?
You should register as an Individual/Employee
scrap metal dealer. If you acquire a location that you use for dealing in scrap metal you must register that location with the Department
I operate a scrap metal business and I am the only person who works with the business - how do I register?
If you are not a corporation, limited liability company or partnership you should register as a Business
and check the sole proprietor box. The law requires that you register yourself and your location with the Department. If you use your home or other location for the scrap metal business then you are required to register that address. If you open a second location or begin utilizing an additional location for your scrap metal business the new address must be registered separately with the Department. In the event, you hire an employee who will have the authority to act as a scrap metal dealer; the employee must register separately as an Individual/Employee and submitting the applicable fee.
I work for a scrap metal dealer who is already registered – do I need to register?
If you are authorized to act as a scrap metal dealer you should register as an Individual/Employee
. The application will require you to list your employer’s address as well as your home address. In the event, your employment or mailing address changes you should notify the Department within thirty (30) days.
I am an employee of a scrap metal business and I am currently registered with the Department. I am going to start splitting my time between two scrap metal business locations – do I need to do anything?
Yes. You need to register the second location with the Department. You should complete the Individual/Employee
registration and list the second location. The registration fee for the new location is one hundred and seventy five dollars ($175.00).
I operate several scrap metal businesses across the State – how do I register?
You should register as a Businessand check the appropriate box indicating the appropriate legal entity. Every location within the State must be separately registered as well as all employees authorized to deal in scrap metal at those locations.
For example, if you operate five scrap metal businesses called ABC Scrap Metal in five locations you will submit five applications listing yourself as the Registrant/Applicant doing business as (DBA) ABC Scrap Metal. You will register each ABC Scrap Metal location on a separate application and pay a separate fee of one hundred and seventy five dollars ($175.00) for each location.
As your business expands, you will be required to submit a registration application for every new location and pay the registration fee. Any employees authorized to act as a scrap metal dealer should complete the Individual/Employee registration separately and pay the registration fee if applicable.
I was convicted of a theft/burglary or vandalism involving scrap metal – can I register as a scrap metal dealer?
An applicant who has been convicted of a violation of this chapter or has a conviction for the criminal offense of theft, burglary or vandalism, where the offense involves scrap metal, shall be prohibited from registering under this chapter for five (5) years from the date of conviction. T.C.A. 62-9-102 (c)
How often do I need to renew the scrap metal registration?
The scrap metal registration is renewable very two (2) years and the renewal fee is one hundred and twenty five dollars ($125.00). Rule 0780-05-14-.05
What is defined as scrap metal under the Scrap Metal Dealers Law?
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. T.C.A. 62-9-101 (3)
What records does the law require regarding seller transactions?
No scrap metal dealer may purchase or otherwise acquire scrap metal from a person unless that person presents a state or federally issued photo identification card that appears valid on its face. The dealer shall record the name, sex, height, date of birth, residence address and the identification card number.
If the seller does not have a state or federally issued photo identification card, the dealer shall require the seller to present some form of state identification, record the information on the card, take a photograph of the seller and obtain a right thumbprint impression.
The dealer shall also record the license plate number and make and model of the motor vehicle the seller is driving. If the vehicle is a commercial vehicle, the dealer shall record the name of the business owning or leasing the vehicle. If the dealer is driving a commercial vehicle, the buyer shall record the name of the business owning or leasing the vehicle.
Prior to purchase, the dealer shall conduct a reasonably diligent inquiry into the sale, considering the seller, quantity of metal offered for sale and any other circumstances surrounding the transaction to determine whether the seller has a legal right to sell or deliver the scrap metal. If the seller presents a bill of sale, receipt or other documentation indicating lawful possession or acquisition, the dealer must photocopy the document. T.C.A. 62-9-103
What scrap metal records are required?
The dealer shall maintain transaction records of each purchase by date of purchase, name of seller, the amount paid for the scrap metal and the weight of each kind of scrap metal. A detailed description of the metal being purchased shall also be maintained using the uniform terminology developed by the department. The entries shall be made in chronological order of sale from day to day, as the business is transacted. T.C.A. 62-9-104(c)
Who has the right to inspect records?
During the usual and customary business hours of a scrap metal dealer, a law enforcement officer or the commissioner or the commissioner’s designee shall have the right to inspect, without a warrant or subpoena any purchased scrap metals in the possession of the dealer and any records required to be maintained by the dealer pursuant to this chapter. T.C.A. 62-9-105
How long and where must the scrap metal records be maintained?
All records required to be made available shall be maintained on the site where the transaction occurred for a period of three (3) years from the date of the transaction. T.C.A. 62-9-105 (c)(3)
Do registered dealer to dealer transactions have to comply with the Scrap Metal Dealer law?
This chapter shall not apply to scrap metal transactions that take place between a scrap metal dealer registered pursuant to this chapter and another registered dealer; provided, that the scrap metal is lawfully obtained by the seller and, at the time of the transaction, may lawfully be sold for scrap. The terms of sale between two (2) registered dealers shall be determined by the parties. T.C.A. 62-9-112
What kind of complaints can the Department of Commerce and Insurance investigate?
The law requires the Commissioner to investigate any written complaint that articulates a prima facie case of unregistered activity or violations involving the sale or purchase of certain metals originating in public utilities, government owned property or historical markers and graves or the unauthorized purchase of an air conditioner evaporator coil or condenser. T.C.A. 62-9-114
What penalties may the Department impose for violations of the Scrap Metal Dealer law?
The Department may impose civil penalties up to one thousand dollars ($1000.00) per violation and suspend, revoke or refuse to renew a scrap dealer’s registration. T.C.A. 62-9-110
What are the rules regarding payment for scrap metal that consists of copper or an unattached catalytic converter?
If the person selling scrap metal which in whole or in part, consists of copper or an unattached catalytic converter is selling as an agent or employee of a business, payment for the metal shall be made only by check or money order, mailed to the business address of the business for whom the employee or agent is employed, and the payee on the check shall be the name of the business.
A business that sells the type of scrap metal specified on a regular or frequent basis may annually preregister with a scrap metal dealer a list of employees who are authorized to sell on behalf of the business. A scrap metal dealer may pay an authorized, preregistered employee by any method, on site, and at the time of the transaction.
If the person selling scrap metal specified in this subdivision is not an employee or agent of a business, payment for the scrap metal shall be by check, money order or voucher, at the option of the seller.
If the seller elects payment by check or money order, it shall be mailed to the physical address provided on the driver license the seller used for identification. If the seller did not produce a driver license with a physical address on it, payment shall be by voucher.
If a voucher is not redeemed by an authorized person within six (6) months of the date of the transaction, the voucher expires and may no longer be honored by the dealer after the expiration date. The dealer shall have one (1) year from the date of the voucher's expiration to transmit the transaction amount to the department for use in the administration of this chapter. Unredeemed voucher funds may be transmitted to the department in the same manner as dealer registration and renewal fees.
If the seller elects payment by voucher, or if payment must be by voucher, the dealer shall give the seller a voucher for the amount of metal purchased. The voucher shall include the same information required under subdivision (b)(2) and the date on which the voucher can be redeemed. The voucher may only be redeemed by the person whose name appears on the voucher as the seller or by the person's heirs or legal representative. No voucher may be redeemed by the voucher holder or the holder's heirs or legal representative sooner than five (5) days from the date of the scrap metal transaction. T.C.A. 62-9-104
Can the dealer charge for issuing checks the required checks?
Yes. The scrap metal dealer may charge a check issuance fee of ten percent (10%) of the face value which shall be a minimum of two dollars ($2.00) and a maximum of five dollars ($5.00) per check. Rule 0780-05-14-.07
What should the dealer do with unused vouchers?
Vouchers issued for payment shall expire six (6) months from the transaction date and any unredeemed vouchers shall be remitted to the Department of Commerce and Insurance within one (1) year of the voucher’s expiration. Rule 0780-05-14-.08
Can a dealer purchase scrap metal from a minor?
No dealer shall purchase or receive, or otherwise acquire, any scrap metal from a person under eighteen (18) years of age, whether the metal is acquired directly from, through or by the aid of the minor. T.C.A. 62-9-104(4)
Can a dealer purchase from a person who does not have or refuses to present a state issued or federally issued identification?
If the person presenting the scrap metal for sale does not have a state or federally issued photo identification card, the dealer shall require the seller to present some form of state or federally issued identification, photograph the person and record the information contained on the identification card prior to the transaction being made. Even if a photograph of the seller is taken, the dealer is prohibited from making the transaction if the seller does not have, or refuses to present, the required identification. T.C.A. 62-9-103 (2)
Can a scrap metal dealer purchase scrap metal from a person if the legal right to sell the scrap metal cannot be determined?
Before purchasing scrap metal from a person, the dealer shall 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. If the person presents a bill of sale, receipt or other document indicating that the person is in lawful possession of the scrap metal or it was otherwise lawfully acquired, the dealer shall photocopy the document and maintain it with the transaction information otherwise required by this section. T.C.A. 62-9-104 (b)(1)
What are the special laws related to utilities, government property, historical markers, etc.?
It is an offense to knowingly sell or attempt to sell to a scrap metal dealer or for a scrap metal dealer to knowingly purchase or attempt to purchase the following types of scrap metal: 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; 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; and Unused and undamaged historical markers or grave markers and vases.
It is an exception to application of this section that the person attempting to sell the scrap metal provides reasonable, written documentation that the seller is the owner of the scrap metal or is an employee, agent or other person authorized to sell the scrap metal on behalf of the owner. The dealer shall make a photo copy of any documentation provided pursuant to this subsection and retain the copy as part of the transaction record. T.C.A. 62-9-106
What are the special laws related to air conditioner coils or condensers?
It is an offense for a scrap metal dealer to pay cash to a person who presents an air conditioner evaporator coil or condenser, in whole or in part, for sale as scrap or for the dealer to make payment of any kind at the time of the transaction.
Scrap metal described in this subsection may only be sold for scrap by an authorized agent, representative or employee of one of the following: (1) A licensed HVAC contractor who acquired the evaporator coil or condenser in the performance of contracting as defined in § 62-6-102; (2) In a jurisdiction exempt from the requirements of title 68, chapter 120, pursuant to § 68-120-101, a company meeting all local or municipal requirements to obtain a permit from that jurisdiction to repair, replace and install HVAC units containing copper evaporator coils or condensers; (3) In a jurisdiction exempt from the requirements of title 68, chapter 120, pursuant to § 68-120-101, where the exempt jurisdiction does not require a permit to repair, replace and install HVAC units containing copper evaporator coils or condensers, a company holding a current business tax license, with a Class 4 classification, or a current sales tax identification number indicating the business as that of an HVAC installer or repairer;
In a jurisdiction not exempt from the requirements of title 68, chapter 120, a company holding a current business tax license, with a Class 4 classification, or a current sales tax identification number indicating the business as that of an HVAC installer or repairer.
The person offering the air conditioner evaporator coil or condenser for sale as scrap shall have in the person's possession documentation that the company for whom it is being sold is a company described in subsection (b), and that the person selling the evaporator coil or condenser is an authorized agent, representative or employee of that company.
Payment for scrap metal described in subsection (a) must be made by check or money order, mailed to the business address of the company for whom the metal is being sold and the name of the company must be the payee on the check. T.C.A. 62-9-107
Can a scrap metal dealer purchase beer kegs?
No scrap metal dealer shall knowingly purchase or possess a metal beer keg, whether damaged or undamaged, or any reasonably recognizable part of a metal beer keg, on any premises that the dealer uses to buy, sell, store, shred, melt, cut or otherwise alter scrap metal. T.C.A. 62-9-108