80R3973 YDB-D

By: West, Royce S.B. No. 642

A BILL TO BE ENTITLED

AN ACT

relating to registration and regulation of secondhand metal dealers and metal recycling entities; providing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Chapter 1956, Occupations Code, is amended to read as follows:

CHAPTER 1956. SECONDHAND [SALES TO] METAL DEALERS AND

METAL RECYCLING ENTITIES

SECTION 2. Chapter 1956, Occupations Code, is amended by amending Subchapter A and adding Subchapters A-1, A-2, and A-3 to read as follows:

SUBCHAPTER A. GENERAL PROVISIONS [SALE OF ALUMINUM, BRONZE, OR

COPPER OR BRASS MATERIAL TO SECONDHAND METAL DEALERS]

Sec. 1956.001. DEFINITIONS. In this chapter [subchapter]:

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

(2) "Bronze material" means:

(A) a cemetery vase, receptacle, or memorial made from bronze;

(B) bronze statuary; or

(C) material readily identifiable as bronze.

(3) "Commission" means the Public Safety Commission.

(4) "Director" means the public safety director.

(5) "Copper or brass material" means:

(A) insulated or noninsulated copper wire or cable of the type used by a public utility or common carrier that consists of at least 50 percent copper; or

(B) a copper or brass item of a type commonly used in construction or by a public utility.

(6) [(4)] "Department" means the Texas Department of Public Safety.

(7) "Metal recycling entity" means a business that is predominantly engaged in:

(A) performing the manufacturing process by which scrap, used, or obsolete ferrous or nonferrous metal is converted into raw material products consisting of prepared grades and having an existing or potential economic value, by a method other than the exclusive use of hand tools, including processing, sorting, cutting, classifying, cleaning, baling, wrapping, shredding, shearing, or changing the physical form of that metal; or

(B) the use of raw material products described under Paragraph (A) in the manufacture of producer or consumer goods.

(8) [(5)] "Personal identification document" means:

(A) a driver's license;

(B) a military identification card;

(C) a passport issued by the United States or by another country and recognized by the United States; or

(D) a personal identification certificate issued by the department under Section 521.101, Transportation Code, or a corresponding card or certificate issued by another state.

(9) [(6)] "Regulated material" means:

(A) aluminum material;

(B) bronze material; [or]

(C) copper or brass material; or

(D) regulated metal.

(10) "Regulated metal" means metal items regulated under this chapter in accordance with department rules, including:

(A) manhole covers;

(B) guardrails;

(C) compressed cylinders;

(D) beer kegs made from metal other than aluminum;

(E) historical markers or cemetery vases, receptacles, or memorials made from metal other than aluminum;

(F) unused rebar;

(G) street signs;

(H) drain gates;

(I) safes;

(J) communication, transmission, and service wire or cable;

(K) condensing or evaporator coils for heating or air conditioning units;

(L) electric light poles, including the fixtures and hardware;

(M) stainless steel containers designed to hold propane for fueling forklifts; and

(N) metal railroad equipment, including tie plates, switch plates, e-clips, and rail tie functions.

(11) [(7)] "Secondhand metal dealer" means:

(A) an auto wrecker, a scrap metal processor, or another person or organization that purchases, collects, or solicits regulated material; or

(B) a person who operates or maintains a scrap metal yard or other place in which scrap metal or cast-off regulated material is collected or kept for shipment, sale, or transfer.

Sec. 1956.002. EXCEPTION. This chapter [subchapter] does not apply to a purchase of regulated material from a manufacturing, industrial, or other commercial vendor that sells regulated material in the ordinary course of the vendor's business. [Sections 1956.003-1956.010 reserved for expansion] SUBCHAPTER A-1. POWERS AND DUTIES

Sec. 1956.011. ADMINISTRATION OF CHAPTER. The department shall administer this chapter.

Sec. 1956.012. DEPARTMENT STAFF. The department may employ administrative and clerical staff as necessary to carry out this chapter.

Sec. 1956.013. RULES. The commission shall adopt rules as necessary to administer this chapter, including rules:

(1) establishing minimum requirements for:

(A) registration under this chapter; and

(B) suspending, denying, or revoking a certificate of registration; and

(2) adopting forms required by this chapter.

Sec. 1956.014. FEES. The commission by rule shall prescribe fees in reasonable amounts sufficient to cover the costs of administering this chapter, including fees for:

(1) an initial application for a certificate of registration;

(2) issuance of a certificate of registration;

(3) issuance of a renewal certificate of registration; and

(4) issuance of a duplicate certificate of registration or duplicate renewal certificate of registration.

Sec. 1956.015. RULES REGARDING ADVERTISING OR COMPETITIVE BIDDING. (a) The commission may not adopt rules restricting advertising or competitive bidding by a registrant except to prohibit false, misleading, or deceptive practices.

(b) In rules to prohibit false, misleading, or deceptive practices, the commission may not include a rule that:

(1) restricts the use of any medium for advertising;

(2) restricts the use of a registrant's personal appearance or voice in an advertisement;

(3) relates to the size or duration of an advertisement by the registrant; or

(4) restricts the registrant's advertisement under a trade name.

Sec. 1956.016. STATEWIDE REPORTING SYSTEM. (a) The department shall establish a statewide reporting system to track the sales of regulated metal reported to the department under Section 1956.036.

(b) The department shall post a summary of the reports provided to the department under Section 1956.036 on the department's Internet website. The summary must include by county or region the frequency with which a person presents regulated materials for sale to a secondhand metal dealer or metal recycling entity.

(c) Subsection (b) does not apply to 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. [Sections 1956.017-1956.020 reserved for expansion] SUBCHAPTER A-2. CERTIFICATE OF REGISTRATION

Sec. 1956.021. REGISTRATION REQUIRED. (a) A person may not act as a secondhand metal dealer or represent to the public that the person is a secondhand metal dealer unless the person is registered under this chapter.

(b) A person may not act as a metal recycling entity or represent to the public that the person is a metal recycling entity unless the person is registered under this chapter.

Sec. 1956.022. ISSUANCE OF CERTIFICATE; QUALIFICATIONS. (a) The department shall issue a certificate of registration to an applicant who:

(1) applies and pays a registration fee; and

(2) presents any relevant evidence relating to the applicant's qualifications as required by commission rule.

(b) The commission by rule may establish qualifications for the holder of a certificate of registration under this chapter.

Sec. 1956.023. TERM OF CERTIFICATE. (a) A certificate of registration is valid for two years after the date of issuance.

(b) The department shall adopt a system under which certificates of registration expire and are renewed on various dates.

(c) Not later than the 30th day before the date a person's certificate of registration is scheduled to expire, the department shall send written notice of the impending expiration to the person at the person's last known address according to the records of the department.

(d) A person whose certificate of registration has expired may not make a representation for which a certificate of registration is required under Section 1956.021 or perform collections services until the certificate has been renewed.

Sec. 1956.024. RENEWAL OF CERTIFICATE. (a) To renew a certificate of registration, a person must submit an application for renewal in the manner prescribed by the department.

(b) A person who is otherwise eligible to renew a certificate of registration may renew an unexpired certificate by paying the required renewal fee to the department before the expiration date of the certificate.

(c) A person whose certificate of registration has been expired for 90 days or less may renew the certificate by paying to the department a renewal fee that is equal to 1-1/2 times the normally required renewal fee.

(d) A person whose certificate of registration has been expired for more than 90 days but less than one year may renew the certificate by paying to the department a renewal fee that is equal to two times the normally required renewal fee.

(e) A person whose certificate of registration has been expired for one year or more may not renew the certificate. The person may obtain a new certificate of registration by complying with the requirements and procedures, including the examination requirements, for an original certificate. [Sections 1956.025-1956.030 reserved for expansion] SUBCHAPTER A-3. PRACTICE BY CERTIFICATE HOLDERS

Sec. 1956.031 [1956.003]. NOTICE TO SELLERS. (a) A secondhand metal dealer or metal recycling entity shall at all times maintain in a prominent place in the dealer's or entity's place of business, in open view to a seller of regulated material, a notice in two-inch lettering that:

(1) includes the following language:

"A PERSON ATTEMPTING TO SELL ANY REGULATED MATERIAL MUST PRESENT SUFFICIENT IDENTIFICATION AND 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 SECONDHAND METAL DEALER OR METAL RECYCLING ENTITY WHILE ATTEMPTING TO SELL ANY REGULATED MATERIAL."; and

(2) states the secondhand metal dealer's or metal recycling facility's usual business hours.

(b) The notice required by this section may be contained on a sign that contains another notice if the secondhand metal dealer or metal recycling entity is required to display another notice under applicable law.

Sec. 1956.032 [1956.004]. INFORMATION PROVIDED BY SELLER. (a) A person attempting to sell regulated material to a secondhand metal dealer or metal recycling entity shall:

(1) display to the secondhand metal dealer or metal recycling entity the person's personal identification document or sign a statement that the person does not possess such a document; and

(2) either:

(A) present proof that the person is the legal owner or is lawfully entitled to sell the regulated material; or

(B) sign a written statement provided by the secondhand metal dealer or metal recycling entity that the person is the legal owner of or is lawfully entitled to sell the regulated material offered for sale.

(b) A person required by a municipality to prepare a signed statement consisting of the information required by Subsection (a)(1) or (2) may use the statement required by the municipality to comply with Subsection (a)(1) or (2).

(c) The secondhand metal dealer or metal recycling entity or the dealer's or entity's agent shall visually verify the accuracy of the identification presented by the seller at the time of the purchase of regulated material.

Sec. 1956.033 [1956.005]. RECORD OF PURCHASE. (a) Each [A] secondhand metal dealer and metal recycling entity in this state shall keep an accurate and legible written record of each purchase made in the course of the dealer's or entity's business from an individual of:

(1) copper or brass material in excess of 50 pounds;

(2) bronze material; [or]

(3) aluminum material in excess of 40 pounds; or

(4) regulated metal.

(b) The record must be in English and include:

(1) the place and date of the purchase;

(2) the name and address of each individual from whom the regulated material is purchased or obtained;

(3) the identifying number of the seller's personal identification document;

(4) a description made in accordance with the custom of the trade of the type and quantity of regulated material purchased; and

(5) the statement required by Section 1956.032(a)(2) [1956.004(a)(2)].

Sec. 1956.034 [1956.006]. PRESERVATION OF RECORDS. A secondhand metal dealer or metal recycling entity shall preserve each record required by Section 1956.033 [1956.005] until the third anniversary of the date the record was made.

Sec. 1956.035 [1956.007]. INSPECTION OF RECORDS BY PEACE OFFICER. (a) On request, a secondhand metal dealer or metal recycling entity shall permit a peace officer of this state to inspect, during the dealer's or entity's usual business hours:

(1) a record required by Section 1956.033 [1956.005]; or

(2) regulated material in the dealer's or entity's possession.

(b) The inspecting officer shall inform the dealer or entity of the officer's status as a peace officer.

Sec. 1956.036 [1956.008]. FURNISHING OF REPORT TO DEPARTMENT. (a) Except as provided by Subsection (b), not later than the seventh day after the date of the purchase or other acquisition of material for which a record is required under Section 1956.033 [1956.005], a secondhand metal dealer or metal recycling entity shall mail to or file with the department a report containing the information required to be recorded under that section.

(b) If a secondhand metal dealer or metal recycling entity purchases bronze material that is a cemetery vase, receptacle, memorial, or statuary or a pipe that can reasonably be identified as aluminum irrigation pipe, the dealer or entity shall:

(1) not later than the close of business on the dealer's or entity's first working day after the purchase date, orally notify the department; and

(2) not later than the fifth day after the purchase date, mail to or file with the department a report containing the information required to be recorded under Section 1956.033 [1956.005].

(c) Subsection (b) does not apply to a purchase from:

(1) the manufacturer or fabricator of the material or pipe;

(2) a seller bearing a bill of sale for the material or pipe; or

(3) the owner of the material or pipe.

Sec. 1956.037 [1956.009]. PLACEMENT OF ITEMS ON HOLD. (a) A secondhand metal dealer or metal recycling entity may not dispose of, process, sell, or remove from the premises an item of regulated metal unless the dealer or entity acquired the item more than 72 hours before the disposal, processing, sale, or removal.

(b) A peace officer who has reasonable suspicion to believe that an item of regulated material in the possession of a secondhand metal dealer or metal recycling entity is stolen may place the item on hold by issuing to the dealer or entity a written notice that:

(1) specifically identifies the item alleged to be stolen and subject to the hold; and

(2) informs the dealer or entity of the requirements of Subsection (c) [(b)].

(c) [(b)] On receiving the notice, the dealer or entity may not process or remove from the dealer's or entity's premises the identified item before the 60th [11th] day after the date the notice is issued unless the hold is released at an earlier time in writing by a peace officer of this state or a court order.

(d) [(c)] After the holding period expires, the dealer or entity may dispose of the item unless disposition violates a court order.

Sec. 1956.038 [1956.010]. PROHIBITED ACTS. A person may not, with the intent to deceive:

(1) display to a secondhand metal dealer or metal recycling entity a false or invalid personal identification document in connection with the person's attempted sale of regulated material; or

(2) make a false, material statement or representation to a secondhand metal dealer or metal recycling entity in connection with:

(A) that person's execution of a written statement required by Section 1956.032(a)(1) or (2) [1956.004(a)(1) or (2)]; or

(B) the dealer's or entity's efforts to obtain the information required under Section 1956.033(b) [1956.005(b)].

Sec. 1956.039. HOURS OF OPERATION. A secondhand metal dealer or metal recycling facility may not operate:

(1) more than 15 consecutive hours in one day; or

(2) later than 9 p.m.

Sec. 1956.0395 [1956.011]. CRIMINAL PENALTY. (a) A person commits an offense if the person knowingly violates this subchapter or Subchapter A-2.

(b) Except as provided by Subsection (c), an offense under this section is a Class B misdemeanor.

(c) An offense under this section is a Class A misdemeanor if the person has been convicted of a violation of this subchapter within the 36 months preceding the date of the offense.

(d) On the conviction of a secondhand metal dealer or metal recycling entity for an offense punishable under Subsection (c), a court, in addition to imposing any other applicable penalty, may order that the dealer or entity cease doing business as a secondhand metal dealer or metal recycling entity for a period not to exceed 30 days from the date of the order for each violation that forms the basis of the conviction.

SECTION 3. Chapter 1956, Occupations Code, is amended by adding Subchapters D, E, and F to read as follows: SUBCHAPTER D. DISCIPLINARY PROCEDURES

Sec. 1956.151. DENIAL OF CERTIFICATE; DISCIPLINARY ACTION. The department shall deny an application for a certificate of registration, suspend or revoke a certificate of registration, or reprimand a person who is registered under this chapter if the person:

(1) obtains a certificate of registration by means of fraud, misrepresentation, or concealment of a material fact;

(2) sells, barters, or offers to sell or barter a certificate of registration;

(3) violates a rule adopted under this chapter; or

(4) violates Section 1956.021.

Sec. 1956.152. INVESTIGATION. The department shall investigate:

(1) a person who engages in a practice that violates this chapter; and

(2) each complaint filed with the department against a person registered under this chapter.

Sec. 1956.153. HEARING. (a) 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.

(b) A hearing is governed by department rules for a contested hearing and by Chapter 2001, Government Code.

Sec. 1956.154. EMERGENCY SUSPENSION. (a) The department shall temporarily suspend the certificate of registration of a certificate holder if the department determines from the evidence or information presented to it that continued practice by the certificate holder would constitute a continuing and imminent threat to the public welfare.

(b) A certificate of registration may be suspended under this section without notice or hearing on the complaint if:

(1) action is taken to initiate proceedings for a hearing before the State Office of Administrative Hearings simultaneously with the temporary suspension; and

(2) a hearing is held as soon as practicable under this chapter and Chapter 2001, Government Code.

(c) The State Office of Administrative Hearings shall hold a preliminary hearing not later than the 14th day after the date of the temporary suspension to determine if there is probable cause to believe that a continuing and imminent threat to the public welfare still exists. A final hearing on the matter shall be held not later than the 61st day after the date of the temporary suspension. [Sections 1956.155-1956.200 reserved for expansion] SUBCHAPTER E. ADMINISTRATIVE PENALTY

Sec. 1956.201. IMPOSITION OF PENALTY. The department may assess an administrative penalty against a person who violates this chapter or a rule adopted under this chapter.

Sec. 1956.202. AMOUNT OF PENALTY. (a) The amount of the administrative penalty may not exceed $1,000 for each violation. Each day of a continuing violation is a separate violation.

(b) The amount shall be based on:

(1) the seriousness of the violation;

(2) the history of previous violations;

(3) the amount necessary to deter a future violation;

(4) efforts made to correct the violation; and

(5) any other matter that justice requires.

Sec. 1956.203. NOTICE OF VIOLATION AND PENALTY. If, after investigation of a possible violation and the facts surrounding the possible violation, the department determines that a violation occurred, the department shall give written notice of the violation to the person alleged to have committed the violation. The notice must:

(1) include a brief summary of the alleged violation;

(2) state the amount of the proposed administrative penalty based on the factors set forth in Section 1956.202(b); and

(3) inform the person of the person's right to a hearing on the occurrence of the violation, the amount of the penalty, or both.

Sec. 1956.204. PENALTY TO BE PAID OR HEARING REQUESTED. (a) Not later than the 20th day after the date the person receives the notice, the person may:

(1) accept the department's determination and proposed administrative penalty; or

(2) make a written request for a hearing on that determination.

(b) If the person accepts the department's determination, the director or the director's designee by order shall approve the determination and assess the proposed penalty.

Sec. 1956.205. HEARING. (a) If the person requests a hearing in a timely manner, the department shall:

(1) set a hearing;

(2) give written notice of the hearing to the person; and

(3) designate a hearings examiner to conduct the hearing.

(b) The hearings examiner shall:

(1) make findings of fact and conclusions of law; and

(2) promptly issue to the director or the director's designee a proposal for decision as to the occurrence of the violation and the amount of any proposed administrative penalty.

Sec. 1956.206. DECISION. (a) Based on the findings of fact, conclusions of law, and proposal for decision, the director or the director's designee by order may determine that:

(1) a violation occurred and assess an administrative penalty; or

(2) a violation did not occur.

(b) The department shall give notice of the order to the person. The notice must include:

(1) separate statements of the findings of fact and conclusions of law;

(2) the amount of any penalty assessed; and

(3) a statement of the person's right to judicial review of the order.

Sec. 1956.207. OPTIONS FOLLOWING DECISION: PAY OR APPEAL. (a) Not later than the 30th day after the date the order becomes final, the person shall:

(1) pay the administrative penalty;

(2) pay the penalty and file a petition for judicial review contesting the fact of the violation, the amount of the penalty, or both; or

(3) without paying the penalty, file a petition for judicial review contesting the fact of the violation, the amount of the penalty, or both.

(b) Not later than the 30th day after the date the order is final, a person who acts under Subsection (a)(3) may:

(1) stay enforcement of the penalty by:

(A) paying the penalty to the court for placement in an escrow account; or

(B) giving to the court a supersedeas bond approved by the court that:

(i) is for the amount of the penalty; and

(ii) is effective until judicial review of the order is final; or

(2) request the court to stay enforcement of the penalty by:

(A) filing with the court a sworn affidavit of the person stating that the person is financially unable to pay the penalty and is financially unable to give the supersedeas bond; and

(B) giving a copy of the affidavit to the department by certified mail.

(c) If the department receives a copy of an affidavit under Subsection (b)(2), the department may file with the court, not later than the fifth day after the date the department receives the copy, a contest to the affidavit.

(d) The court shall hold a hearing on the facts alleged in the affidavit as soon as practicable and shall stay enforcement of the penalty on finding that the alleged facts are true. The person who files an affidavit has the burden of proving that the person is financially unable to pay the amount of the penalty and to give a supersedeas bond.

Sec. 1956.208. DETERMINATION BY COURT. (a) If the court sustains the occurrence of the violation, the court may uphold or reduce the amount of the administrative penalty and order the person to pay the full or reduced penalty.

(b) If the court does not sustain the occurrence of the violation, the court shall order that a penalty is not owed.

Sec. 1956.209. REMITTANCE OF PENALTY AND INTEREST. (a) If after judicial review, the administrative penalty is reduced or not imposed by the court, the court shall, after the judgment becomes final:

(1) order that the appropriate amount, plus accrued interest, be remitted to the person if the person paid the amount of the penalty; or

(2) order the release of the bond in full if the penalty is not imposed or order the release of the bond after the person pays the penalty imposed if the person posted a supersedeas bond.

(b) The interest paid under Subsection (a)(1) is the rate charged on loans to depository institutions by the New York Federal Reserve Bank. The interest shall be paid for the period beginning on the date the penalty is paid and ending on the date the penalty is remitted.

Sec. 1956.210. COLLECTION OF PENALTY. (a) In this section, "reasonable expenses and costs" includes expenses incurred by the department and the attorney general in the investigation, initiation, or prosecution of an action, including reasonable investigative costs, court costs, attorney's fees, witness fees, and deposition expenses.

(b) If the person does not pay the amount of the administrative penalty and the enforcement of the penalty is not stayed, the department may refer the matter to the attorney general for collection of the amount of the penalty.

(c) The department may assess reasonable expenses and costs against a person in an administrative hearing if, as a result of the hearing, an administrative penalty is assessed against the person. The person shall pay expenses and costs assessed under this subsection not later than the 30th day after the date the order of the director or the director's designee requiring the payment of expenses and costs is final. The department may refer the matter to the attorney general for collection of expenses and costs.

(d) If the attorney general brings an action against a person to enforce an administrative penalty assessed under this chapter and the person is found liable for an administrative penalty, the attorney general may recover, on behalf of the attorney general and the department, reasonable expenses and costs.

Sec. 1956.211. ADMINISTRATIVE PROCEDURE. A proceeding for the assessment of an administrative penalty under this subchapter is subject to Chapter 2001, Government Code. [Sections 1956.212-1956.250 reserved for expansion] SUBCHAPTER F. OTHER PENALTIES AND ENFORCEMENT PROVISIONS

Sec. 1956.251. ENFORCEMENT PROCEEDINGS; INJUNCTION. (a) The department, the attorney general, or the district or county attorney for the county in which an alleged violation of this chapter occurs shall, on receipt of a verified complaint, bring an appropriate administrative or judicial proceeding to enforce this chapter or a rule adopted under this chapter.

(b) The attorney general or an attorney representing the state may initiate an action for an injunction to prohibit a person from violating this chapter or a rule adopted under this chapter.

Sec. 1956.252. CIVIL PENALTY. In addition to any other remedy provided by law, including injunctive relief, a court may impose a civil penalty for a violation of this chapter or a rule adopted under this chapter.

SECTION 4. (a) Not later than January 1, 2008, the Public Safety Commission shall adopt the rules necessary to implement the changes in law made by this Act to Chapter 1956, Occupations Code.

(b) Not later than September 1, 2008, the Department of Public Safety shall establish the statewide reporting system to track the sales of regulated metal as required under Chapter 1956, Occupations Code, as amended by this Act.

SECTION 5. Notwithstanding Section 1956.021, Occupations Code, as added by this Act, a person is not required to hold a certificate of registration as a secondhand metal dealer or metal recycling entity under Chapter 1956, Occupations Code, as amended by this Act, before September 1, 2008.

SECTION 6. The change in law made by this Act applies only to an offense committed on or after the effective date of this Act. An offense committed before that date is governed by the law in effect when the offense was committed, and the former law is continued in effect for that purpose. For purposes of this section, an offense was committed before the effective date of this Act if any element of the offense was committed before that date.

SECTION 7. (a) Except as provided by Subsection (b) of this section, this Act takes effect September 1, 2007.

(b) Section 1956.0395, Occupations Code, as added by this Act, and Subchapters D, E, and F, Occupations Code, as added by this Act, take effect September 1, 2008.