2013 -- H 5513

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LC00846

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

PURCHASE AND SALE OF PRECIOUS METALS AND SCRAP METALS

     Introduced By: Representatives Carnevale, and Williams

     Date Introduced: February 14, 2013

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Legislative findings. -- The general assembly finds as follows:

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      (a) Theft of public and private property containing metals such as aluminum, brass,

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bronze, copper, iron, and steel has become more prevalent as the international demand and prices

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for scrap metal have increased; and

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      (b) Reports from the Providence department of public works indicate that over 200

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manhole covers are "missing" to date in 2012, and police department records show that

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approximately one hundred ninety (190) burglaries in 2011 involved theft of copper; and

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      (c) The center for problem-oriented policing, a nationally-recognized nonprofit

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organization funded through the department of justice, stated in a 2010 report that "stealing

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valuable metal has become a serious concern for the police, businesses, public utilities, railroad

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companies, and the community at large" and places a significant financial burden on

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municipalities, utility companies, and individual property owners to replace stolen items; and

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      (d) The purchasing and selling of stolen metals poses a substantial threat to private and

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public property, as well as a substantial and unreasonable interference to public health, public

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safety, public peace, public comfort and public convenience; and

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      (e) It is hereby the intention of the general assembly to preserve the health, safety and

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welfare of the citizens of the state.

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     SECTION 2. Sections 6-11.1-1, 6-11.1-2, 6-11.1-4 and 6-11.1-5 of the General Laws in

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Chapter 6-11.1 entitled "Purchase and Sale of Precious Metals" are hereby amended to read as

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follows:

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     6-11.1-1. License required -- "Person" defined. -- (a) (1) No person, including a

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pawnbroker, consignment shop, or salvage yard operator or second hand dealer, as defined in

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section 5-21-1, shall engage in the business of buying or receiving for the purpose of selling gold,

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silver, platinum group metals, or precious stones, or any articles containing those items, including

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catalytic converters other than coins purchased for their numismatic value rather than their metal

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content, referred to in this chapter as "precious metals," from the general public for the purpose of

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reselling the precious metals in any condition without first obtaining a license from the attorney

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general of the state of Rhode Island, also called "the attorney general" in this chapter. The

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attorney general shall not issue any license to a person who has not registered a permanent place

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of business within the state for the purchase or sale of precious metals. The criteria for

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determining a person's permanent place of business shall be formulated by the attorney general

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immediately on or after July 1, 1981. Provided, that effective July 1, 2013, the licenses provided

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by this chapter shall be issued by the Rhode Island department of business regulation. Also

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effective July 1, 2013, all powers, functions, and duties of the attorney general in regard to the

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issuance of licenses under this chapter shall be transferred to the department of business

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regulation. Any reference in this chapter to the attorney general in regard to the issuance of

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licenses pursuant to this chapter on and after July 1, 2013, shall be construed to mean the

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department of business regulation.

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     (2) No person shall engage in the business of purchasing, selling, bartering or dealing in

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junk, old metals or secondhand articles, or of receiving the same for the purpose of melting the

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same or of converting the same into castings, unless such person shall be duly licensed by the

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department of business regulation.

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      (b) The word "person," when used in this chapter, shall include individuals, partnerships,

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associations, and corporations.

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      (c) This chapter shall not apply to any financial institution which is covered by federal or

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state deposit insurance, nor to jewelry and silverware manufacturers purchasing precious metals

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directly from trade suppliers.

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      (d) The word "catalytic converter" when used in this chapter shall be defined as an air

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pollution abatement device that removes pollutants from motor vehicle exhaust, either by

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oxidizing them into carbon dioxide and water or reducing them to nitrogen.

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      (e) The word "public property" when used in this chapter shall be defined as property

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owned and maintained by a municipality, the state, the United States, or any quasi-governmental

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entity, and shall include, but not be limited to, items associated with public streets and sidewalks,

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as follows:

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     (1) Manhole covers, or other types of utility access covers including, but not limited to,

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water line maintenance covers;

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     (2) Highway and street signs;

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     (3) Street light poles and fixtures;

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     (4) Guardrails for bridges, highways, and roads;

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     (5) Historical, commemorative, and memorial markers and plaques, including, but not

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limited to, WPA (Works Progress Administration) plaques; and

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     (6) Traffic directional and control signs and light signals.

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     6-11.1-2. Application for license - Annual fee - Attorney general to promulgate rules

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and regulations. -- Application for license – Annual fee – department of business regulation

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to promulgate rules and regulations. --

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     (a) Applications for the license shall be in writing, under oath, and in the form prescribed

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by the attorney general or, if on or after July 1, 2013, the department of business regulation. Said

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application shall be filed with the department and shall contain:

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     (1) the The full name and the address (both of the residence and place of business) of the

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applicant, social security number, and if the applicant is a partnership or association, of every

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member, and if a corporation, of each officer and director and of the principal owner or owners of

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the issued and outstanding capital stock;

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     (2) also the The city or town with the street and number where the business is to be

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conducted: ,and any further information that the attorney general may require.

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     (3) A radius map and property owner list identifying owners of property within a two-

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hundred-foot radius of the business as appears on the most current property tax list certified by

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the tax assessor of the appropriate municipality; and

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     (4) An application fee of one hundred dollars ($100.00), plus the costs of advertising,

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posting, mailing, and records checks required or requested pursuant to this chapter.

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     (b) After receipt of an application for a license, the attorney general department shall

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conduct an investigation to determine whether the facts presented in the application are true. The

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attorney general department may also request a record search and a report from the national

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crime and information center (NCIC) of the federal bureau of investigation. If the application

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discloses that the applicant has a disqualifying criminal record, or if the investigation indicates

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that any of the facts presented in the application are not true, or if the records of the department of

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the attorney general indicate criminal activity on the part of the person signing the application and

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any other persons named in the application, or if the NCIC report indicates an outstanding

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warrant for the person signing the application and any other persons named in the application,

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then the attorney general department of business regulation may initiate a nationwide criminal

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records check by the federal bureau of investigation regarding the person signing the application

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and any other persons named in the application, in accordance with any applicable federal

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standards regarding a criminal records check. The applicant at the time of making his or her

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initial application only shall pay to the attorney general the sum of fifty dollars ($50.00) as a fee

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for investigating the application and the additional sum of fifty dollars ($50.00) shall be paid

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annually.

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     (c) The annual fee for license renewals shall be one hundred dollars ($100.00), except

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for applicants seeking to receive old metals for purposes of melting the same, or converting the

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same into castings, for which the fee shall be five dollars ($5.00).

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     (d) Licenses shall not be assignable or transferable to any other person or entity. The

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attorney general department is authorized to promulgate rules and regulations not inconsistent

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with this chapter to provide for the effective discharge of the responsibilities granted by this

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chapter.

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     6-11.1-4. Record of transactions required -- Reports to police. -- (a) Every person

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licensed under this chapter for the purposes of purchasing, selling, bartering, or dealing in old

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metals, shall keep a copy of the report form obtained from or under the direction of the attorney

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general, department of business regulation containing a comprehensive record of all transactions

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concerning precious metals including catalytic converters. The comprehensive record shall be

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hand printed legibly or typed. The record shall include the name, address, telephone number and

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date of birth of the seller, a photocopy or digital image of the person's photo identification, the

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license plate number of the vehicle used to transport the property, a complete and accurate

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description of the property purchased or sold including any serial numbers or other identifying

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marks or symbols, the price paid for the old or used metals, and the date and hour of the

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transaction.

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      (b) All persons licensed under this chapter shall deliver or mail weekly to the chief of

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police of the city or town in which the business is located and to the attorney general copies of all

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report forms from the preceding seven-day period. Further, the licensee shall, upon request, send

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any additional records created pursuant to this section to the chief of police.

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      (c) Every person licensed under this chapter shall retain a copy of the report form for a

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period of one year two (2) years from the date of the sale stated on the form. Nothing in this

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section shall be construed as to relieve any license holder of any other record retention

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requirements required by law.

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     (d) Provided, that the provisions of this section shall not apply to the purchase of old

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metals from a person who is licensed to engage in the business of purchasing, selling, bartering or

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dealing in junk, old metals or secondhand articles, and who has previously recorded the contents

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of the load, pursuant to this section. and such person provides a written statement affirming such

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record at the time of the transaction.

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     6-11.1-5. Fourteen day holding period -- Recovery of stolen property -- Return to

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rightful owner. -- (a) All persons licensed under this chapter shall retain in their possession in an

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unaltered condition for a period of fourteen (14) days all precious metals or articles made from or

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containing a precious metal including catalytic converters except items of bullion, including

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coins, bars, and medallions, which do not contain serial numbers or other identifying marks., and

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shall immediately notify the chief of the police department of the following property purchased or

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received consisting of aluminum, brass, bronze, copper, cast iron, stainless steel, and/or wrought

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iron:

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     (1) Statues and sculptures;

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     (2) Weather vanes;

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     (3) Downspouts;

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     (4) Handrails;

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     (5) Decorative fencing (wrought iron only);

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     (6) Grave markers, sculptures, plaques and vases, the appearance of which suggest that

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the articles have been obtained from a cemetery;

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     (7) Beer kegs; and

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     (8) Public property as defined in section 6-11.1-1(e).

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     Every person licensed pursuant to this chapter shall keep for a period of three (3) days,

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old metals not included in subsection (a) herein, purchased or received in a single transaction.

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     (b) The fourteen (14) day holding period shall commence with the date the report of its

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acquisition was delivered to or received through the mails by the chief of police or the attorney

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general, whichever is later. The records so received by the chief of police and the attorney general

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shall be available for inspection only by law enforcement officers for law enforcement purposes.

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If the chief of police has probable cause that precious metals or an article made from or

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containing a precious metal has been stolen, he or she may give notice, in writing, to the person

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licensed, to retain the metal or article for an additional period of fifteen (15) days, and the person

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shall retain the property for this additional fifteen (15) day period, unless the notice is recalled, in

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writing, within the fifteen (15) day period; within the fifteen (15) day period the chief of police,

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or his or her designee, shall designate, in writing, an officer to secure the property alleged to be

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stolen and the persons in possession of the property shall deliver the property to the officer upon

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display of the officer's written designation by the chief of police or his or her designee. Upon

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receipt of the property from the officer, the clerk or person in charge of the storage of alleged

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stolen property for a police department shall enter into a book a description of every article of

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property alleged to be stolen which was brought to the police department and shall attach a

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number to each article. The clerk or person in charge of the storage of alleged stolen property

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shall deliver the property to the owner of the property upon satisfactory proof of ownership,

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without any cost to the owner, provided that the following steps are followed:

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      (1) A complete photographic record of the property is made;

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      (2) A signed declaration of ownership under penalty of perjury is obtained from the

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person to whom the property is delivered;

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      (3) The person from whom the custody of the property was taken is served with written

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notice of the claim of ownership and is given ten (10) days from the mailing of the notice to file a

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petition in district court objecting to the delivery of the property to the person claiming

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ownership. If a petition is filed in a timely manner, the district court shall at a hearing determine

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by a preponderance of the evidence that the property was stolen and that the person claiming

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ownership of the property is the true owner. The decision of the district court may only be

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appealable by writ of certiorari to the supreme court.

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      (b)(c) The clerk or person in charge of the storage of alleged stolen property shall not be

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liable for damages for any official act performed in good faith in the course of carrying out the

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provisions of this section. The photographic record of the alleged stolen property shall be allowed

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to be introduced as evidence in any court of this state in place of the actual alleged stolen

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property; provided that the clerk in charge of the storage of the alleged stolen property shall take

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photographs of the property, and those photographs shall be tagged and marked and remain in his

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possession or control.

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     (d) Items purchased or sold under this section shall have no holding period and shall be

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exempt from this section if they are not included in subsection (a) of this section; and

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     (1) The transaction is for loads weighing five hundred (500) pounds or more in weight;

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or

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     (2) The load is purchased from a municipality or governmental entity under contract with

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a licensee; or

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     (3) A photo identification system for transactions is utilized. For purposes of this section

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a photo identification system shall be defined as a system that is designed to capture digital

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images of each transaction, including the items contained in the transaction, the vehicle used to

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transport the items and the vehicle license plate information. The record of each image shall also

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be designed to link to or contain the documentation required in this chapter.

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     SECTION 3. Chapter 6-11.1 of the General Laws entitled "Purchase and Sale of Precious

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Metals" is hereby amended by adding thereto the following sections:

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     6-11.1-3.1. Receipt of public property prohibited. -- A licensee shall not accept any

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public property as defined in subsection 6-11.1-1(e) unless a certificate of release from a

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governmental entity is provided at the time of transaction. The certificate shall list the exact

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description and quantity of items, and the location from which the items were removed, and shall

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include the seal of the governmental entity and the signature of a duly authorized governmental

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official. The certificate shall be kept with the items identified therein for a period of fourteen (14)

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days. A licensee shall immediately notify the police department of any individual attempting to

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sell public property without authorization from a governmental entity.

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     6-11.1-15. Acquisition of public property. -- (a) A licensee shall not accept any public

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property as defined in subsection 6-11.1-1(e) unless a certificate of release from a governmental

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entity is provided at the time of transaction. The certificate shall list the exact description and

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quantity of items, and the location from which the items were removed, and shall include the seal

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of the governmental entity and the signature of a duly authorized governmental official. The

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certificate shall be kept with the items identified therein for a period of ten (10) days. A licensee

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shall immediately notify the police department of any individual attempting to sell public

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property without authorization from a governmental entity.

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      (b) A licensee in violation of the provisions of this section shall be cited by the police

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department, be subject to a fine of up to five hundred dollars ($500), and shall be required to

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appear for a show cause hearing before the department of business regulation. Upon finding a

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violation has occurred, the department shall impose a ninety (90) day suspension of license.

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     SECTION 4. This act shall take effect on July 1, 2013.

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LC00846

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

PURCHASE AND SALE OF PRECIOUS METALS AND SCRAP METALS

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     This act would prohibit the purchase of public property by precious metals dealers; would

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require additional forms of identification and would require notice to the police upon the sale of

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certain types of property. The act would provide that effective July 1, 2013, the authority for

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issuing licenses under this section would be transferred to the department of business regulation.

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     This act would take effect on July 1, 2013.

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LC00846

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