Occupation Code Chapter 1956, Catalytic Converter Reporting Requirements Statute Changes Effective January 5, 2023
January 10, 2023
House Bill 4110, 87th Legislative Session, amended the Metals Recycling Entities Act (Occupations Code, Chapter 1956) requiring that a person attempting to sell a catalytic converter to a metal recycling entity provide identifying information on the source vehicle, as well as proof of ownership of the vehicle. However, the statute exempts the purchase of regulated material (including catalytic converters) from businesses that sell regulated materials "in the ordinary course of business" (Occupations Code, §1956.002). Several types of businesses, such as salvage vehicle dealers or repair facilities, acquire and sell used catalytic converters as a standard part of their business and would appear to be operating within the scope of the statutory exemption. The following rule provides guidance as to the department's interpretation of the exemption by outlining several categories of businesses generally recognized as engaging in the sale of used catalytic converters in the ordinary course of their business. This rule was effective on January 5, 2023.
Texas Administrative Code, Title 37, Part 1, Chapter 36, Subchapter A, Rule §36.5. Sellers of Catalytic Converters in the Ordinary Course of Business.
(a) For purposes of §1956.002(1), Occupations Code, a manufacturing, industrial, commercial, retail, or other seller that sells catalytic converters in the ordinary course of the seller's business includes but is not limited to a person acting on behalf of a business that is a:
(1) metal recycling entity registered under Chapter 1956, Occupations Code;
(2) motor vehicle dealer or converter that holds a license under Chapter 2301, Occupations Code, including the service department of the dealer or converter;
(3) salvage vehicle dealer licensed, or a business classified as a salvage pool operator, under Chapter 2302, Occupations Code;
(4) used automotive parts recycler licensed under Chapter 2309, Occupations Code;
(5) person who operates a shop or garage that is engaged in the business of repairing motor vehicles to whom Chapter 2305, Occupations Code, applies; or
(6) holder of a dealer general distinguishing number under Chapter 503, Transportation Code, including the service department of the holder;
(7) a person permitted, registered or licensed by another state, or a political subdivision of another state, to engage in one or more business activities for which a person listed in paragraphs (1) through (6) of this subsection would be required to be permitted, registered or licensed by this state or a political subdivision of this state; or
(8) a person who imports catalytic converters or participates in handling or transporting in connection with such importing, pursuant to the laws of the United States.
(b) Notwithstanding subsection (a) of this section, the purchase of a catalytic converter, including any material removed from a catalytic converter, is governed by the provisions of Chapter 1956, Occupations Code and this chapter. Accordingly, only a registered metal recycling entity may purchase a catalytic converter, including any material removed from a catalytic converter.
(c) This section does not affect the application of:
(1) a statute referred to in subsections (a)(2) through (a)(6) of this section; or
(2) any requirement of law other than Chapter 1956, Occupations Code.
Summary of New Laws Impacting Metal Recycling Entities
Sept. 3, 2021
Austin – The 87th Session of the Texas Legislature made statutory changes to Texas Occupations Code, Chapter 1956, which went into effect September 1, 2021. Below is a summary of the new laws.
Caption: Relating to the regulation of metal recycling; increasing a criminal penalty.
- Adds requirements relating to the purchase of catalytic converters by metal recycling entities.
- Increases criminal penalties for knowingly purchasing stolen catalytic converters.
- Each metal recycling entity shall mark each catalytic converter purchased by the entity with a unique number that identifies the entity, the date, and the individual transaction. The number may consist of a combination of numbers and letters, and must be legibly and permanently marked with an industrial paint pen or marker in numbers at least one inch high.
- The department has established the required sequencing as follows:
- The first three digits will be the following unique number/characters associated with this location: 123
- The next six digits will be the two-digit month and four-digit year (Example: September will be 092021, October will be 102021, November will be 112021)
- The last four digits will be selected by this MRE location and should only be used once on a purchased catalytic converter per month.
- The marking should have thirteen digits in total.
Caption: Relating to a defense under the Solid Waste Disposal Act for persons engaged in certain scrap metal recycling transactions.
- Adds requirements for scrap metal recycling transactions under the purview of Texas Commission on Environmental Quality (TCEQ), to create an exemption from liability for metal recycling entities in relation to scrap metal transactions: if the metal recycling entity arranged for disposal by contract in an appropriate manner, or if the metal recycling entity arranged for transport for disposal or treatment in an appropriate manner, the entity is not held liable for the polluter's actions.
DPS TO IMPLEMENT SENATE BILL 208 – 85TH LEGISLATIVE SESSION
Effective September 1, 2017, MREs will be required to report the possession of an explosive device, whether knowingly purchased or otherwise obtained by the entity, no later than the close of business on the first working day after the explosive device is discovered. Violation of this requirement is a Class A misdemeanor.
Senate Bill 208 also expands the violations for which the Department may impose administrative penalties. A proposed penalty schedule, along with other rule amendments, will be presented to the Public Safety Commission at its August 24th meeting. If approved, the proposals will be published in the Texas Register for public comment.
DPS is working with the metal recycling industry, the law enforcement community, and the Texas Metal Advisory Committee to update administrative rules and guidelines for reporting possession of explosive devices.
DPS is also in the process of developing guidelines for the renewal of Cash Transaction Cards. This process is expected to be completed within two to four weeks, at which time the guidelines will be published on the Metal Recycling Entities Program website.
Additional information will be forthcoming as soon as available. This information will be sent via email, and will also be posted to the Metal Recycling Entities Program website once available.
DPS has prepared Battery Reporting Guidelines for your use. In addition, program staff will be available from 6 a.m. to 9 pm., Sept. 29 through Oct. 2, 2015, should you have questions regarding the new guidelines. Please call (512) 424-7617, (512) 424-7625, (512) 424-7461 or (512) 424-7853.
House Bill 2187 was signed by Governor Abbott on June 19, 2015, and is effective September 1, 2015. This bill relates to the regulation of MRES; imposing an administrative penalty, and amending provisions subject to criminal penalty. HB 2187 also requires MRES to issue cash transaction cards to any seller of regulated material being paid by cash or debit card. Cash transaction cards are non-transferable and the metal recycler will be required to keep copies of each application and a copy of each cash transaction card for two years. DPS has developed the Application for Cash Transaction Card for use by MRE's. Unless a seller had been issued a cash transaction card, a recycler is only able to pay for a purchase of regulated material by check, money order or electronic funds transfer.
Texas Administrative Code §36.5
Statutory agent disclosure information must be submitted by all applicants for each location at which the applicant is seeking to conduct business. Each person applying for a certificate of registration must designate a natural person as the statutory agent and provide a physical address where that natural person may be located. This address may not be a post office box. Modification of the statutory agent disclosure information must be submitted using the Department’s online application whenever the statutory agent is changed and all required fees must be paid pursuant to Texas Administrative Code §36.19.
New reporting process for Metal Recycling Entities
Effective October 1, 2013, Metal Recycling Entities (MRE) will be required to report transactions at Texas Online Metal. The DPS Metal Recycling staff will no longer accept transaction reports submitted via postal mail, facsimile, or email from MREs for the purposes of data entry. With the exception of those entities granted an exemption , pursuant to Texas Occupations Code, Chapter 1956. 036(d).
The online renewal process for Metal Recycling Entities (MRE) Program certificate will be available beginning on Feb. 22, 2013. Each MRE statutory agent will receive an email approximately 45 days before expiration. The email will provide directions for completing the renewal application. Questions regarding Metal Recycling may be directed to Contact Us, select “Metal Recycling Entities” and complete the form.
New Legislation - Burned Insulated Communications Wire
Senate Bill 694 (§8), amending Texas Occupations Code §§1956.032(a)(5)and(h)(approximately page 10 of document) enacted by the 82nd Texas Legislature, includes language about recycling whole or partially burned insulated communications wire.
Senate Bill 694, enacted by the 82nd Texas Legislature, adds several items to the list of regulated metals. Effective September 1, 2011 all transactions involving these materials are required to be recorded and reported in the same manner as all other previously regulated transactions...[Read more about Legislative Changes...]
Attention Texas Metal Recycling Entity Dealers
On February 22, 2011, the Texas Department of Public Safety has introduced a new Web-based application process for the required registration of all Metal Recycling Entities conducting business within the State of Texas.[Read more about Texas MRE Dealers...]