OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 165 Bill Analysis
135th General Assembly
Click here for S.B. 165’s Fiscal Note
Version: As Introduced
Primary Sponsor: Sen. Johnson
Effective Date:
Austin C. Strohacker and Nicholas A. Keller, Attorneys
SUMMARY
 Makes a catalytic converter a special purchase article, requiring scrap metal dealers who
purchase them to comply with additional requirements.
 Requires purchasers of catalytic converters who are not scrap metal dealers to comply
with the same recordkeeping and transaction data submission requirements applicable
to scrap metal dealers, subject to the same penalties when the purchaser is an
individual.
 Imposes a $10,000 to $50,000 penalty on a business entity that violates the above
requirements.
 Prohibits a motor vehicle salvage dealer from purchasing or accepting individual motor
vehicle parts, such as a catalytic converter.
 Requires the Registrar of Motor Vehicles or the Motor Vehicle Repair Board to refuse to
revoke, refuse to renew, or refuse to issue a license to a motor vehicle salvage dealer or
motor vehicle repair and window tint operator that fails to comply with the bill’s
requirements related to catalytic converters.
 Requires the Director of Public Safety to use catalytic converter transaction data to
make a mandatory do-not-buy-from list of persons who attempt to sell more than one
used catalytic converter in a day.
 Prohibits a person from selling more than one used catalytic converter per day unless
the person obtains a bulk used catalytic converter sales license.
 Prescribes requirements for a bulk used catalytic converter sales license.
 Requires the holder of a bulk used catalytic converter sales license to submit transaction
data of all used catalytic converters the licensee purchases and sells for inclusion in the
same system as scrap metal dealer transaction data.
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 Enhances the penalties for theft when the item stolen is a catalytic converter.
 Enhances the penalties for receiving stolen property when the item stolen is a catalytic
converter.
 Provides that a person is guilty of complicity if the person sells a catalytic converter to
another person who violates the bill’s provisions.
 Makes an appropriation to support catalytic converter theft task forces.
TABLE OF CONTENTS
Overview ......................................................................................................................................... 2
Secondhand dealer law ................................................................................................................... 3
Recordkeeping............................................................................................................................. 3
Special purpose articles............................................................................................................... 3
Additional requirements ............................................................................................................. 4
Posting requirements .................................................................................................................. 5
Penalty ......................................................................................................................................... 5
Communication and Information Management System (CIMS) .................................................... 6
Bulk used catalytic converter sales license law .............................................................................. 7
Director of Public Safety duties ................................................................................................... 7
Application procedures; fee; changes in information ................................................................. 7
Documentation............................................................................................................................ 8
Investigations .................................................................................................................................. 9
Federal Preventing Auto Recycling Theft Act ............................................................................... 10
Motor vehicle salvage dealers ...................................................................................................... 10
Exemption from regulatory restriction requirements .................................................................. 10
Theft and receiving stolen property ............................................................................................. 11
Theft .......................................................................................................................................... 11
Receiving stolen property ......................................................................................................... 12
Complicity ..................................................................................................................................... 13
DETAILED ANALYSIS
Overview
A catalytic converter is part of an automobile’s exhaust system that reduces the toxicity
of the pollutants the car emits. Catalytic converters often contain precious metals such as
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rhodium, platinum, and palladium.1 The bill increases oversight of the sale of catalytic
converters to scrap metal dealers and other persons, licenses people engaged in bulk used
catalytic converter sales, and increases penalties relating to stolen catalytic converters.
Secondhand dealer law
The bill makes catalytic converters, including catalytic converter cores, special purchase
articles, thereby requiring scrap metal dealers who purchase them to comply with additional
requirements. It also requires purchasers who are not scrap metal dealers to comply with
similar requirements.
Recordkeeping
Current law requires a scrap metal dealer (the owner or operator of a business that
purchases or receives scrap metal for the purpose of sorting, grading, and shipping metals to
third parties for direct or indirect melting into new products) to maintain a daily record of all
articles (not just special purchase articles) purchased by the dealer and submit this record by
noon the following day to the Director of Public Safety for inclusion in the Communication and
Information Management System (CIMS).2 The CIMS is a system that allows the receipt and
transmission of scrap theft alerts to dealers and law enforcement.3 The record must include
several pieces of information, including a description of the article purchased, the identity of
the seller, and the license plate number of the vehicle in which the seller arrived at the dealer. 4
Continuing law also requires a dealer to take a photograph of each person who sells the dealer
an article for which the dealer is required to make a record, including a catalytic converter.5
Special purpose articles
In submitting its daily record, a dealer must do the following with respect to recyclable
materials that the dealer purchases:
 For recyclable materials that are not special purchase articles, identify the relevant
recyclable materials category code. One such code under current law is “catalytic
converters,” which the bill removes.6
 For recyclable materials that are special purchase articles, identify the relevant special
purchase article category. The bill adds “catalytic converter” as a special purchase article
1 See Carfax, “What is a Catalytic Converter,” which is available on Carfax’s website: carfax.com/blog.
2 R.C. 4737.04(A), (C), and (E)(1)(b).
3 R.C. 4737.045(E)(1).
4 R.C. 4737.04(C).
5 R.C. 4737.04(I).
6 R.C. 4737.04(C)(5).
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category and further requires that the record include a copy of the check issued as
payment for any special purpose article.7
The bill makes several changes relating to the sale of catalytic converters. The bill
includes catalytic converters as special purchase articles, requiring the scrap metal dealer to
comply with additional requirements described below. It also requires any person purchasing a
catalytic converter to follow the same requirements that scrap metal dealers must follow when
they purchase catalytic converters.
Additional requirements
Specifically, the bill requires a scrap metal dealer or other purchaser of a catalytic
converter, including a junk yard, motor vehicle salvage yard, or motor vehicle repair and
window tint operator, to do all of the following (except as noted below, such requirements
already apply to scrap metal dealers purchasing special purpose articles under current law):
 Prepare and submit the record described above;
 Refrain from purchasing a catalytic converter from a person identified by law
enforcement or the Director of Public Safety as a known thief or receiver of stolen
property;
 Refrain from purchasing more than one catalytic converter per day from the same
person except from a motor vehicle dealer;
 Take a photograph of each person who sells the purchaser a catalytic converter;
 Take a photograph of each catalytic converter (new requirement for both scrap metal
dealers and other purchasers);
 Obtain from the seller proof that the seller owns the catalytic converter. Proof may only
be provided in the following ways:
 If the seller owns the car, the car’s title or registration or a repair receipt indicating
replacement of the catalytic converter and the car’s make, model, year, and vehicle
identification number;
 If the seller is a motor vehicle collision repair operator, the operator’s registration
certificate along with a receipt indicating replacement of the catalytic converter and
the make, model, year, and vehicle identification number. (The standards for
proving ownership of a catalytic converter are new for both scrap metal dealers and
other purchasers.)
 If payment is rendered, issue a check for the purchase (new requirement for both scrap
metal dealers and other purchasers);
7 R.C. 4737.04(C)(6) and (A)(2).
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 Withhold payment for two days (new requirement for both scrap metal dealers and
other purchasers);
 If an asserted owner of a stolen catalytic converter provides proof of having filed a
stolen property report with law enforcement, make records describing the catalytic
converter the person purchased after the alleged date of theft available for inspection
to the asserted owner for a period of six months after the alleged date of theft, except
that the person must withhold the name of the person from whom the catalytic
converter was purchased and the amount paid (new requirement for both scrap metal
dealers and other purchasers);
 Refrain from recklessly failing to comply with the above requirements.8
Motor vehicle dealers receiving used catalytic converters in the ordinary course of
business are exempt from these requirements.9
Posting requirements
The bill requires scrap metal dealers to post notice that catalytic converters are special
purpose articles. Furthermore, it requires scrap metal dealers and bulk merchandise container
dealers to post a copy of the dealer’s registration in a conspicuous place.10
Penalty
Under current law, a scrap metal dealer or bulk merchandise container dealer that
violates the secondhand dealer law is guilty of at least a first degree misdemeanor and at most
a fourth degree felony, depending on the number of prior convictions. In addition, for any
second or subsequent violation, a court may suspend the dealer’s registration for a period of 90
days. The bill requires the Director of Public Safety to revoke, or refuse to issue or renew the
registration of a scrap metal dealer or bulk merchandise container dealer that fails to comply
with recordkeeping and reporting requirements related to special purpose articles or that is
convicted of, or pleads guilty to stealing a used catalytic converter or receiving a stolen used
catalytic converter.
In addition, the bill requires the Director of Public Safety to impose the following
sanctions:
 Respecting a dealer that fails to properly submit a daily record of purchases for inclusion
in CIMS (as described above), a $500 fine for each day the violation occurs, and
suspension of the dealer’s registration until the Director determines that the dealer has
taken “necessary steps” to comply with the reporting requirements. A dealer whose
8 R.C. 4737.04(F)(2), (5), and (6), and (I) and 4737.041.
9 R.C. 4737.041(B).
10 R.C. 4717.04(G).
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registration is suspended may petition the Director for reinstatement every 90 days. The
Director’s determination is subject to appeal.
 Respecting a dealer that does not post a copy of the dealer’s registration in a
conspicuous place, as required by the bill (see above), a $500 fine;
 Respecting a person that acts as a scrap metal dealer, bulk merchandise container
dealer, or bulk seller of used catalytic converters without a license, an injunction, and a
$10,000 fine for the first day in violation, plus a $1,000 fine for each consecutive day of
violation.
These fines must be deposited to the Infrastructure Protection Fund.11
The bill also prescribes penalties for persons other than a scrap metal dealer that do not
abide by the bill’s requirements when purchasing a used catalytic converter. Any person, other
than a business entity, who fails to comply with the above requirements is subject to the same
penalties as a scrap metal dealer (except for suspension of a dealer’s registration, as they are
not registered dealers).12 Any business entity that fails to comply with such requirements must
be fined at least $10,000, but not more than $50,000 per violation. This exceeds the default
organizational penalty for a first degree misdemeanor, which is a fine of $5,000, and for a
fourth degree felony, which is a fine of $10,000.13 In the case of a business entity that is a
motor vehicle salvage dealer or a motor vehicle repair and window tint operator, the bill
requires revocation, refusal to renew, or refusal to issue a license to that business. 14
When any fine is imposed for an offense involving the sale or purchase of a used
catalytic converter, other than a fine explicitly designated for the Infrastructure Protection
Fund, the bill requires the clerk of courts to pay the fine to the county, township, municipal
corporation, park district, or state law enforcement agencies that were primarily responsible
for, or involved in, arresting and prosecuting the offender.15
Communication and Information Management System (CIMS)
The bill requires the Director of Public Safety to use the transaction data submitted
following the purchase of a used catalytic converter to make a list of all persons who, without a
license as described under “Bulk used catalytic converter sales license law” below,
sold more than one used catalytic converter in a day.16 The bill prohibits a person from
purchasing a catalytic converter from any person on the list.17 The bill requires a law
11 R.C 4737.99(C), 4737.045(H), 4737.046(G), and 4737.04(E) and (G)(3).
12 R.C. 4737.99(C).
13 R.C. 4737.99(C)(2).
14 R.C. 4738.07, 4738.12, and 4775.09.
15 R.C. 4737.99(H).
16 R.C. 4737.045(E)(1)(e).
17 R.C. 4737.04(F)(2) and (5) and 4737.041(B).
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