OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 328 Bill Analysis
135th General Assembly
Click here for H.B. 328’s Fiscal Note
Version: As Passed by the House
Primary Sponsors: Reps. Plummer and Roemer
Effective Date:
Austin C. Strohacker and Nicholas A. Keller, Attorneys
SUMMARY
 Requires scrap metal dealers and other persons who purchase used catalytic converters
to comply with certain additional recordkeeping, reporting, and process requirements.
 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 catalytic
converters.
 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.
 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.
TABLE OF CONTENTS
Overview ......................................................................................................................................... 2
Secondhand dealer law ................................................................................................................... 2
Recordkeeping............................................................................................................................. 2
Special purpose article requirements ......................................................................................... 3
Proof of ownership ...................................................................................................................... 4
Business-to-business transactions .............................................................................................. 4
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Posting requirements .................................................................................................................. 5
Exemptions .................................................................................................................................. 5
Penalties ...................................................................................................................................... 5
Communication and Information Management System (CIMS) .................................................... 6
Investigations .................................................................................................................................. 6
Motor vehicle salvage dealers ........................................................................................................ 7
Exemption from regulatory restriction requirements .................................................................... 8
Theft and receiving stolen property ............................................................................................... 8
Theft ............................................................................................................................................ 8
Receiving stolen property ........................................................................................................... 9
Complicity ..................................................................................................................................... 10
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
rhodium, platinum, and palladium.1 The bill increases oversight of the sale of catalytic
converters to scrap metal dealers and other persons and increases penalties relating to stolen
catalytic converters.
Secondhand dealer law
The bill establishes new requirements in association with the sale and acquisition of
used catalytic converters – including catalytic converter cores, diesel particulate filters, and
diesel oxidation catalysts. Some of the bill’s requirements are similar to those that apply under
continuing law to special purchase articles. Others are entirely new. In either case, the bill’s
requirements apply to both scrap metal dealers and other purchasers of used catalytic
converters, including a junk yard, motor vehicle salvage yard, or motor vehicle repair and
window tint operator.2
Recordkeeping
Continuing 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 purchased by the dealer. The dealer must submit this record by noon the following day
to the Director of Public Safety for inclusion in the Communication and Information
1 See Carfax, “What is a Catalytic Converter,” which is available on Carfax’s website: carfax.com/blog.
2 R.C. 4737.04(A)(5) and 4737.041(B).
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Management System (CIMS).3 CIMS is a system that allows the receipt and transmission of
scrap theft alerts to dealers and law enforcement.4
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. The bill adds that, in the case of a catalytic converter or special
purpose article, the record must include a copy of the check issued as payment for the item. 5
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.6 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 is “catalytic converters.”7
 For recyclable materials that are special purchase articles, identify the relevant special
purchase article category.8
Special purpose article requirements
The bill does not make catalytic converters special purchase articles, but it does subject
catalytic converters to many of the same extra requirements that are otherwise limited to
special purpose articles. Specifically, the bill requires a scrap metal dealer or other purchaser of
a catalytic converter to do all of the following:
 Prepare and submit the records described above;
 Take a photograph of each catalytic converter;
 Obtain proof of ownership from the seller (see “Proof of ownership,” below);
 Issue payment for the catalytic converter by check;
 Withhold payment for two days after the catalytic converter is purchased;
 Upon receiving a catalytic converter that was stolen, make certain records available to
the lawful owner for inspection.9
3 R.C. 4737.04(A), (C), and (E)(1)(b).
4 R.C. 4737.045(E)(1).
5 R.C. 4737.04(C).
6 R.C. 4737.04(I).
7 R.C. 4737.04(C)(5).
8 R.C. 4737.04(C) and (A)(2).
9 R.C. 4737.041(A).
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Proof of ownership
As mentioned above, the bill requires a scrap metal dealer or other purchaser of a used
catalytic converter to obtain proof of ownership from the seller. The bill specifies that proof of
ownership must be established as follows:
 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 the motor vehicle dealer that repaired the car, the dealer’s license
number along with a receipt indicating replacement of the catalytic converter and the
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.
In lieu of the information described above, the seller may provide the dealer with an
affidavit, in a form provided by the Director of Public Safety, which includes the name and
contact information of the seller or provider, a statement of the reasons the seller or provider is
unable to produce the items described above, and any other information and documents
required by the Director. The form must be published on the Department of Public Safety’s
website within 90 days after the bill’s effective date. A person who makes a false statement on
such an affidavit is guilty of falsification.10
Business-to-business transactions
The bill requires a scrap metal dealer or other purchaser of a used catalytic converter,
upon re-selling the catalytic converter to a business or any person that is not an individual, to
provide the Director with all of the following:
 A copy of the scrap metal dealer’s (or other purchaser’s) primary owner’s driver’s
license or state identification card;
 The scrap metal dealer dealer’s (or other purchaser’s) federal employer identification
number;
 The scrap metal dealer’s (or other purchaser’s) permanent physical address, which must
not be a post office box;
 Any other information required by the Director.11
10 R.C. 4737.041(C).
11 R.C. 4737.04(K) and 4737.041(B).
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Posting requirements
The bill requires scrap metal dealers and bulk merchandise container dealers to post a
copy of the dealer’s registration in a conspicuous place.12
Exemptions
Under continuing law, certain transactions are exempt from the reporting,
recordkeeping, and process requirements described above. The following types of transactions
qualify for exemption under current law:
 Donations to nonprofit organizations and others for which the person donating receives
no payment;
 Sales and donations of common recycled matter;
 Sales between a scrap metal dealer and tax exempt organizations that collect scrap
metals for fundraising purposes;
 Certain sales between businesses, and between a business and the government;
 Sales between scrap metal dealers and persons who create products that result in bulk
quantities of recyclable materials;
 Sales of catalytic converters between a scrap metal dealer and a motor vehicle dealer.
The bill repeals the last exception, and specifies that none of the others apply to sales or
donations of used catalytic converters.13
Penalties
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
12 R.C. 4717.04(G).
13 R.C. 4737.043.
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suspension of the dealer’s registration until the Director determines that the dealer has
taken “necessary steps” to comply with the reporting requirements;
 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 or bulk merchandise container
dealer, 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.14
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).15 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 $10,000.16 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. 17
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.18
Communication and Information Management System (CIMS)
The bill requires a law enforcement agency to submit all records of any investigation
into a scrap metal dealer or bulk merchandise container dealer to the Director.19
Investigations
The bill allows the Director of Public Safety, under certain circumstances, to investigate
a scrap metal dealer, a person (other than a licensed motor vehicle dealer) who receives a used
catalytic converter in the ordinary course of business, and employees, officers, and agents of
14 R.C 4737.99(C), 4737.045(H), 4737.046(G), and 4737.04(E) and (G)(3).
15 R.C. 4737.99(C).
16 R.C. 4737.99(C)(2).
17 R.C. 4738.07, 4738.12, and 4775.09.
18 R.C. 4737.99(H).
19 R.C. 4717.04(F)(3).
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the foregoing. The Director’s investigative authority also extends to persons acting as a scrap
metal dealer or bulk merchandise container dealer without a registration or license. In either
case, an investigation may be initiated only after consulting with local law enforcement.
As part of an investigation, the Director is empowered to search the alleged violator’s
premises during normal business hours, apply for court orders, and issue subpoenas. If the
Director finds a violation, the Director must suspend the person’s registration or license and
reinstate such registration or license only if the person remedies the violation. Following a
suspension or revocation, the Director must conduct a follow-up investigation to determine if
the person c