The following opinion is presented on-line for informational use only and does not replace the official version. (Mich. Dept. of Attorney General Web Site - http://www.ag.state.mi.us)

STATE OF MICHIGAN

BILL SCHUETTE, ATTORNEY GENERAL

Subsection 6(5), MCL 445.426(5), of the Scrap Metal Regulatory Act, MCL 445.421 et seq., requiring payment by mail applies to purchase transactions with a seller whose collective sales for a business day total $25.00 or more, whether or not any of the specific items identified in subsection 6(1), MCL 445.426(1), are involved in the purchase transactions.

Opinion No. 7281

March 27, 2015

The Honorable Mike Kowall

State Senator

The Capitol

Lansing, MI  48909

You ask whether the mailing requirements of subsection 6(5), MCL 445.426(5), of the Scrap Metal Regulatory Act, MCL 445.421 et seq., apply only to the items listed in subsection 6(1), MCL 445.426(1), of the Act and not to any other types of scrap metal.

Previously named the Nonferrous Metal Regulatory Act, 2008 PA 429, the Scrap Metal Regulatory Act regulates the purchase and sale of scrap metal and other items containing ferrous or nonferrous metal.  This law specifically sets out the recordkeeping requirements and acceptable payment methods for various transactions involving these metals.  The Act was amended by 2014 PA 99 to address several issues, including the growing problem of metal theft, which was found to create serious safety hazards and significant financial consequences for Michigan businesses.  See House Legislative Analysis, HB 4593 and HB 4595, July 7, 2014, p 8.  The amendments broadened the scope of the Act to include both ferrous and nonferrous metals, restricted payment options for scrap metal sales, and expanded the recordkeeping requirements for scrap metal dealers to better equip law enforcement in their detection and pursuit of metal thieves.

Your request arises from reports that police departments are not uniformly applying the mailing requirement in subsection 6(5), MCL 445.426(5), of the Act.  Specifically, you note that one police department has distributed a flow chart that indicates that scrap metal dealers “must mail payment if the seller is to receive $25.00 or more for all scrap metal sold in a single transaction or in a business day and the transaction includes one of the [ ]items” listed in subsection 6(1), MCL 445.426(1), of the Act.[1]

The analysis of a statute must begin with the language of the statute itself. The Michigan Supreme Court has recognized that “[t]he cardinal rule of statutory construction is to discern and give effect to the intent of the Legislature.”  People v Williams, 491 Mich 164, 172; 814 NW2d 270 (2012), quoting People v Dowdy, 489 Mich 373, 379; 802 NW2d 239 (2011).  The statute’s language is the “ ‘touchstone of legislative intent.’ ” People v Hardy, 494 Mich 430, 439; 835 NW2d 340 (2013), quoting People v Gardner, 482 Mich 41, 50; 753 NW2d 78 (2008).  When the language of a statute is clear and unambiguous, the courts will “assume that the Legislature intended its plain meaning and [ ] enforce the statute as written.”  Id.

Section 5, MCL 445.425, of the Act sets forth a number of general requirements for scrap metal dealers, including limitations regarding the form of payment permissible for scrap metal purchases, and an identification requirement.  Subsection 5(1)(a) provides that “[u]nless section 6 applies, and except as provided in subdivision (b) [regarding commercial and industrial sellers], a scrap metal dealer shall only pay a seller using 1 of the following methods of payment in a purchase transaction and shall not pay the seller in cash or using any other method of payment[.]”  MCL 445.425(1)(a) (emphasis added).  The permitted payment methods are check or money order, or by an electronic payment card or encrypted receipt. MCL 445.425(1)(a)(i)-(ii). 

Section 6, MCL 445.426, also sets forth a number of requirements, including payment-method restrictions for specific items, a database development option, and the payment mailing requirement.[2]  Subsection 6(1), MCL 445.426(1), lists acceptable payment methods for three categories of commonly stolen items:

(1)  In a purchase transaction of any of the following items, the only methods of payment a scrap metal dealer may use to pay a seller are a direct deposit or electronic transfer to the seller’s account at a financial institution; subject to subsection (5), payment with a check or money order described in section 5(1)(a)(i); or, subject to subsection (5), payment with an electronic payment card or encrypted receipt described in section 5(1)(a)(ii):

(a)  Catalytic converters, unless the seller is an automotive recycler as defined in section 2a of the Michigan vehicle code, 1949 PA 300, MCL 257.2a; a manufacturer or wholesaler of catalytic converters; or a muffler shop, tire store, or other retail business that sells converters separately or as part of an exhaust system.

(b)  Air conditioners, air conditioner evaporator coils or condensers, or parts of air conditioner evaporator coils and condensers.

(c)  Copper wire, including copper wire that is burned in whole or in part to remove the insulation, copper pipe, or copper fittings.  [Emphasis added.][3]

Under this subsection, transactions involving catalytic converters, air conditioners and parts, and copper wire, pipes, or fittings, may only be paid by (i) direct deposit or electronic transfer, (ii) check or money order, or (iii) an electronic payment card or encrypted receipt.  However, subsection 6(1) provides that the latter two payment methods are further subject to the requirements of subsection 6(5).

Subsection 6(5), MCL 445.426(5), imposes additional restrictions with respect to payment for transactions under the Act:

(5)  If the purchase price in a purchase transaction described in subsection (1) is $25.00 or more, or if the purchase price for all of a seller’s purchase transactions in a business day is $25.00 or more, the scrap metal dealer must pay the seller by mailing 1 of the following items to the seller at the address shown on the identification card presented under section 5(2)(a), and shall not deliver that payment in person or using any other form of delivery:

(a)  A check or money order described in section 5(1)(a)(i).

(b)  An electronic payment card or encrypted receipt described in section 5(1)(a)(ii).

(c)  A nontransferable receipt that the seller may redeem at the scrap dealer’s premises for 1 of the items described in subdivision (a) or (b).

You ask whether the mailing requirement applies only to transactions involving subsection 6(1) items – catalytic converters, air conditioners and parts, and copper wire, pipes, or fittings – or to transactions involving other scrap metal as well.

Subsection 6(5) requires a dealer to pay a seller by mailing an acceptable form of payment “[i]f the purchase price in a purchase transaction described in subsection (1) is $25.00 or more, or if the purchase price for all of a seller’s purchase transactions in a business day is $25.00 or more . . . .”

The first clause of subsection 6(5) plainly applies the mailing requirement to any single transaction involving a subsection 6(1) item with a purchase price of $25.00 or more.  The second clause – “or if the purchase price for all of a seller’s purchase transactions in a business day is $25.00 or more” – requires further analysis.  (Emphasis added).  The question is whether the phrase “all . . . purchase transactions” refers only to multiple transactions involving subsection 6(1) items that total $25.00 or more in a business day, or whether it includes transactions involving other scrap metal that total $25.00 or more in a business day, or a combination of both.

Where words are not defined by statute, a dictionary may be consulted to ascertain the plain meaning of the terms.  Holland v Trinity Health Care Corp, 287 Mich App 524, 527–528; 791 NW2d 724 (2010).  “The word ‘all’ is defined, in part, by Random House Webster’s College Dictionary (2001) as follows: ‘1. the whole or full amount of . . . 4. any; any whatever . . . 10. Everything[.]’ ”  Schmude Oil Co, Inc v Dep’t of Environmental Quality, 306 Mich App 35, 44-45; 856 NW2d 84 (2014).  The “term is all-inclusive . . . .”  Id.  The phrase “purchase transaction” is defined in the Act, in part, as the “purchase of scrap metal . . .  by a scrap metal dealer.”  MCL 445.423(h).  The definition of “scrap metal” broadly includes “ferrous or nonferrous metal, or items that contain ferrous or nonferrous metal . . . .”  MCL 445.423(k).[4]  These terms plainly encompass more items than the three types specifically identified in subsection 6(1)(a)-(c).  In addition, as noted above subsection 5(1), MCL 445.425(1), which imposes payment limitations on scrap-metal dealers and sellers generally, expressly references the limitations of section 6 – “Unless section 6 applies . . . a scrap metal dealer shall only pay a seller using 1 of the following methods of payment in a purchase transaction . . . .” 

Giving all these terms their plain meaning and reading them in context of the Act as a whole, the phrase “all . . . purchase transactions” means any “purchase transaction” involving the purchase of “scrap metal” as these terms are defined in the Act.  Accordingly, the mailing requirement imposed by the second clause of subsection 6(5) for multiple transactions totaling $25.00 or more in a business day is not limited to transactions solely involving subsection 6(1) items.  Rather, it includes subsection 6(1) items and other scrap-metal items, or transactions including a combination of both.

This interpretation is supported by the fact that the Legislature did not repeat in the second clause the “described in subsection (1)” limitation that appears in the first clause.  It is impermissible to “read into [a] statute a requirement that the Legislature has seen fit to omit.”  Menard, Inc v Dep’t of Treasury, 302 Mich App 467, 471–472; 838 NW2d 736 (2013) (citations omitted).  Moreover, it is consistent with the purpose of the amendments that added subsections 6(1) and (5), which was in large part to address metal theft by making the receipt of payment more difficult. Although the items identified in subsection 6(1) may be those most commonly stolen, illicit activity is not limited to those items.  Furthermore, while legislative analyses are not dispositive of legislative intent, In re Certified Question, 468 Mich 109, 115 n 5; 659 NW2d 597 (2003), it is worth observing that the analysis of 2014 PA 99, as enacted, similarly interpreted subsection 6(5) as applying to other types of scrap metal.  See House Legislative Analysis, HB 4593 and HB 4595, July 7, 2014, p 4.[5]  Thus, for purposes of requiring payment by mail, the Legislature set a $25.00 per transaction threshold for subsection 6(1) items, or a $25.00 per business day threshold for all scrap-metal items.  The payment thresholds allow smaller purchase transactions of any scrap-metal items to be processed on an immediate or daily basis.

             It is my opinion, therefore, that subsection 6(5), MCL 445.426(5), of the Act requiring payment by mail applies to purchase transactions with a seller whose collective sales for a business day total $25.00 or more, whether or not any of the specific items identified in subsection 6(1), MCL 445.426(1), are involved in the purchase transactions.   

BILL SCHUETTE

Attorney General