2023 -- H 5842

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LC002019

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

RHODE ISLAND CATALYTIC CONVERTER INTERSTATE COMPACT

     Introduced By: Representatives Solomon, Newberry, Casey, and Vella-Wilkinson

     Date Introduced: March 01, 2023

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 6 of the General Laws entitled "COMMERCIAL LAW — GENERAL

REGULATORY PROVISIONS" is hereby amended by adding thereto the following chapter:

CHAPTER 11.3

RHODE ISLAND CATALYTIC CONVERTER INTERSTATE COMPACT

     6-11.3-1. Short title.

     This chapter shall be known and may be cited as the "Rhode Island Catalytic Converter

Interstate Compact Act."

     6-11.3-2. Purpose.

     (a) The purpose of the catalytic converter compact, hereinafter ("the compact"), is to

regulate the sale and re-sale of catalytic converters, hereinafter ("converters"), and to attempt to

prevent the sale and resale of stolen converters. The compact preserves the regulatory authority of

the state to prevent the illegal sale of precious metals, particularly catalytic converters. The compact

is designed to achieve the following objectives:

     (1) Decrease the availability of stolen converters and the precious metals contained therein;

     (2) Enhance the states’ ability to track down and prosecute those individuals responsible

for stealing, buying and dealing in precious metals;

     (3) Disrupt and bring an end to the proliferation of stolen converters and precious metals;

     (4) Adopt an interstate exchange of information in order to stop the interstate buying and

dealing of converters and precious metals; and

     (5) Adopt uniform reporting documents that would be stored in a data base accessible to

all states adopting the compact. Information on such documents would include the name of the

seller of any converter or precious metal, the buyer, other identifying information of any participant

including, but not limited to, their dates of birth, social security numbers, place of employment,

driver's license number, and copies of any business license including a precious metals license that

permits the individual to sell, buy or barter any precious metal.

     6-11.3-3. Definitions.

     As used in this compact, and except as otherwise provided, the following definitions shall

apply:

     (1) “Catalytic converter” ("converter") means an air pollution abatement device that

removes pollutants from motor vehicle exhaust, either by oxidizing them into carbon dioxide and

water or reducing them to nitrogen.

     (2) “Compact privilege” means the authorization granted by a remote state to allow a

licensee from another member state to access its data base containing information regarding the

sale and purchases of converters and the identity of those dealing in those sales and purchases. Each

data base shall be established by and through the office of the department of attorney general or

other law enforcement agency at the discretion of the participating state.

     (3) “Data system” means a repository of information about the sale and purchase of

converters and those individuals involved in those transactions.

     (4) “Home state” means the member state that is the primary state generating the records

made from sales and purchases occurring in that state.

     (5) “Investigative information” means information, records, and documents received or

generated by any law enforcement agency, pawnbroker, salvage yard operator or second-hand

dealer in automobile parts or precious metals.

     (6) “Licensee” means an individual who currently holds an authorization from the state to

buy or sell precious metals or automobile parts.

     (7) “Member state” means a state that has enacted the compact.

     (8) “Party state” means any member state in which a licensee holds a current license or

compact privilege or is applying for a license or compact privilege.

     (9) “Person” means individuals, partnerships, associations and corporations.

     (10) “Precious metals” means gold, silver, platinum group metals or any articles containing

those items or that are contained in a catalytic converter.

     (11) “Remote state” means a member state other than the home state, where a licensee is

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exercising or seeking to exercise the compact privilege.

     (12) “Rule” means a regulation, principle, or directive promulgated herein.

     (13) “State” means any state, commonwealth, district, or territory of the United States of

America that regulates the sale and purchase of precious metals and automobile parts.

     6-11.3-4. State participation in the compact.

     (a) To participate in the compact, a state shall:

     (1) Participate fully in a shared data system which includes requiring proof of positive

identification of sellers and buyers of converters. Identification shall require photo identification,

date of birth, addresses and if the participant is a minor, then the identification of a parent or

guardian;

     (2) Require each person who is in the business of selling or buying converters or precious

metals to be duly licensed by the state;

     (3) Retain copies of all applications for licensing, renewals of license applications and a

comprehensive record of all transactions in which they engage;

     (4) Require that any licensee provide, on a weekly basis to the department of attorney

general or the keeper of the data base, and retain in their records all records of transactions for a

period of no less than ten (10) years; and

     (5) Require the department of attorney general or the keeper of the data base to promulgate

further rules and regulations concerning the business of selling and buying converters and precious

metals. Any rule promulgated shall also require that new and used car dealers, auto repair shops

and mechanics and gas stations comply with the rules and regulations set forth in this chapter and

any other rule and regulation adopted by the department of attorney general or other keeper of the

data base.

      (b) Any person licensed in another state, that is a participating state, shall also comply

with any rule and regulation set in accordance with this chapter and any out of state licensee who

is not from a participating state, shall, before selling or buying any converter, obtain a criminal

background check through the department of attorney general. Failure to comply with the

provisions of this section shall be punished by up to one year imprisonment and a one thousand

dollar ($1,000) fine.

     6-11.3-5. Compact privilege.

     (a) To exercise the compact privilege under the terms and provisions of the compact, the

licensee shall:

     (1) Hold a license in the home state;

     (2) Have no encumbrance on any state license;

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     (3) Be eligible for a compact privilege in any member state;

     (4) Have not had any adverse action against any license or compact privilege within the

previous two (2) years;

     (5) Notify the department of attorney general or other keeper of the data base that the

licensee is seeking the compact privilege within a remote state(s);

     (6) Pay any applicable fees, including any state fee, for the compact privilege; and

     (7) Report to the department of attorney general any adverse action taken by any non-

member state within thirty (30) days from the date the adverse action is taken.

     (b) The compact privilege is valid until the expiration date of the home license. The licensee

shall comply with all requirements to maintain the compact privilege in the remote state.

     (c) A licensee in a remote state is subject to that state’s regulatory authority. A remote state

may, in accordance with due process and that state’s laws, suspend or revoke a licensee’s compact

privilege in the remote state for a specific period of time, impose fines, and/or take any other

necessary actions to protect the citizens of that state. The licensee shall not be eligible for a compact

privilege in any state until the specific time for suspension or revocation has passed, the licensing

state had reinstated the license and all fines are paid.

     (d) If a home state license is encumbered, the licensee shall lose the compact privilege in

any remote state until the home state license is no longer encumbered pursuant to the provisions of

subsection (c) of this section:

     (e) Once an encumbered license in the home state is restored to good standing, the licensee

shall reapply to obtain a compact privilege in any remote state.

     6-11.3-6. Adverse actions.

     (a) A home state shall have exclusive power to impose adverse action against a license

issued by the home state.

     (b) A home state may take adverse action based on the investigative information of a

remote state, as long as the home state follows its own procedures for imposing adverse action.

     (c) Any member state may investigate actual or alleged violations of the statutes and rules

authorizing any person to be licensee in any other member state.

     (d) A remote state shall have the authority to:

     (1) Take adverse actions against a licensee’s compact privilege in the state;

     (2) Issue subpoenas for both hearings and investigations that require the attendance and

testimony of witnesses, and the production of evidence. Subpoenas issued by a party state for the

attendance and testimony of witnesses, and/or the production of evidence from another party state,

shall be enforced in the latter state by any court of competent jurisdiction, according to the practice

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and procedure of that court applicable to subpoenas issued in proceedings pending before it. The

issuing authority shall pay any witness fees, travel expenses, mileage, and other fees required by

the service statutes of the state where the witnesses and/or evidence are located; and

     (3) If otherwise permitted by state law, recover from the licensee the costs of investigations

and disposition of cases resulting from any adverse action taken against that licensee.

     (e) In addition to the authority granted to a member state by its applicable state law, a

member state may participate with other member states in joint investigations of licensees. Member

states shall share any investigative, litigation, or compliance materials in furtherance of any joint

or individual investigation initiated under the compact.

     6-11.3-7. Data system.

     (a) The department of attorney general or other keeper of the data base shall coordinate and

provide for the development, maintenance, and utilization of a coordinated database and reporting

system containing licensure, adverse action, and investigative information on all licensed

individuals in member states.

     (b) Notwithstanding any other provision of state law to the contrary, a member state shall

submit a uniform data set to the data system on all individuals to whom this compact is applicable

as required by the rules, including, but not limited to:

     (1) Identifying information;

     (2) Licensure data;

     (3) Adverse actions against a license or compact privilege;

     (4) Any denial of application for licensure, and the reason(s) for such denial; and

     (5) Other information that may facilitate the administration of this compact, as determined

by the collective departments of attorney general.

     (c) Investigative information pertaining to a licensee in any member state will only be

available to other party states.

     (d) The departments of attorney general or the keepers of the data base shall promptly

notify all member states of any adverse action taken against a licensee or an individual applying

for a license. Adverse action information pertaining to a licensee in any member state will be

available to any other member state.

      (e) Member states contributing information to the data system may designate information

that shall not be shared with the public without the express permission of the contributing state.

     (f) Any information submitted to the data system that is subsequently required to be

expunged by the laws of the member state contributing the information shall be removed from the

data system.

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     6-11.3-8. Rulemaking.

     (a) The department of attorney general shall exercise its rulemaking powers pursuant to the

criteria set forth in this section and the rules adopted thereunder. Rules and amendments shall

become binding as of the date specified in each rule or amendment by a majority vote of the

participating states.

     (b) If a majority of the legislatures of the member states rejects a rule, by enactment of a

statute or resolution in the same manner used to adopt the compact within four (4) years of the date

of adoption of the rule, then such rule shall have no further force and effect in any member state.

     (c) Rules or amendments to the rules shall be adopted by a majority vote of each

participating state.

     (d) Prior to promulgation and adoption of a final rule or rules, and at least thirty (30) days

in advance of any rule becoming effective, the state proposing the rule shall notify each

participating state of the proposed rule change and post it on a publicly accessible website for

review and comment by each state and each licensee or any other member of the public. Any

proposal and notice thereof shall:

     (1) Contain the text of the proposed rule or amendment and the reason for the proposed

rule;

     (2) Allow for comments on the proposed rule from any interested person; and

     (3) Provide copies of all proposals, responses and comments under any access to public

records act as promulgated by each participating state.

     6-11.3-9. Oversight, dispute resolution, and enforcement.

     (a) The executive, legislative, and judicial branches of state government in each member

state shall enforce this compact and take all actions necessary and appropriate to effectuate the

compact’s purposes and intent. The provisions of this compact and the rules promulgated hereunder

shall have standing as statutory law.

     (b) All courts shall take judicial notice of the compact and the rules in any judicial or

administrative proceeding in a member state pertaining to the subject matter of this compact which

may affect the powers, responsibilities or actions of the commission.

     (c) The department of attorney general or keeper of the data base shall be entitled to receive

service of process in any such proceeding and shall have standing to intervene in such a proceeding

for all purposes. Failure to provide service of process shall render a judgment or order void.

     6-11.3-10. Date of implementation of the interstate compact and associated rules and

regulations.

     (a) The compact shall come into effect on the date on which the compact statute is enacted

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into law in the tenth member state.

     (b) Any state that joins the compact subsequent to the initial adoption of the rules shall be

subject to the rules as they exist on the date on which the compact becomes law in that state. Any

rule that has been previously adopted shall have the full force and effect of law on the day the

compact becomes law in that state.

     (c) Any member state may withdraw from this compact by enacting a statute repealing the

same.

     (1) A member state’s withdrawal shall not take effect until six (6) months after enactment

of the repealing statute.

     (2) Withdrawal shall not affect the continuing requirement of the withdrawing states to

comply with the investigative and adverse action reporting requirements of this compact prior to

the effective date of withdrawal.

     6-11.3-11. Construction and severability.

     This compact shall be liberally construed in order to effectuate the purposes thereof. The

provisions of this compact shall be severable and if any phrase, clause, sentence or provision of

this compact is declared to be contrary to the constitution of any party state or of the United States

or the applicability thereof to any government, agency, person or circumstance is held invalid, the

validity of the remainder of this compact and the applicability thereof to any government, agency,

person or circumstance shall not be affected thereby. If this compact shall be held contrary to the

constitution of any party state, the compact shall remain in full force and effect as to the remaining

party states and in full force and effect as to the party state affected as to all severable matters.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

RHODE ISLAND CATALYTIC CONVERTER INTERSTATE COMPACT

***

     This act would establish an interstate compact which would regulate the purchase and sale

of catalytic converters specifically and precious metals generally with the goal of preventing the

proliferation of stolen converters and would set licensing and reporting requirements for each sale

or purchase of converters.

     This act would take effect upon passage.

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LC002019

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