Where do I register if I buy gold jewelry for resale in Tennessee, the state Department of Commerce or local police?

Subject

Opinion No. 12-98, Regulation of Used Jewelry Purchasers Under Tennessee Law, October 29, 2012

Plain-English summary

Commissioner McPeak (Department of Commerce and Insurance) asked whether someone in the business of buying gold or other precious metals in the form of used jewelry has to register with her department as a "scrap metal dealer" under Tenn. Code Ann. §§ 62-9-101 to -113. The AG said no.

Tennessee has two parallel statutory schemes for second-hand metal industries. The Scrap Metal Dealers Act (Tenn. Code Ann. §§ 62-9-101 to -113) covers people buying or dealing in scrap metal (iron, brass, wire, cable, copper, bronze, aluminum, platinum, lead, solder, steel, stainless steel, catalytic converters, and similar items, excluding recyclable aluminum cans). Scrap metal dealers register with the Tennessee Department of Commerce and Insurance.

The Scrap Jewelry and Metal Dealers Act of 1980 (Tenn. Code Ann. §§ 38-1-201 to -205) covers buyers and dealers in "antique, used or scrap jewelry and precious metals" being purchased for resale (in original form or as remounted, melted, reformed, remolded, recast, scrapped, or bulked). These dealers register locally, with the chief of police and the sheriff of each city and county where they do business.

The AG identified four supporting reasons. First, statutory construction: under Keough v. State, when one statute is general and another is specific to the same subject, the specific one controls. Second, legislative intent: the Scrap Metal Dealers Act's terms (HVAC contractor definitions, prohibitions on buying or selling utility-marked metal, restrictions on air conditioner coils) target industrial scrap metal, not jewelry. Third, the 2008 Public Chapter 690 that repealed and reenacted the junk-dealer/scrap-metal statutes did not touch the Scrap Jewelry and Metal Dealers Act, suggesting the legislature kept them separate on purpose. Fourth, subsequent legislative amendments in 2012 (Public Chapters 969 and 675) modified each scheme on its own terms without merging them.

The exception worth flagging: if a dealer buys both jewelry/precious metals and non-precious metals, then the dealer falls under both schemes and must register both with the local chief and sheriff (for the jewelry side) and with Commerce and Insurance (for the scrap metal side). The state-policy purpose for both schemes, according to State v. Kirkland, is to limit channels through which stolen property gets converted into cash, so each scheme imposes detailed record-keeping and holding-period requirements on its own track.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

The Scrap Metal Dealers Act (Title 62, Chapter 9)

§ 62-9-101(3) defines "scrap metal" as "any ferrous or nonferrous metal that is no longer used for its original purpose and is capable of being processed for reuse by a metal recycling facility, including, but not limited to, iron, brass, wire, cable, copper, bronze, aluminum, platinum, lead, solder, steel, stainless steel, catalytic converters or other similar obsolete ferrous or nonferrous metals," excluding recyclable aluminum cans. § 62-9-101(4) defines "scrap metal dealer" as a person who buys, exchanges, or deals in scrap metal (or their authorized agent). § 62-9-102(a) requires registration with the Department of Commerce and Insurance. §§ 62-9-103 to -108, -111, -112 set out record-keeping and acquisition requirements. § 62-9-106(a) and (c) prohibit purchases of scrap metal marked as belonging to public utilities. § 62-9-107 restricts AC coil purchases. § 39-14-406 (criminal trespass on construction sites and utility property) was also amended by the 2008 act.

The Scrap Jewelry and Metal Dealers Act of 1980 (Title 38, Chapter 1, Part 2)

§ 38-1-201(a) governs anyone "purchasing or otherwise dealing in antique, used or scrap jewelry and precious metals, where the purchase is for resale in its original form or as changed by remounting, melting, reforming, remolding or recasting or for resale as scrap or in bulk." Such dealers must register with the chief of police and sheriff of each city and county in which they operate. §§ 38-1-202 to -205 add detailed holding periods (30 days under § 38-1-202(a)) and recordkeeping rules.

Why the schemes don't overlap by default

The AG read the two schemes as governing different industries: scrap metal (industrial-type ferrous and nonferrous recyclables, channeled through metal-recycling facilities) versus scrap jewelry and precious metals (gold buyers, pawnbroker-adjacent jewelry purchasers, refiners). The structural differences support this:

• Different licensors (Commerce vs. local police/sheriff)
• Different holding periods (20 days minimum in pawn statutes, 30 days for scrap jewelry, varies in scrap metal)
• Different industrial-targeting features in the Scrap Metal Dealers Act (HVAC, utility-marked metal, AC coils)

The specific-controls-general canon

Keough v. State states the rule: "a special statute, or a special provision of a particular statute, will prevail over a general provision in another statute or a general provision in the same statute." So the more specific Scrap Jewelry and Metal Dealers Act controls for jewelry and precious metals, not the general Scrap Metal Dealers Act.

Legislative history

2008 Tenn. Pub. Acts ch. 690 reenacted the junk dealer and scrap metal provisions in Title 62, Chapter 9 but left Title 38, Chapter 1, Part 2 alone. 2012 Tenn. Pub. Acts ch. 969 expanded the Department of Commerce and Insurance's authority over scrap metal dealers (registration plus regulation, effective July 1, 2012). 2012 Tenn. Pub. Acts ch. 675 amended Title 28, Chapter 1, Part 2 on dealer holding periods for purchased scrap jewelry. None of these moves indicate any legislative intent to merge the two schemes.

Both schemes serve the same policy

State v. Kirkland (Tenn. 1983) describes the purpose of dealer-record statutes as limiting "channels through which thieves may safely convert stolen property into cash." Both registration regimes serve that policy through different means: scrap metal goes through a state agency with statewide records; jewelry goes through local police and sheriffs who can match dealer transaction records against local theft reports.

Common questions

I'm starting a gold-buying booth at the mall. Where do I register?
Under this opinion, with the chief of police and the sheriff of each city and county where the booth operates. Not with the Tennessee Department of Commerce and Insurance.

Does my pawn shop count as a scrap jewelry dealer?
This opinion addresses jewelry purchases for resale, not pawn loans. The follow-up opinion 12-101 addresses how the Scrap Jewelry and Metal Dealers Act interacts with the Pawnbrokers Act when a pawnbroker buys jewelry outright instead of taking it in pawn.

My business buys both copper wire and used gold rings. What do I do?
The AG says you fall under both schemes: register with Commerce and Insurance for the copper-wire side, and register with the local chief and sheriff for the jewelry side. Each scheme's holding-period and recordkeeping rules apply to the items it covers.

What are the recordkeeping rules I have to follow as a jewelry/precious-metals dealer?
The opinion does not enumerate them in detail. They appear in Tenn. Code Ann. §§ 38-1-202 to -205, which impose seller-identification, purchase-recordkeeping, and holding-period requirements before resale. The opinion describes the statutory purpose, citing State v. Kirkland, as limiting the channels through which stolen property is converted into cash.

Citations

Statutes:

• Tenn. Code Ann. §§ 38-1-201 to -205 (Scrap Jewelry and Metal Dealers Act of 1980)
• Tenn. Code Ann. § 38-1-201(a) (scope and local registration)
• Tenn. Code Ann. §§ 62-9-101 to -113 (Scrap Metal Dealers Act)
• Tenn. Code Ann. § 62-9-101(2)-(4) (definitions, including HVAC contractor)
• Tenn. Code Ann. § 62-9-102(a) (Commerce and Insurance registration)
• Tenn. Code Ann. §§ 62-9-103 to -108, -111, -112 (recordkeeping, acquisitions)
• Tenn. Code Ann. § 62-9-106(a), (c) (utility-marked metal restrictions)
• Tenn. Code Ann. § 62-9-107 (AC coil restrictions)
• Tenn. Code Ann. § 39-14-406 (criminal trespass on construction and utility property)
• 2008 Tenn. Pub. Acts ch. 690 (Title 62, Chapter 9 reenactment)
• 2012 Tenn. Pub. Acts ch. 969 (expanded Department authority over scrap metal dealers)
• 2012 Tenn. Pub. Acts ch. 675 (scrap jewelry holding period)

Cases:

• State v. Kirkland, 655 S.W.2d 140 (Tenn. 1983)
• State v. Barneff, 389 So.2d 352 (La. 1980)
• Keough v. State, 356 S.W.3d 366 (Tenn. 2011)
• Lind v. Beaman Dodge, Inc., 356 S.W.3d 889 (Tenn. 2011)
• Sallee v. Barrett, 171 S.W.3d 822 (Tenn. 2005)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-098.pdf

Original opinion text

S T A T E O F T E N N E S S E E
OFFICE OF THE
ATTORNEY GENERAL
PO BOX 20207
NASHVILLE, TENNESSEE 37202

October 29, 2012

Opinion No. 12-98

Regulation of Used Jewelry Purchasers Under Tennessee Law

QUESTION

Is a person who buys gold or other precious metals in the form of used jewelry required to register with the Department of Commerce and Insurance as a "scrap metal dealer" pursuant to Tenn. Code Ann. §§ 62-9-101 to -113?

OPINION

No. The regulation of scrap jewelry and precious metal dealers is not regulated by Tenn. Code Ann. §§ 62-9-101 to -113 but rather is governed by Tenn. Code Ann. §§ 38-1-201 to -205. Thus, buyers and dealers of scrap jewelry and precious metals must register with the chief of police and sheriff of each county in which they conduct such activity pursuant to Tenn. Code Ann. § 38-1-201(a).

ANALYSIS

Scrap metal dealers are regulated by Tenn. Code Ann. §§ 62-9-101 to -113. Tenn. Code Ann. § 62-9-101 defines "scrap metal" and "scrap metal dealer" as follows:

(3) "Scrap metal" means any ferrous or nonferrous metal that is no longer used for its original purpose and is capable of being processed for reuse by a metal recycling facility, including, but not limited to, iron, brass, wire, cable, copper, bronze, aluminum, platinum, lead, solder, steel, stainless steel, catalytic converters or other similar obsolete ferrous or nonferrous metals, but shall not include recyclable aluminum cans; and

(4) "Scrap metal dealer" means a person who buys, exchanges or deals in scrap metal or an employee or agent of that dealer who has the express or implied authority to buy, exchange or deal in scrap metal on behalf of the dealer.

Tenn. Code Ann. § 62-9-101(3) & (4). A scrap metal dealer is prohibited from engaging in the scrap metal business unless the dealer is registered with the Tennessee Department of Commerce and Insurance. Tenn. Code Ann. § 62-9-102(a). Scrap metal dealers must maintain detailed record keeping and comply with various other requirements governing the acquisition of scrap metal. See Tenn. Code Ann. §§ 62-9-103 to -108, -111, & -112. These statutory provisions are intended to closely scrutinize the trafficking in second-hand goods in order "to limit access to channels through which thieves may safely convert stolen property into cash." State v. Kirkland, 655 S.W.2d 140, 142 (Tenn. 1983) (quoting State v. Barneff, 389 So.2d 352, 356 (La. 1980)).

The regulatory scheme established by the General Assembly for dealers in scrap jewelry and precious metals differs in several aspects from the regulatory scheme for scrap metal dealers in Title 62, Chapter 9 of the Tennessee Code. The Scrap Jewelry and Metal Dealers Act, codified at Tenn. Code Ann. §§ 38-1-201 to -205, applies to those "purchasing or otherwise dealing in antique, used or scrap jewelry and precious metals." Tenn. Code Ann. § 38-1-201(a). Such dealers are required to register with the chief of police and sheriff of each city and county in which they conduct business. Id. Specifically, the statute provides that:

(a) Any person, firm, or corporation purchasing or otherwise dealing in antique, used or scrap jewelry and precious metals, where the purchase is for resale in its original form or as changed by remounting, melting, reforming, remolding or recasting or for resale as scrap or in bulk, shall be required to register with the chief of police and sheriff of each city and county in which the activity is carried on.

Id. Thus, unlike scrap metal dealers who are licensed by the Tennessee Department of Commerce and Insurance, dealers of scrap jewelry and precious metals must register with local law enforcement officials. Compare Tenn. Code Ann. § 38-1-201(a) with Tenn. Code Ann. § 62-9-102(a). Furthermore, although both types of dealers are subject to detailed record keeping and purchase/payment requirements, the specific regulatory conditions imposed on each type of dealer are quite different. Compare Tenn. Code Ann. §§ 62-9-102 to -105 & -107 to -112 with Tenn. Code Ann. §§ 38-1-202 to -205.

Where, as here, the General Assembly has enacted one general regulatory scheme for dealers of scrap metal and a more specific regulatory process for dealers of scrap jewelry and precious metals, the more specific procedures will control for scrap jewelry and precious metals dealers. See Keough v. State, 356 S.W.3d 366, 371 (Tenn. 2011) (stating the general rule of statutory construction that "a special statute, or a special provision of a particular statute, will prevail over a general provision in another statute or a general provision in the same statute").

Moreover, a review of both statutory schemes reveals a legislative intent to exclude dealers of scrap jewelry and precious metals from the law governing scrap metal dealers. The provisions dealing with scrap metal dealers are intended to apply to scrap metal relating to industrial-type materials rather than used or scrap jewelry and precious metals. See, e.g. Tenn. Code Ann. §§ 62-9-101(2) (including "licensed HVAC contractor" in Act's definitions); -106(a), (c) (prohibiting attempted purchase or sale of scrap metal marked as belonging to public utilities or cooperatives); -107 (specifying restrictions for purchasing air conditioner evaporator coils or condensers). Additionally, 2008 Tenn. Pub. Acts ch. 690 ("Chapter 690"), which repealed and reenacted a number of provisions concerning junk dealers, see Tenn. Code Ann. § 62-9-101, compiler's notes, also amended Tenn. Code Ann. § 39-14-406 to include criminal provisions for trespassing on construction sites and property owned by public and private utilities or telephone or electric cooperatives. Tenn. Code Ann. § 39-14-406(e).

Furthermore, the use of the phrases "scrap jewelry" and "precious metals" in the Scrap Jewelry and Metal Dealers Act indicates an intention for this statute to apply to metals other than basic industrial-type scrap metal. Additionally, Chapter 690 did not alter or amend any part of the already existing Scrap Jewelry and Metal Dealers Act. Similarly, none of the subsequent legislative amendments to either the Scrap Jewelry and Metal Dealers Act or to Chapter 690 evidence any intent that persons who buy gold or other precious metals in the form of used jewelry must register with the Department of Commerce and Insurance. See, e.g., 2012 Tenn. Pub. Acts 969 (amending Title 62, Chapter 9, Part 1, effective July 1, 2012, to authorize the Department of Commerce and Insurance to not only register but also to regulate scrap metal dealers); 2012 Tenn. Pub. Acts. 675 (amending Title 28, Chapter 1, Part 2, in regard to the time frame that dealers must hold purchased scrap jewelry).

In sum, dealers in scrap jewelry and precious metals must comply with the Scrap Jewelry and Metal Dealers Act and are not subject to the laws governing scrap metal dealers unless they are also in the business of purchasing and selling non-precious metals, in which case they would be required to comply with both statutes for the type of metal covered by each. This conclusion comports with the general rule that, in ascertaining legislative intent, statutes must be read in conjunction with their surrounding parts and, if possible, these component parts should be construed consistently and reasonably. See Lind v. Beaman Dodge, Inc., 356 S.W.3d 889, 897 (Tenn. 2011); Sallee v. Barrett, 171 S.W.3d 822, 828 (2005).

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

STEVEN A. HART
Special Counsel

Requested by:
Commissioner Julie Mix McPeak
Tennessee Department of Commerce and Insurance
500 James Robertson Parkway
Nashville, TN 37243