Colorado has a new law on the books for junk dealers and scrap yards, and it centers on a word that's about to matter a lot: cash. HB26-1101, "Criminal Offenses Related to Critical Infrastructure Metals," was introduced by Representatives Cecelia Espenoza and Matt Soper along with Senators William Lindstedt and Byron Pelton, cleared both chambers with strong bipartisan votes, and was signed into law on May 7, 2026. It takes effect August 12, 2026.
The Cash Restriction
The core of the bill is a payment rule aimed squarely at yards. Any owner, keeper, or proprietor of a junk shop, junk store, salvage yard, or junk cart, along with every collector or dealer of junk, salvage, or other secondhand property, is prohibited from paying cash to a seller of critical infrastructure material. There are exactly two ways around that restriction: the seller is paid through a process that captures a photograph of them at the time of payment, or the transaction is worth less than $300.
No cash for critical infrastructure material unless the seller is photographed as part of the payment process, or the sale is under $300. Effective August 12, 2026.
"Critical infrastructure material" covers the commodity metals that show up in utility, telecom, and transportation equipment, the kind of material that causes outages and public safety problems when it's stripped and sold for scrap. Colorado isn't the first state to restrict cash for this category, but the photograph-or-under-$300 structure is a specific compliance line every buyer now has to build into their intake process.
Records Have to Be Ready for Inspection
Unlike some other states that require dealers to upload transaction photos and seller information directly to a statewide police database, HB26-1101 doesn't currently create that kind of mandatory reporting portal. What it does require is that dealer records, including the documentation tied to each critical infrastructure material purchase, be kept and made available for inspection when law enforcement asks. In practice, that means your yard needs to be able to produce a clean, complete record on demand, not scrambling through paper tickets or disconnected systems when an officer walks in.
Possession, Affidavits, and Penalties
The bill also creates new rules around unlawful possession of critical infrastructure material, requiring sellers to provide affidavits establishing where the material came from. Penalties scale with the value involved: a class 2 misdemeanor for material valued under $2,000, stepping up to a class 6 felony at $2,000 and above. The same tiered structure applies to failing to report discovered stolen material. Separately, the bill enhances theft penalties so that stealing commodity metal worth $2,000 or more is treated as a felony.
What This Means for Your Yard
If you buy critical infrastructure material in Colorado, cash is off the table for any transaction of $300 or more unless you're photographing the seller as part of the payout. That leaves two practical paths for compliance: pay by check, or pay by debit card through a process that captures the seller's photo at the point of payment. Either way, you need a system that ties the payment method, the photo, and the transaction record together automatically, and keeps that record ready to hand over the moment an officer asks to see it.
Built for a Cashless Transaction
ScrapRight already gives you compliant, non-cash ways to pay for critical infrastructure material, so HB26-1101 doesn't mean rebuilding your intake process from scratch:
- Instant Debit Card Payouts. ScrapRight's integration with Onbe pays sellers instantly to a reloadable card, no bank account required, and keeps the transaction fully documented as a non-cash payment.
- Check Payments. For yards that prefer to keep paying by check, ScrapRight logs and ties the check to the ticket the same way it does every other payment type, giving you a documented alternative to cash.
- Photo Capture at the Ticket. ScrapRight can capture a photo of the seller as part of the transaction, satisfying the law's photograph condition without adding a separate manual step for your scale house staff.
- Records Ready for Inspection. Every transaction is logged with seller info, payment method, photo, and material detail in one place, so when an officer asks to see your records, you're not digging for them.