[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3713 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3713

    To amend the Motor Vehicle Information and Cost Savings Act to 
  establish certain safeguards for the protection of purchasers with 
  respect to the sale of motor vehicles that are salvage or have been 
   damaged, to require inspection of salvage vehicles that have been 
 repaired in order to prevent the sale of unsafe vehicles or vehicles 
               with stolen parts, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 22, 1993

  Mr. Wheat introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
    To amend the Motor Vehicle Information and Cost Savings Act to 
  establish certain safeguards for the protection of purchasers with 
  respect to the sale of motor vehicles that are salvage or have been 
   damaged, to require inspection of salvage vehicles that have been 
 repaired in order to prevent the sale of unsafe vehicles or vehicles 
               with stolen parts, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND REFERENCE.

    (a) Short Title.--This Act may be cited as the ``Salvage Vehicle 
Title Reform and Highway Safety Act''.
    (b) Reference.--Whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Motor Vehicle Information and Cost Savings Act.

SEC. 2. RESTRUCTURE.

    Title IV (15 U.S.C. 1981-1991) is amended--
            (1) by amending the title heading to read as follows:

        ``TITLE IV--ODOMETER AND DAMAGED VEHICLE REQUIREMENTS'',

            (2) by inserting after the title heading the following:

            ``Part A--Findings and Purpose and Definitions''

            (3) by redesignating sections 403 through 408 as sections 
        405 through 410, respectively, by redesignating sections 409 
        through 416 as sections 425 through 432, respectively, by 
        repealing sections 419 and 420 and by redesignating sections 
        417 and 418 as sections 435 and 436, respectively.
            (4) by inserting after section 402 the following:

                   ``Part B--Odometer Requirements'',

            (5) by inserting after section 410 (as so redesignated) the 
        following:

         ``Part C-- Salvage and Damaged Vehicle Requirements'',

            (6) by inserting after section 420 (added by section 5) the 
        following:

                        ``Part D--Enforcement'',

            (7) by inserting after section 432 (as so redesignated) the 
        following:

                     ``Part E--Miscellaneous'', and

            (8) in section 427(a)(2) (as so redesignated), by striking 
        out ``409'' and inserting in lieu thereof ``425'', in section 
        431 (as so redesignated), by striking out ``414'' each place it 
        appears and inserting in lieu thereof ``430'', and in section 
        432 (as so redesignated), by striking out ``414'' and inserting 
        in lieu thereof ``430''.

SEC. 3. FINDINGS AND PURPOSE.

    Section 401 (15 U.S.C. 1981) is amended--
            (1) by striking out ``The Congress'' and inserting in lieu 
        thereof ``(a)(1) For purposes of part B, the Congress'',
            (2) by inserting after the first sentence the following:
    ``(2) For purposes of part C, the Congress finds that--
            ``(A) the salvage and damage history of a motor vehicle is 
        important in assisting a purchaser to determine its safety, 
        value, and reliability;
            ``(B) the rebuilding of salvage vehicles bears resemblance 
        in principle to the manufacture of motor vehicles and as such 
        requires oversight to prevent the sale and operation on the 
        nation's highways of unsafe rebuilt motor vehicles;
            ``(C) the switching of parts and vehicle identification 
        numbers between salvage vehicles and stolen motor vehicles is 
        an important means of profitable disposal of stolen motor 
        vehicles; and
            ``(D) purchasers of motor vehicles are entitled to 
        information with respect to the salvage and damage history of 
        motor vehicles.''; and
            (3) by amending the last sentence to read as follows:
    ``(b)(1) It is the purpose of part B to prohibit tampering with 
odometers on motor vehicles and to establish certain safeguards for the 
protection of purchasers with respect to the sale of motor vehicles 
having altered or reset odometers.
    ``(2) It is the purpose of part C to establish certain safeguards 
with respect to the sale of motor vehicles that are salvage or have 
been damaged and to require inspection of salvage vehicles that have 
been repaired in order to prevent the sale of unsafe vehicles or 
vehicles incorporating stolen parts.''.

SEC. 4. DEFINITIONS.

    Section 402 (15 U.S.C. 1982) is amended by adding at the end the 
following:
            ``(9) The term `motor vehicle' means a motor vehicle as 
        defined in section 2(15) but it does not include--
                    ``(A) a motor vehicle that is more than 25 years 
                old;
                    ``(B) a motor vehicle that is not self-propelled; 
                or
                    ``(C) a motor vehicle sold directly by the 
                manufacturer to any agency of the United States in 
                conformity with contractual specifications for as long 
                as the motor vehicle is owned by the United States.
            ``(10) The term `actual cost' when used in connection with 
        motor vehicle repairs means the price paid for repairs or the 
        fair market value of the repairs needed to return a motor 
        vehicle to its undamaged condition, whichever is greater.
            ``(11) The term `salvage vehicle' means a motor vehicle 
        that has been damaged and that meets or at any time in the past 
        has met either of the following criteria:
                    ``(A) An insurance company has determined that it 
                is economically impractical to repair the damaged motor 
                vehicle and has made with respect to the motor vehicle 
                an agreed settlement with the insured or claimant.
                    ``(B) The estimated or the actual cost of repairing 
                the damaged motor vehicle, whichever is greater, 
                exceeds 65 percent of the fair market value of the 
                motor vehicle immediately before it was damaged.''.

SEC. 5. DISCLOSURE REQUIREMENTS.

    Title IV (15 U.S.C. 1981-1991) is amended by inserting after the 
heading for part C (as added by section 2(5)) the following:
    ``Sec. 415. (a)(1) Not later than 180 days after the date of the 
enactment of this part, the Secretary shall prescribe rules requiring 
any transferor to give the following written and notarized disclosure 
to the transferee in connection with the transfer of ownership of a 
motor vehicle:
            ``(A) Whether the motor vehicle is a salvage vehicle.
            ``(B) Whether the motor vehicle has on any occasion during 
        or before the time that it was owned by the transferor suffered 
        major damage.
            ``(C) The nature and the amount of damage sustained on each 
        occasion referred to in subparagraph (B), the year the damage 
        was sustained, and the identity of the person who owned the 
        motor vehicle at the time of the damage.
    ``(2) The rules under paragraph (1) shall prescribe the manner in 
which the information shall be disclosed and shall be retained and 
shall require that the original of the disclosure shall be attached to 
the title of such motor vehicle, except that if the title conforms to 
the requirements of section 416(b), the disclosure shall be placed on 
the title.
    ``(3) The rules under paragraph (1) shall also provide a definition 
of the term `major damage'. The Secretary shall provide such definition 
after consultation with representatives of law enforcement agencies, 
the States, industry, and consumers. In establishing such definition 
the Secretary shall give priority to making the definition simple and 
readily understandable to ordinary consumers and to ensuring coverage 
of damage that may significantly affect the safety or value of a 
vehicle and shall give consideration to the costs or the amount of 
effort required to provide disclosure of damage.
    ``(b)(1) In the case of any leased motor vehicle, the rules under 
subsection (a) shall require the lessee of the motor vehicle to make 
the disclosure required by such rules to the lessor of the motor 
vehicle before the lessor transfers ownership of the leased motor 
vehicle.
    ``(2) Under such rules the lessor of a leased motor vehicle shall 
provide written notice to the lessee regarding--
            ``(A) such salvage and damage history disclosure 
        requirement, and
            ``(B) the penalties for failure to comply with such 
        requirement.
    ``(3) The lessor shall retain the disclosures made by any lessee 
with respect to any motor vehicle under paragraph (1) for a period of 
at least 4 years following the date the lessor transfers ownership of 
such motor vehicle.
    ``(4) If the lessor transfers ownership of any leased motor vehicle 
without obtaining possession of such motor vehicle, the lessor may, in 
making the disclosure required by subsection (a), indicate the 
information disclosed by the lessee under paragraph (1) unless the 
lessor has reason to believe that such disclosure by the lessee does 
not reflect the actual salvage and damage history of the vehicle.
    ``(c) No transferor, lessor, or lessee of a leased motor vehicle 
shall violate any rule promulgated under subsection (a) or give a false 
statement to a transferee or lessor, as the case may be, in making any 
disclosure required by such rule.
    ``(d) No transferee who, for purposes of resale, acquires ownership 
of a motor vehicle--
            ``(1) shall fail to obtain, in connection with the 
        transfer, any written disclosure required to be given to the 
        transferee under the rules promulgated under subsection (a), or
            ``(2) shall accept any disclosure if such disclosure is 
        incomplete.

                         ``motor vehicle sales

    ``Sec. 416. (a) A dealer or distributor who sells a motor vehicle 
to a person who in good faith purchases the motor vehicle for purposes 
other than resale shall--
            ``(1) show the original or a copy of--
                    ``(A) the motor vehicle title, and
                    ``(B) any disclosure required to be made with 
                respect to such motor vehicle under section 415(a),
        to the purchaser before the sale, and
            ``(2) provide the title and such disclosures, including 
        copies of the title or such disclosure, to the purchaser at the 
        time of the sale.
    ``(b) If any motor vehicle is sold at an auction, the auction 
company which conducts such auction shall establish and maintain for a 
period of at least 4 years following the date of such sale records 
showing whether any disclosure made in accordance with section 415(a) 
indicates whether the motor vehicle was salvage or had been damaged.

                          ``title requirements

    ``Sec. 417. (a) Not later than 90 days after the date of the 
enactment of this part, the Secretary shall prescribe rules requiring 
that any motor vehicle the ownership of which is transferred may not be 
licensed for use in any State unless--
            ``(1) the transferee in submitting an application to a 
        State for the title upon which such license will be issued 
        includes with such application both the existing title or 
        manufacturer's statement of origin and any disclosure made by a 
        transferor under section 415(a) that has been delivered to the 
        transferee, and
            ``(2) the title issued by the State to such transferee 
        following such transfer shows on its face in conspicuous and 
        plain wording--
                    ``(A) whether any `salvage', `rebuilt', 
                `reconstructed', `flood damaged', `junk', or similar 
                label or indication was shown on the title surrendered 
                by the transferee to the State or on any title 
                previously issued for the motor vehicle;
                    ``(B) the substance of all such labels and 
                indications;
                    ``(C) the name of any State previously issuing a 
                title for the motor vehicle showing such a label or 
                indication; and
                    ``(D) whether any disclosure pursuant to section 
                415(a) or other documentation received by such State 
                has shown that the motor vehicle is a salvage vehicle 
                or has suffered damage as described in section 
                415(a)(1)(B).
In determining whether any title was previously issued for a motor 
vehicle with such label or indication as described in subparagraph (A) 
or whether any disclosure or documentation as described in subparagraph 
(D) has been received, a State shall make use of all information that 
is both available to such State and retrievable without substantial 
labor or delay.
    ``(b) Not later than 180 days after the date of the enactment of 
this part, the Secretary shall prescribe rules requiring that any motor 
vehicle, the ownership of which is transferred after 2\1/2\ years after 
the date of the enactment of this part, may not be licensed for use in 
any State unless the title which is issued by such State to the 
transferee--
            ``(1) indicates all disclosures required to be made for 
        such motor vehicle under section 415(a);
            ``(2) contains a space for the transferee to provide such 
        disclosures in the event of a future transfer of ownership and 
        for the transferee to sign and date such disclosures before a 
        notary; and
            ``(3) contains on its face a written statement, in addition 
        to any statement required by subsection (a)(2), reciting in 
        conspicuous and plain wording the substance of any disclosure 
        under section 415(a) that has been delivered to the State or 
        passed on to the State on the face of previous titles.
    ``(c) The rule promulgated under subsection (b) shall require each 
State--
            ``(1) to maintain copies of--
                    ``(A) all motor vehicle titles and title 
                applications, and
                    ``(B) all disclosures required to be made under 
                section 415(a) which are delivered to the State,
        as part of the title history for motor vehicles for a period of 
        at least 10 years from the date such documents are received, 
        and
            ``(2) to make a complete copy of the title history for any 
        motor vehicle available, upon written request, within 21 days 
        of the request for a fee to any person who provides to the 
        State the vehicle identification number of such motor vehicle.
The fee under paragraph (2) shall be a reasonable charge but not more 
than the actual cost of making a copy of a title history. A State may 
require a person requesting a title history under paragraph (2) to 
certify that the title history is requested for reasons related to the 
purposes of this part.

                             ``settlements

    ``Sec. 418. Whenever an insurance company makes a settlement on a 
motor vehicle as a result of major damage, the insurance company shall 
give notice to the motor vehicle's owner at the time of the settlement 
of the disclosure requirements of section 415.

                           ``salvage vehicles

    ``Sec. 419. (a) Not later than 180 days after the date of the 
enactment of this part, the Secretary shall prescribe rules requiring 
that any salvage vehicle, the ownership of which is transferred after 
one year after such date of enactment, may not be licensed for use in 
any State unless after being repaired the salvage vehicle has been 
inspected, by a person licensed by the State where the inspection is 
performed under a program approved by the Secretary, to check for 
safety defects and, beginning February 1, 1996, to check for stolen 
parts. Such rule shall provide--
            ``(1) the minimum safety standards for repaired salvage 
        vehicles,
            ``(2) the minimum steps and inquiry to be undertaken during 
        any such inspection,
            ``(3) that such inspections shall be at the expense of the 
        owners of the salvage vehicles,
            ``(4) the manner in which information relating to 
        inspections shall be retained,
            ``(5) the minimum requirements for any person to be 
        licensed as an inspector,
            ``(6) the manner in which information relating to licensing 
        of inspectors shall be retained,
            ``(7) that any program for inspection shall be subject to 
        the continuing review and approval of the Secretary, and
            ``(8) that any inspector licensed by any State shall be 
        subject to section 430(b) to the same extent as a dealer or 
        distributor.
    ``(b) The fact that a motor vehicle has been inspected under 
subsection (a) shall not be admissible as evidence in any legal 
proceeding for the purpose of showing--
            ``(1) that the motor vehicle was in fact safe or did not 
        contain stolen parts, or
            ``(2) that any person reasonably believed that the motor 
        vehicle was safe or did not contain stolen parts.

                              ``conspiracy

    ``Sec. 420. No person shall conspire with any other person to 
violate section 415, 416, 417, 418, or 419.''.

SEC. 6. CONFORMING AMENDMENTS.

    (a) Private Civil Action.--Subsection (a) of section 425 (as so 
redesignated) (15 U.S.C. 1989) is amended to read as follows:
    ``(a) Any person who, with intent to defraud, violates or 
participates in violating any requirement imposed under part B or C 
shall be liable--
            ``(1) jointly and severally with any other such violator 
        for actual damages sustained;
            ``(2) separately and individually for twice the actual 
        damages, punitive damages, or $5,000, whichever is greater; and
            ``(3) in the case of any successful action to enforce the 
        foregoing liability jointly and severally with any other such 
        attorney fees as determined by the court.
The failure of a dealer, distributor, or lessor to exercise reasonable 
care in confirming the accuracy of any disclosure it receives or gives 
under section 410 or 415 shall be prima facie evidence of an intent to 
defraud on claims relating to a violation of the requirements of this 
part.''.
    (b) Preemption.--Section 436 (as so redesignated) (15 U.S.C. 1991) 
is amended by striking out ``or'' at the end of paragraph (1), by 
redesignating paragraph (2) as paragraph (3), and by inserting after 
paragraph (1) the following:
            ``(2) annul, alter, or affect the laws of any State with 
        respect to the disclosure of salvage or damage history of a 
        motor vehicle or with respect to the inspection of a motor 
        vehicle, or''.
    (c) Technical Amendments.--
            (1) Section 410(b).--Subsection (b) of section 410 (as so 
        redesignated) (15 U.S.C. 1988) is amended--
                    (A) by striking ``transferor'' and inserting 
                ``transferor of a motor vehicle or lessor or lessee of 
                a leased motor vehicle''; and
                    (B) by striking ``to a transferee'' and inserting 
                ``to a transferee or lessor, as the case may be,''.
            (2) Section 410(c).--Subsection (c) of section 410 (as so 
        redesignated) (15 U.S.C. 1988) is amended--
                    (A) by striking ``shall accept'' and inserting 
                ``shall fail to obtain, in connection with the 
                transfer,'';
                    (B) by striking ``required by'' and inserting 
                ``required to be given to the transferee under'';
                    (C) by striking ``under this section'' and 
                inserting ``under subsection (a)''; and
                    (D) by striking ``if such disclosure'' and 
                inserting ``or shall accept any disclosure if such 
                disclosure''.
            (3) Section 410(e).--Subsection (e) of section 410 (19 
        U.S.C. 1988) is amended--
                    (A) in paragraph (1), by striking ``rules'' and 
                inserting ``rules'' and by striking ``upon the'' and 
                inserting ``before the''; and
                    (B) in paragraph (4), by striking ``on the title'' 
                and by striking ``For purposes of this section, if'' 
                and inserting ``If''.

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HR 3713 IH----2