[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[Senate]
[Pages S9573-S9577]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LOTT (for himself and Mr. Exon):
  S. 2030. A bill to establish nationally uniform requirements 
regarding the titling and registration of salvage, nonrepairable, and 
rebuilt vehicles, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


    the national motor vehicle safety, antitheft, title reform, and 
                    consumer protection act of 1996

  Mr. LOTT. Mr. President, I rise today to introduce legislation to 
establish national requirements regarding the titling and registration 
of salvage, nonrepairable and rebuilt vehicles. I am proud to have 
Senator Exon as my principle cosponsor on this bipartisan bill. Senator 
Exon has done yeoman's work in previous Congresses to address this 
issue.
  Several years ago, Congress formed a group to study this issue. My 
bill responds to the recommendations made by that Federal task force 
regarding the disclosure of vehicle conditions. This consumer safety 
bill will protect used car consumers from unknowingly purchasing 
rebuilt automobiles that have not been restored to safe operating 
conditions. The legislation requires the vehicle title to be branded to 
show that it has been totaled.
  This legislation would create a uniform national policy concerning 
the disclosure of vehicle conditions. Forty-eight States require some 
sort of disclosure on the vehicle title. Insistency among these States, 
however, permits those unscrupulous few to take advantage of 
unsuspecting consumers.
  I hope my colleagues in the Senate will join me as cosponsors of this 
legislation, which addresses this consumer safety issue in a direct and 
straightforward manner.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2030

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``National Motor Vehicle 
     Safety, Antitheft, Title Reform, and Consumer Protection Act 
     of 1996''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) many States do not have specific requirements regarding 
     the disclosure of the salvage history of a motor vehicle and 
     some States never require that the title to a motor vehicle 
     be stamped or branded to indicate that the motor vehicle is, 
     or has been, a salvage vehicle;
       (2) as of the date of enactment of this Act, State 
     disclosure requirements regarding the salvage history of a 
     motor vehicle--
       (A) are inconsistent in scope and content;
       (B) require the use of different forms and administrative 
     procedures;
       (C) will undercut the effectiveness of the National 
     Automobile Title Information System created by the Anti Car 
     Theft Act of 1992;
       (D) are burdensome on interstate commerce; and
       (E) do not provide a significant deterrent to unscrupulous 
     sellers of rebuilt vehicles who mislead potential wholesale 
     and retail buyers concerning the condition and value of such 
     vehicles;
       (3) the fact that a motor vehicle is salvage, 
     nonrepairable, water damaged, or rebuilt after incurring 
     substantial damage is material in any subsequent purchase or 
     sale of that motor vehicle;
       (4) some salvage and nonrepairable vehicles become involved 
     in illegal commerce in stolen vehicles and parts;
       (5) in some jurisdictions, the lack of theft inspections 
     prior to allowing a rebuilt motor vehicle back on the road 
     provides an opportunity for an unscrupulous person to use 
     stolen parts in the rebuilding of motor vehicles;
       (6) according to the National Highway Traffic Safety 
     Administration, rebuilt motor vehicles--
       (A) may not have passed any safety inspection; and
       (B) may pose a public safety risk and consumers who 
     unknowingly buy rebuilt motor vehicles face an increased risk 
     of death or serious injury;
       (7) statistics prepared by the American Association of 
     Motor Vehicle Administrators indicate that 71 percent of the 
     States require some form of safety inspection before a 
     rebuilt salvage vehicle may be registered for use on the 
     road;
       (8) the promulgation of a safety inspection program by the 
     Secretary of Transportation may assist the States in 
     expanding and standardizing their inspection programs for 
     rebuilt vehicles;
       (9) duplicate or replacement titles play an important role 
     in many vehicle thefts and various types of vehicle fraud;
       (10) State controls on the issuance of such titles must 
     therefore be strengthened and made uniform across the United 
     States;
       (11) large quantities of motor vehicles are exported from 
     United States ports to foreign countries without proper 
     documentation of ownership in violation of applicable law; 
     and
       (12) in view of the threats to public safety and consumer 
     interests described in paragraphs (1) through (10), the Motor 
     Vehicle Titling, Registration and Salvage Advisory Committee, 
     which was convened by the Secretary of Transportation under 
     section 140(a) of the Anti Car Theft Act of 1992 (15 U.S.C. 
     2041 note), recommended that--
       (A) Federal laws be enacted to require certain definitions 
     to be used nationwide to describe seriously damaged vehicles; 
     and
       (B) all States be required to--
       (i) use the definitions referred to in subparagraph (A) in 
     determining appropriate title designations;
       (ii) use certain motor vehicle titling and control methods; 
     and
       (iii) take certain other measures to protect the integrity 
     of the titling process.

     SEC. 3. MOTOR VEHICLE TITLING AND DISCLOSURE REQUIREMENTS.

       (a) In General.--Subtitle VI of title 49, United States 
     Code, is amended by adding at the end the following new 
     chapter:

   ``CHAPTER 333--AUTOMOBILE SAFETY, ANTITHEFT, AND TITLE DISCLOSURE 
                              REQUIREMENTS

``Sec.
``33301. Definitions.
``33302. Passenger motor vehicle titling.
``33303. Petitions for extensions of time.
``33304. Effect on State law.
``33305. Civil and criminal penalties.

     ``Sec. 33301. Definitions

       ``For the purposes of this chapter the following 
     definitions and requirements shall apply:
       ``(1) Passenger motor vehicle.--
       ``(A) In general.--The term `passenger motor vehicle' means 
     any vehicle driven or drawn by mechanical power manufactured 
     primarily for use on the public streets, roads, and highways.
       ``(B) Passenger motor vehicles and light trucks included.--
     Such term includes a multipurpose passenger vehicle or light 
     duty truck if the vehicle or truck is rated at not more than 
     7,500 pounds gross vehicle weight.
       ``(C) Motorcycles not included.--Such term does not include 
     a motorcycle.
       ``(2) Salvage vehicle.--
       ``(A) In general.--Subject to subparagraph (E), the term 
     `salvage vehicle' means any passenger motor vehicle that has 
     been wrecked, destroyed, or damaged to the extent that the 
     total estimated or actual cost of parts and labor to rebuild 
     or reconstruct the passenger motor vehicle to its preaccident 
     condition for legal operation on the roads or highways 
     exceeds 75 percent of the retail value of the passenger motor 
     vehicle, as set forth in the most recent edition of any 
     nationally recognized compilation (including automated 
     databases) of current retail values that is approved by the 
     Secretary.
       ``(B) Vehicles excluded.--Such term does not include any 
     passenger motor vehicle that has a model year designation of 
     a calendar year that precedes that calendar year in which the 
     vehicle was wrecked, destroyed, or damaged by 5 or more 
     years.
       ``(C) Determination of value of repair parts.--For purposes 
     of subparagraph (B), the value of repair parts shall be 
     determined by using--
       ``(i) the published retail cost of the original equipment 
     manufacturer parts; or
       ``(ii) the actual retail cost of the repair parts to be 
     used in the repair.
       ``(D) Determination of labor costs.--For purposes of 
     subparagraph (B), the labor cost of repairs shall be computed 
     by using the hourly labor rate and time allocations that are 
     reasonable and customary in the automobile repair industry in 
     the community in which the repairs are performed.
       ``(E) Certain vehicles included.--The term `passenger 
     vehicle' includes, without regard to whether the passenger 
     motor vehicle meets the 75 percent threshold specified in 
     subparagraph (B)--
       ``(i) any passenger motor vehicle with respect to which an 
     insurance company acquires ownership under a damage 
     settlement (except for a settlement in connection with a 
     recovered theft vehicle that did not sustain a sufficient 
     degree of damage to meet the 75 percent threshold specified 
     in subparagraph (B)); or
       ``(ii) any passenger motor vehicle that an owner may wish 
     to designate as a salvage vehicle by obtaining a salvage 
     title, without regard to the extent of the damage and 
     repairs.
       ``(F) Special rule.--A designation of a passenger motor 
     vehicle by an owner under subparagraph (E)(ii) shall not 
     impose any obligation on--
       ``(i) the insurer of the passenger motor vehicle; or
       ``(ii) an insurer processing a claim made by or on behalf 
     of the owner of the passenger motor vehicle.
       ``(3) Salvage title.--
       ``(A) In general.--The term `salvage title' means a 
     passenger motor vehicle ownership document issued by a State 
     to the owner of a salvage vehicle.
       ``(B) Transfer of ownership.--Ownership of a salvage 
     vehicle may be transferred on a salvage title.
       ``(C) Prohibition.--The salvage vehicle may not be 
     registered for use on the roads or

[[Page S9575]]

     highways unless the salvage vehicle has been issued a rebuilt 
     salvage title.
       ``(D) Requirement for a rebuilt salvage title.--A salvage 
     title shall be conspicuously labeled with the word `salvage' 
     across the front of the document.
       ``(4) Rebuilt salvage vehicle.--The term `rebuilt salvage 
     vehicle' means--
       ``(A) for passenger motor vehicles subject to a safety 
     inspection in a State that requires such an inspection under 
     section 33302(b)(2)(H), any passenger motor vehicle that 
     has--
       ``(i) been issued previously a salvage title;
       ``(ii) passed applicable State antitheft inspection;
       ``(iii) been issued a certificate indicating that the 
     passenger motor vehicle has--

       ``(I) passed the antitheft inspection referred to in clause 
     (ii); and
       ``(II) been issued a certificate indicating that the 
     passenger motor vehicle has passed a required safety 
     inspection under section 33302(b)(2)(H); and

       ``(iv) affixed to the door jamb adjacent to the driver's 
     seat a decal stating `Rebuilt Salvage Vehicle--Antitheft and 
     Safety Inspections Passed'; or
       ``(B) for passenger motor vehicles in a State other than a 
     State referred to in subparagraph (A), any passenger motor 
     vehicle that has--
       ``(i) been issued previously a salvage title;
       ``(ii) passed an applicable State antitheft inspection;
       ``(iii) been issued a certificate indicating that the 
     passenger motor vehicle has passed the required antitheft 
     inspection referred to in clause (ii); and
       ``(iv) affixed to the door jamb adjacent to the driver's 
     seat, a decal stating `Rebuilt Salvage Vehicle--Antitheft 
     Inspection Passed/No Safety Inspection Pursuant to National 
     Criteria'.
       ``(5) Rebuilt salvage title.--
       ``(A) In general.--The term `rebuilt salvage title' means 
     the passenger motor vehicle ownership document issued by a 
     State to the owner of a rebuilt salvage vehicle.
       ``(B) Transfer of ownership.--Ownership of a rebuilt 
     salvage vehicle may be transferred on a rebuilt salvage 
     title.
       ``(C) Registration for use.--A passenger motor vehicle for 
     which a rebuilt salvage title has been issued may be 
     registered for use on the roads and highways.
       ``(D) Requirement for salvage title.--A rebuilt salvage 
     title shall be conspicuously labeled, either with `Rebuilt 
     Salvage Vehicle--Antitheft and Safety Inspections Passed' or 
     `Rebuilt Salvage Vehicle--Antitheft Inspection Passed/No 
     Safety Inspection Pursuant to National Criteria', as 
     appropriate, across the front of the document.
       ``(6) Nonrepairable vehicle.--
       ``(A) In general.--The term `nonrepairable vehicle' means 
     any passenger motor vehicle that--
       ``(i)(I) is incapable of safe operation for use on roads or 
     highways; and
       ``(II) has no resale value, except as a source of parts or 
     scrap only; or
       ``(ii) the owner irreversibly designates as a source of 
     parts or scrap.
       ``(B) Certificate.--Each nonrepairable vehicle shall be 
     issued a nonrepairable vehicle certificate.
       ``(7) Nonrepairable vehicle certificate.--
       ``(A) In general.--The term `nonrepairable vehicle 
     certificate' means a passenger motor vehicle ownership 
     document issued by the State to the owner of a nonrepairable 
     vehicle.
       ``(B) Transfer of ownership.--Ownership of the passenger 
     motor vehicle may be transferred not more than 2 times on a 
     nonrepairable vehicle certificate.
       ``(C) Prohibition.--A nonrepairable vehicle that is issued 
     a nonrepairable vehicle certificate may not be titled or 
     registered for use on roads or highways at any time after the 
     issuance of the certificate.
       ``(D) Requirement for nonrepairable vehicle certificate.--A 
     nonrepairable vehicle certificate shall be conspicuously 
     labeled with the term `Nonrepairable' across the front of the 
     document.
       ``(8) Flood vehicle.--
       ``(A) In general.--The term `flood vehicle' means any 
     passenger motor vehicle that has been submerged in water to 
     the point that rising water has reached over the door sill of 
     the motor vehicle and has entered the passenger or trunk 
     compartment.
       ``(B) Requirement for disclosure.--Disclosure that a 
     passenger motor vehicle has become a flood vehicle shall be 
     made by the person transferring ownership at the time of 
     transfer of ownership. After such transfer is completed, the 
     certificate of title shall be conspicuously labeled with the 
     term `flood' across the front of the document.
       ``(9) Secretary.--The term `Secretary' means the Secretary 
     of Transportation.

     ``Sec. 33302. Passenger motor vehicle titling

       ``(a) Carryforward of Certain Title Information if a 
     Previous Title Was Not Issued in Accordance With Certain 
     Nationally Uniform Standards.--
       ``(1) In general.--If--
       ``(A) records that are readily accessible to a State 
     indicate that a passenger motor vehicle with respect to which 
     the ownership is transferred on or after the date that is 1 
     year after the date of enactment of the National Motor 
     Vehicle Safety, Antitheft, Title Reform, and Consumer 
     Protection Act of 1996, has been issued previously a title 
     that bore a term or symbol described in paragraph (2); and
       ``(B) the State licenses that vehicle for use,
     the State shall disclose that fact on a certificate of title 
     issued by the State.
       ``(2) Terms and symbols.--
       ``(A) In general.--A State shall be subject to the 
     requirements of paragraph (1) with respect to the following 
     terms on a title that has been issued previously to a 
     passenger motor vehicle (or symbols indicating the meanings 
     of those terms):
       ``(i) `Salvage'.
       ``(ii) `Unrebuildable'.
       ``(iii) `Parts only'.
       ``(iv) `Scrap'.
       ``(v) `Junk'.
       ``(vi) `Nonrepairable'.
       ``(vii) `Reconstructed'.
       ``(viii) `Rebuilt'.
       ``(ix) Any other similar term, as determined by the 
     Secretary.
       ``(B) Flood damage.--A State shall be subject to the 
     requirements of paragraph (1) if a term or symbol on a title 
     issued previously for a passenger vehicle indicates that the 
     vehicle has been damaged by flood.
       ``(b) Nationally Uniform Title Standards and Control 
     Methods.--
       ``(1) In general.--Not later than 18 months after the date 
     of the enactment of the National Motor Vehicle Safety, 
     Antitheft, Title Reform, and Consumer Protection Act of 1996, 
     the Secretary shall issue regulations that require each State 
     that licenses passenger motor vehicles with respect to which 
     the ownership is transferred on or after the date that is 2 
     years after the issuance of final regulations, to apply with 
     respect to the issuance of the title for any such motor 
     vehicle uniform standards, procedures, and methods for--
       ``(A) the issuance and control of that title; and
       ``(B) information to be contained on such title.
       ``(2) Contents of regulations.--The titling standards, 
     control procedures, methods, and information covered under 
     the regulations issued under this subsection shall include 
     the following:
       ``(A) Indication of status.--Each State shall indicate on 
     the face of a title or certificate for a passenger motor 
     vehicle, as applicable, if the passenger motor vehicle is a 
     salvage vehicle, a nonrepairable vehicle, a rebuilt salvage 
     vehicle, or a flood vehicle.
       ``(B) Subsequent titles.--The information referred to in 
     subparagraph (A) concerning the status of the passenger 
     vehicle shall be conveyed on any subsequent title, including 
     a duplicate or replacement title, for the passenger motor 
     vehicle issued by the original titling State or any other 
     State.
       ``(C) Security standards.--The title documents, the 
     certificates and decals required by section 33301(4), and the 
     system for issuing those documents, certificates, and decals 
     shall meet security standards that minimize opportunities for 
     fraud.
       ``(D) Identifying information.--Each certificate of title 
     referred to in subparagraph (A) shall include the passenger 
     motor vehicle make, model, body type, year, odometer 
     disclosure, and vehicle identification number.
       ``(E) Uniform layout.--The title documents covered under 
     the regulations shall maintain a uniform layout, that shall 
     be established by the Secretary, in consultation with each 
     State or an organization that represents States.
       ``(F) Nonrepairable vehicles.--A passenger motor vehicle 
     designated as nonrepairable--
       ``(i) shall be issued a nonrepairable vehicle certificate; 
     and
       ``(ii) may not be retitled.
       ``(G) Rebuilt salvage title.--No rebuilt salvage title may 
     be issued to a salvage vehicle unless, after the salvage 
     vehicle is repaired or rebuilt, the salvage vehicle complies 
     with the requirements for a rebuilt salvage vehicle under 
     section 33301(4).
       ``(H) Inspection programs.--Each State inspection program 
     shall be designed to comply with the requirements of this 
     subparagraph and shall be subject to approval and periodic 
     review by the Secretary. Each such inspection program shall 
     include the following:
       ``(i) Each owner of a passenger motor vehicle that submits 
     a vehicle for an antitheft inspection shall be required to 
     provide--

       ``(I) a completed document identifying the damage that 
     occurred to the vehicle before being repaired;
       ``(II) a list of replacement parts used to repair the 
     vehicle;
       ``(III) proof of ownership of the replacement parts 
     referred to in subclause (II) (as evidenced by bills of sale, 
     invoices or, if such documents are not available, other proof 
     of ownership for the replacement parts); and
       ``(IV) an affirmation by the owner that--

       ``(aa) the information required to be submitted under this 
     subparagraph is complete and accurate; and
       ``(bb) to the knowledge of the declarant, no stolen parts 
     were used during the rebuilding of the repaired vehicle.
       ``(ii) Any passenger motor vehicle or any major part or 
     major replacement part required to be marked under this 
     section or the regulations issued under this section that--

       ``(I) has a mark or vehicle identification number that has 
     been illegally altered, defaced, or falsified; or
       ``(II) cannot be identified as having been legally obtained 
     (through evidence described in clause (i)(III)),

     shall be contraband and subject to seizure.

[[Page S9576]]

       ``(iii) To avoid confiscation of parts that have been 
     legally rebuilt or manufactured, the regulations issued under 
     this subsection shall include procedures that the Secretary, 
     in consultation with the Attorney General of the United 
     States, shall establish--

       ``(I) for dealing with parts with a mark or vehicle 
     identification number that is normally removed during 
     remanufacturing or rebuilding practices that are considered 
     acceptable by the automotive industry; and
       ``(II) deeming any part referred to in clause (i) to meet 
     the identification requirements under the regulations if the 
     part bears a conspicuous mark of such type, and is applied in 
     such manner, as may be determined by the Secretary to 
     indicate that the part has been rebuilt or remanufactured.

       ``(iv) With respect to any vehicle part, the regulations 
     issued under this subsection shall--

       ``(I) acknowledge that a mark or vehicle identification 
     number on such part may be legally removed or altered, as 
     provided under section 511 of title 18, United States Code; 
     and
       ``(II) direct inspectors to adopt such procedures as may be 
     necessary to prevent the seizure of a part from which the 
     mark or vehicle identification number has been legally 
     removed or altered.

       ``(v) The Secretary shall establish nationally uniform 
     safety inspection criteria to be used in States that require 
     such a safety inspection. A State may determine whether to 
     conduct such safety inspection, contract with a third party, 
     or permit self-inspection. Any inspection conducted under 
     this clause shall be subject to criteria established by the 
     Secretary. A State that requires a safety inspection under 
     this clause may require the payment of a fee for such 
     inspection or the processing of such inspection.
       ``(I) Duplicate titles.--No duplicate or replacement title 
     may be issued by a State unless--
       ``(i) the term `duplicate' is clearly marked on the face of 
     the duplicate or replacement title; and
       ``(ii) the procedures issued are substantially consistent 
     with the recommendation designated as recommendation 3 in the 
     report issued on February 10, 1994, under section 140 of the 
     Anti Car Theft Act of 1992 (15 U.S.C. 2041 note) by the task 
     force established under such section.
       ``(J) Titling and control methods.--Each State shall employ 
     the following titling and control methods:
       ``(i) If an insurance company is not involved in a damage 
     settlement involving a salvage vehicle or a nonrepairable 
     vehicle, the passenger motor vehicle owner shall be required 
     to apply for a salvage title or nonrepairable vehicle 
     certificate, whichever is applicable, before the earlier of 
     the date--

       ``(I) on which the passenger motor vehicle is repaired or 
     the ownership of the passenger motor vehicle is transferred; 
     or
       ``(II) that is 30 days after the passenger motor vehicle is 
     damaged.

       ``(ii) If an insurance company, under a damage settlement, 
     acquires ownership of a passenger motor vehicle that has 
     incurred damage requiring the vehicle to be titled as a 
     salvage vehicle or nonrepairable vehicle, the insurance 
     company shall be required to apply for a salvage title or 
     nonrepairable vehicle certificate not later than 15 days 
     after the title to the motor vehicle is--

       ``(I) properly assigned by the owner to the insurance 
     company; and
       ``(II) delivered to the insurance company with all liens 
     released.

       ``(iii) If an insurance company does not assume ownership 
     of a passenger motor vehicle of an insured person or claimant 
     that has incurred damage requiring the vehicle to be titled 
     as a salvage vehicle or nonrepairable vehicle, the insurance 
     company shall, as required by the applicable State--

       ``(I) notify--

       ``(aa) the owner of the owner's obligation to apply for a 
     salvage title or nonrepairable vehicle certificate for the 
     passenger motor vehicle; and
       ``(bb) the State passenger motor vehicle titling office 
     that a salvage title or nonrepairable vehicle certificate 
     should be issued for the vehicle; or

       ``(II) withhold payment of the claim until the owner 
     applies for a salvage title or nonrepairable vehicle 
     certificate.

       ``(iv) If a leased passenger motor vehicle incurs damage 
     requiring the vehicle to be titled as a salvage vehicle or 
     nonrepairable vehicle, the lessor shall be required to apply 
     for a salvage title or nonrepairable vehicle certificate not 
     later than 21 days after being notified by the lessee that 
     the vehicle has been so damaged, except in any case in which 
     an insurance company, under a damage settlement, acquires 
     ownership of the vehicle. The lessee of such vehicle shall be 
     required to inform the lessor that the leased vehicle has 
     been so damaged not later than 30 days after the occurrence 
     of the damage.
       ``(v)(I) Any person who acquires ownership of a damaged 
     passenger motor vehicle that meets the definition of a 
     salvage or nonrepairable vehicle for which a salvage title or 
     nonrepairable vehicle certificate has not been issued, shall 
     be required to apply for a salvage title or nonrepairable 
     vehicle certificate, whichever is applicable.
       ``(II) An application under subclause (I) shall be made the 
     earlier of--

       ``(aa) the date on which the vehicle is further 
     transferred; or
       ``(bb) 30 days after ownership is acquired.

       ``(III) The requirements of this clause shall not apply to 
     any scrap metal processor that--

       ``(aa) acquires a passenger motor vehicle for the sole 
     purpose of processing the motor vehicle into prepared grades 
     of scrap; and
       ``(bb) carries out that processing.

       ``(vi) State records shall note when a nonrepairable 
     vehicle certificate is issued. No State shall issue a 
     nonrepairable vehicle certificate after 2 transfers of 
     ownership in violation of section 33301(b)(7)(B).
       ``(vii)(I) In any case in which a passenger motor vehicle 
     has been flattened, baled, or shredded, whichever occurs 
     first, the title or nonrepairable vehicle certificate for the 
     vehicle shall be surrendered to the State not later than 30 
     days after that occurrence.
       ``(II) If the second transferee on a nonrepairable vehicle 
     certificate is unequipped to flatten, bale, or shred the 
     vehicle, such transferee shall be required, at the time of 
     final disposal of the vehicle, to use the services of a 
     professional automotive recycler or professional scrap 
     processor. That recycler or reprocessor shall have the 
     authority to--

       ``(aa) flatten, bale, or shred the vehicle; and
       ``(bb) effect the surrender of the nonrepairable vehicle 
     certificate to the State on behalf of the second transferee.

       ``(III) State records shall be updated to indicate the 
     destruction of a vehicle under this clause and no further 
     ownership transactions for the vehicle shall be permitted 
     after the vehicle is so destroyed.
       ``(IV) If different from the State of origin of the title 
     or nonrepairable vehicle certificate, the State of surrender 
     shall notify the State of origin of the surrender of the 
     title or nonrepairable vehicle certificate and of the 
     destruction of such vehicle.
       ``(viii)(I) In any case in which a salvage title is issued, 
     the State records shall note that issuance. No State may 
     permit the retitling for registration purposes or issuance of 
     a rebuilt salvage title for a passenger motor vehicle with a 
     salvage title without a certificate of inspection that--

       ``(aa) complies with the security and guideline standards 
     established by the Secretary under subparagraphs (C) and (G), 
     as applicable; and
       ``(bb) indicates that the vehicle has passed the 
     inspections required by the State under subparagraph (H).

       ``(II) Nothing in this clause shall preclude the issuance 
     of a new salvage title for a salvage vehicle after a transfer 
     of ownership.
       ``(ix) After a passenger motor vehicle titled with a 
     salvage title has passed the inspections required by the 
     State, the inspection official shall--

       ``(I) affix a secure decal required under section 33301(4) 
     (that meets permanency requirements that the Secretary shall 
     establish by regulation) to the door jamb on the driver's 
     side of the vehicle; and
       ``(II) issue to the owner of the vehicle a certificate 
     indicating that the passenger motor vehicle has passed the 
     inspections required by the State.

       ``(x)(I) The owner of a passenger motor vehicle titled with 
     a salvage title may obtain a rebuilt salvage title and 
     vehicle registration by presenting to the State the salvage 
     title, properly assigned, if applicable, along with the 
     certificate that the vehicle has passed the inspections 
     required by the State.
       ``(II) If the owner of a rebuilt salvage vehicle submits 
     the documentation referred to in subclause (I), the State 
     shall issue upon the request of the owner a rebuilt salvage 
     title and registration to the owner. When a rebuilt salvage 
     title is issued, the State records shall so note.
       ``(K) Flood vehicles.--
       ``(i) In general.--A seller of a passenger motor vehicle 
     that becomes a flood vehicle shall, at or before the time of 
     transfer of ownership, provide a written notice to the 
     purchaser that the vehicle is a flood vehicle. At the time of 
     the next title application for the vehicle--

       ``(I) the applicant shall disclose the flood status to the 
     applicable State with the properly assigned title; and
       ``(II) the term `Flood' shall be conspicuously labeled 
     across the front of the new title document.

       ``(ii) Leased vehicles.--In the case of a leased passenger 
     motor vehicle, the lessee, within 15 days after the 
     occurrence of the event that caused the vehicle to become a 
     flood vehicle, shall give the lessor written disclosure that 
     the vehicle is a flood vehicle.
       ``(c) Electronic Procedures.--A State may employ electronic 
     procedures in lieu of paper documents in any case in which 
     such electronic procedures provide levels of information, 
     function, and security required by this section that are at 
     least equivalent to the levels otherwise provided by paper 
     documents.

     ``Sec. 33303. Petitions for extensions of time

       ``(a) In General.--Subject to subsection (b), if a State 
     demonstrates to the satisfaction of the Secretary, a valid 
     reason for needing an extension of a deadline for compliance 
     with requirements under section 33302(a), the Secretary may 
     extend, for a period determined by the Secretary, an 
     otherwise applicable deadline with respect to that State.
       ``(b) Limitation.--No extension made under subsection (a) 
     shall remain in effect on or after the applicable compliance 
     date established under section 33302(b).

     ``Sec. 33304. Effect on State law

       ``(a) In General.--Beginning on the effective date of the 
     regulations issued under section 33302, this chapter shall 
     preempt any

[[Page S9577]]

     State law, to the extent that State law is inconsistent with 
     this chapter or the regulations issued under this chapter 
     (including the regulations issued under section 33302), 
     that--
       ``(1) establish the form of the passenger motor vehicle 
     title;
       ``(2)(A) define, in connection with a passenger motor 
     vehicle (but not in connection with a passenger motor vehicle 
     part or part assembly separate from a passenger motor 
     vehicle)--
       ``(i) any term defined in section 33301;
       ``(ii) the term `salvage', `junk', `reconstructed', 
     `nonrepairable', `unrebuildable', `scrap', `parts only', 
     `rebuilt', `flood', or any other similar symbol or term; or
       ``(B) apply any of the terms referred to in subparagraph 
     (A) to any passenger motor vehicle (but not in connection 
     with a passenger motor vehicle part or part assembly separate 
     from a passenger motor vehicle); and
       ``(3) establish titling, recordkeeping, antitheft 
     inspection, or control procedures in connection with any 
     salvage vehicle, rebuilt salvage vehicle, nonrepairable 
     vehicle, or flood vehicle.
       ``(b) Rule of Construction.--
       ``(1) Additional disclosures.--Additional disclosures of 
     the title status or history of a motor vehicle, in addition 
     to disclosures made concerning the applicability of terms 
     defined in section 33301, may not be considered to be 
     inconsistent with this chapter.
       ``(2) Inconsistent terms.--When used in connection with a 
     passenger motor vehicle (but not in connection with a 
     passenger motor vehicle part or part assembly separate from a 
     passenger motor vehicle), any definition under Federal or 
     State law of a term defined in section 33301 that is 
     different from the definition provided for in that section or 
     any use of any other term listed in subsection (a), shall be 
     considered to be inconsistent with this chapter.
       ``(3) Rule of construction.--Nothing in this chapter shall 
     preclude a State from disclosing on a rebuilt salvage title 
     that a rebuilt salvage vehicle has passed a State safety 
     inspection that differed from the nationally uniform criteria 
     promulgated under section 33302(b)(2)(H)(v).

     ``Sec. 33305. Civil and criminal penalties

       ``(a) Prohibited Acts.--It shall be unlawful for any person 
     knowingly and willfully to--
       ``(1) make or cause to be made any false statement on an 
     application for a title (or duplicate title) for a passenger 
     motor vehicle;
       ``(2) fail to apply for a salvage title in any case in 
     which such an application is required;
       ``(3) alter, forge, or counterfeit--
       ``(A) a certificate of title (or an assignment thereof);
       ``(B) a nonrepairable vehicle certificate;
       ``(C) a certificate verifying an antitheft inspection or an 
     antitheft and safety inspection; or
       ``(D) a decal affixed to a passenger motor vehicle under 
     section 33302(b)(2)(J)(ix);
       ``(4) falsify the results of, or provide false information 
     in the course of, an inspection conducted under section 
     33302(b)(2)(H);
       ``(5) offer to sell any salvage vehicle or nonrepairable 
     vehicle as a rebuilt salvage vehicle; or
       ``(6) conspire to commit any act under paragraph (1), (2), 
     (3), (4), or (5).
       ``(b) Civil Penalty.--Any person who commits an unlawful 
     act under subsection (a) shall be subject to a civil penalty 
     in an amount not to exceed $2,000.
       ``(c) Criminal Penalty.--Any person who knowingly commits 
     an unlawful act under subsection (a) shall, upon conviction, 
     be--
       ``(1) subject to a fine in an amount not to exceed $50,000;
       ``(2) imprisoned for a term not to exceed 3 years; or
       ``(3) subject to both fine under paragraph (1) and 
     imprisonment under paragraph (2).''.
       (b) Conforming Amendment.--The analysis for subtitle VI of 
     title 49, United States Code, is amended by adding at the end 
     the following new item:

``333. Automobile Safety, Antitheft, and Title Disclosure R33301''.nts.

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