[Congressional Record Volume 144, Number 137 (Monday, October 5, 1998)]
[Senate]
[Page S11498]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

                                 ______
                                 

         NATIONAL SALVAGE MOTOR VEHICLE CONSUMER PROTECTION ACT

 Mr. LEVIN. Mr. President, I am pleased Senators Lott and 
Gorton have accepted my amendment to the substitute to S. 852, the 
National Salvage Motor Vehicle Consumer Protection Act of 1998. 
Senators Feinstein and Bryan have joined me in offering this amendment 
which will remedy concerns that the substitute bill would have 
preempted state laws that provide greater consumer protection with 
regard to the titling of salvage vehicles.
  My colleagues may have heard from the state attorneys general about 
their opposition to the state preemption impact of the substitute bill. 
Mr. President, I have worked with the state attorneys general to 
address their concern. Simply put, my amendment will allow states with 
higher standards to keep them.
  S. 852 without my amendment would establish national titling 
standards that act as a ceiling rather than a floor because, except for 
a few narrow exceptions, the legislation would have preempted existing 
tougher state standards for when a vehicle must be declared salvage, 
rebuilt salvage, non-repairable or flood damaged.
  For example, Michigan has a stronger consumer protection standard for 
when a vehicle must be declared ``non-repairable'' which would be 
preempted by S. 852. In Michigan, if a vehicle is damaged 91 percent or 
more of its value, its title must be branded ``scrap'' or non-
repairable.
  S. 852 defines non-repairable as a vehicle which has no resale value 
except as a source of parts or scrap and it excludes flood vehicles. 
That is considered a weaker and more subjective definition than 
Michigan's, but under the substitute to S. 852 without my amendment, 
Michigan must accept the lower or weaker national standard.
  In addition, Michigan's salvage definition includes motorcycles, 
motor homes, and flood vehicles and S. 852 exempts them. Again, the 
substitute legislation would force Michigan to abide by a standard that 
excludes these types of vehicles. My amendment would allow Michigan to 
retain these provisions of its vehicle titling code.
  To avoid the preemption of state laws providing greater vehicle 
titling protection to consumers, my amendment would establish a 
national or federal standard for when a vehicle's title must be branded 
with the term ``salvage'', ``rebuilt salvage'', ``non-repairable'', and 
``flood'' damaged. Under my amendment, the federally required standard 
would become a floor because no state opting in would be allowed to 
have a lower standard. However, my amendment would allow states that 
choose to provide more protection to consumers to retain or enact 
standards that may be considered more stringent.
  Therefore, under the substitute, with my amendment, consumers would 
be protected against unscrupulous people who take the title of a 
vehicle that has been in a wreck to a state with lower standards in 
order to give the vehicle a clean title to hide the fact that it was 
damaged. There will now be a national standard that each participating 
state will have to meet. But it will be a national floor rather than a 
ceiling because states can retain or enact tougher standards if they so 
wish. Establishing a federal standard leaves state salvage law intact 
and not preempted.
  I view this legislation, as amended, as a big step forward in 
protecting the consumer from the unscrupulous practice known as ``title 
washing'' because it gives us a relatively high national standard that 
did not previously exist. At the same time, it is not watering down any 
state standard that may be even more protective of the consumer than 
the federal standard established by this legislation.
  I would have preferred that the federal standard contain a tougher 
measurement for when a damaged vehicle would be declared ``salvage''. 
However, the majority of states that have a percentage based salvage 
definition use the 75% number contained in this legislation and it is 
appropriate we go with the definition of the majority of states.
  This legislation, as amended, does not preempt state law and the 
national standard that it sets is where the majority of states are, in 
terms of the percentage used in the definition of ``salvage'' vehicle.
  Mr. President, few would dispute the need to stop the current 
practice of selling rebuilt wrecks to unsuspecting buyers. The 
objective of this legislation is to make it more difficult for the 
unscrupulous seller to conceal the fact that a vehicle has been in an 
accident by transferring the vehicle's title in a state with lower 
standards then where the vehicle is ultimately sold. This legislation, 
as amended, accomplishes this objective and with my amendment, it 
represents important consumer protection.
 Mrs. FEINSTEIN. Mr. President, I rise in support of the 
Salvage Motor Vehicle legislation as it has been amended by the Levin/
Feinstein amendment.
  The sale of rebuilt vehicles that have been wrecked in accidents has 
become a major national problem. According to the National Association 
of Independent Insurers, about 2.5 million vehicles are involved in 
accidents so severe that they are declared a total loss. Yet, more than 
a million of these vehicles are rebuilt and put back on the road.
  In many cases, ``totaled'' cars are sold at auction, refurbished to 
conceal prior damage, and resold to consumers without disclosure of the 
previous condition of the car. The structural integrity of these 
vehicles has been so severely weakened that the potential for serious 
injury in an accident is greatly increased.
  This bill seeks to address the problem by requiring vehicle owners to 
disclose that the car has been salvaged if it has sustained damage 
valued at more than 75% of its retail value. The problem with this 
approach is that it sets a ceiling rather than a floor for consumer 
protection. States who may already have stronger definitions of salvage 
vehicles would be preempted.
  The amendment that I have offered with the senior Senator from 
Michigan will eliminate this flaw in the bill. Our amendment says 
specifically that nothing in this bill will effect a state law that 
provides more stringent consumer protection relating to the inspection, 
titling or any other action dealing with salvage vehicles. We believe 
that this is the best possible outcome. A minimum level of consumer 
protection will be set at the federal level, but the bill now 
authorizes states to provide greater or more comprehensive protection 
if they wish.
  Protection for consumers in my state of California will be greatly 
enhanced by the Levin/Feinstein amendment. California law does not set 
a percentage value for salvage vehicles. Instead it says that a vehicle 
is salvaged when the owners determines that repairing the vehicle is 
``uneconomical''. Our amendment will allow California to maintain that 
definition as well as states with other protections. California law is 
also more comprehensive in terms of what vehicles are covered. 
California's law covers all vehicles including large trucks, 
motorcycles, and motor homes which would not be covered under the 
federal law.
  I believe we now have a good bill. By setting a federal level of 
consumer protection that is a floor rather than a ceiling, we will 
achieve the goal of protecting consumers from fraud while at the same 
time giving states the flexibility to implement a stricter definition 
for salvage vehicles.
  I want to thank the Senator from Michigan. Together we have crafted 
an amendment that will protect the residents of our states and many 
others. I also want to thank the Majority Leader for his willingness to 
work with us to improve the bill.

                          ____________________