[Congressional Record Volume 144, Number 139 (Wednesday, October 7, 1998)]
[Senate]
[Pages S11805-S11806]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             NATIONAL SALVAGE MOTOR VEHICLE PROTECTION ACT

 Mr. GORTON. Mr. President, I rise today in support of the 
substitute amendment to S. 852, the National Salvage Motor Vehicle 
Protection Act of 1998.
  The substitute makes a number of changes to the Committee-passed 
bill. While not as far reaching as some would like, I believe that the 
changes improve a measure that has always had a very laudable intent, 
but which was criticized nevertheless by attorneys general and consumer 
groups for preempting, in some instances, more favorable state law and 
not providing consumers with enough information about a vehicles' 
history.
  As a former Attorney General, I was particularly sensitive to these 
criticisms, and last Fall I placed a hold on the measure with the 
expectation of facilitating a consensus between the bill's supporters, 
the attorneys general, and various consumer advocate groups. 
Regrettably, a consensus of legislation was not to be had. While the 
changes in the amendment are generally intended to address concerns 
raised by the attorneys general and, to some extent, consumer 
advocates, neither of these groups has endorsed this measure. I removed 
my hold on the amendment despite this, however, because there is a 
consensus, of which I am a part, on the need for federal legislation 
regarding salvage and rebuilt vehicles. The bill, as amended, is not 
perfect. But as my months of trying to broker an agreement revealed, 
``perfect,'' even if defined to mean the best interest of consumers, is 
a subjective term. S. 852, as amended, is, in my view, and in that of 
over 50 co-sponsors, better than the status quo.
  I remain troubled that the attorneys general and some consumer 
advocate groups do not agree. I am also somewhat baffled by the 
seemingly studied misconstruction of the bill, and my amendment to it 
by some who continue to oppose it.
  Let me explain the changes in the amendment to S. 852. In response to 
complaints that S. 852 set too high a damage threshold for designating 
a vehicle as ``salvage,'' the amendment lowers the threshold from 80% 
to the lower of 75% or the percentage threshold in a state as of the 
date of enactment. Seventy-five percent is the threshold recommended by 
the task force created by the Anti-Car Theft Act of 1992, on whose work 
this legislation is based. Industry defenders of the higher threshold 
argued that lowering it would hurt, not help, consumers because it 
would devalue vehicles even when there is no legitimate safety-related 
reason for mandating the disclosure of prior damage. I understand their 
point, but don't agree. Yes, there is some threshold at which mandatory 
labeling, and the bureaucratic burden that attends it, is more costly 
than beneficial for both buyers and sellers, but I do not believe we 
have come close to that turning point.
  The attorneys general's concern that S. 852 did not provide for 
sufficient disclosure applied not only to the percent of damage 
threshold, but also to limited scope of the vehicles covered by the 
bill. S. 852 proposed to permit the ``salvage vehicle'' label to attach 
only to vehicles less than seven years old or with more than $7500. 
While states were free to use any other label they chose for all 
vehicles, including older vehicles, state attorneys general wanted to 
be able to use the term ``salvage'' to describe older vehicles because 
it is the term most commonly used today to advise of prior damage. The 
amendment to S. 852 permits states to do this, and explicitly provides 
that states can use the term ``older model salvage vehicle'' to label 
older vehicles.
  Complaints about the mandatory nature of S. 852 ran the gamut. Some 
critics of S. 852, including the Department of Transportation, objected 
to the fact that states were not obligated to comply with the Act, 
arguing that states could opt out and become regional title washing 
capitals. Others complained that the bill was too prescriptive, and did 
not allow states (the majority of which, until now, do not appear to 
have adopted very consumer-friendly laws) to set the standards for 
labeling and disclosure. Rather than refight the battle that led the 
House to conclude that a mandate would be unconstitutional, and because 
I was unable to persuade anyone to agree that we should use a big stick 
as opposed to a carrot approach, the amendment to S. 852 does not make 
the labeling system mandatory, but incorporates a provision to address 
concerns that opt-out states will become title-washing capitals. The 
amendment to S. 852 makes it a violation of the Act to move vehicles, 
or vehicle titles, across state lines for the purpose of avoiding the 
requirements in the Act.

  Another minor modification to S. 852 corrects what I believe was an 
oversight in S. 852, and makes it a violation of the Act not to comply 
with the labeling and disclosure requirements for ``flood vehicles.''
  Another modification made to S. 852 clarifies that states that choose 
to abide by the provisions of the Act must carry over not only the 
``salvage vehicle,'' ``nonrepairable vehicle,'' and ``flood vehicle'' 
labels on titles, but also any other disclosure that states prescribe. 
This concept was contained in S. 852, but the language was unclear. The 
legislation does not restrict states from labeling a car with any term, 
and prescribing treatment of a car so labeled with any term, other than 
the very limited list of terms used in the bill. In other words, a 
state that accepts federal funds for the national motor vehicle 
identification number database, and that does not specifically state on 
its titles that it is not complying with the federal titling standards, 
must use the definition of ``salvage vehicle'' and ``nonrepairable 
vehicle'' prescribed in the bill. However, S. 852 permits that state to 
label the same vehicle with any other term it chooses and imposes any 
restrictions attendant to the other label. The amendment clarifies that 
states that chose to use the national labels, including those for 
``salvage vehicle'' and ``nonrepairable vehicle,'' must not only carry 
over these labels from other states, but must also carry over any other 
labels another state chooses to affix, and specify the state that so 
labeled the vehicle.
  Other modifications specifically permit state attorneys general to 
bring actions on behalf of individuals for violations of the Act, and 
clarify that the Act in no way affects individuals' ability to bring 
private rights of action. In response to concerns that S. 852 preempted 
state causes of action and created a sole remedy for violations 
relating to title labeling and disclosure, the amendment specifically 
provides that the Act does not preclude any private right of action 
available under state law. This provision was intended to provide 
assurances that nothing in the Act restricts individuals, or attorneys 
general, from pursuing any claims under state law, such as claims based 
on violations of consumer protection laws, unfair trade practices, or 
failures to disclose the material terms of a contract. Curiously, the 
inclusion of this provision, designed to allay concerns about 
preemption, appears to have unreasonable stirred them. Some appear to 
have drawn the illogical and legally unsupported conclusion that any 
claim not specifically preserved is implicity barred. Let met again try 
to clarify. There is absolutely nothing in the bill that suggests that 
the remedies it provides (action by attorneys general) are exclusive. 
Simply because the legislation states that private actions are 
specifically preserved does not mean that all other actions are barred 
or restricted in any way.
  The modification that has drawn criticism even from those consumer 
groups whose interests I was attempting to advance in my amendment, is 
the striking of the criminal penalty provisions. This modification was 
not requested by anyone seeking to avoid accountability. Rather, I 
sought to strike the criminal penalties because I believe that the 
criminal sanctions in S. 852 were inappropriate in most instances, and 
unnecessary in others. As

[[Page S11806]]

a general matter, I believe that Congress creates too many federal 
criminal offenses, when it should leave this task to state law. A 
violation of this bill, such as a failures to make disclosures about a 
vehicle's history, generally is not the type of violation for which 
people should be sent to jail. If the conduct is so egregious that 
criminal sanctions are warranted, then existing state laws against 
fraud, theft, and the like are available based on which to prosecute 
violators.
  The change I have just described to S. 852 are not extensive. They 
are, nevertheless, important and, in my opinion, improve a bill that is 
needed at this time.

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