[Congressional Record Volume 145, Number 74 (Thursday, May 20, 1999)]
[Senate]
[Page S5732]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     BUYING FLOOD DAMAGED VEHICLES

  Mr. LOTT. Mr. President, consumers, motor vehicle administrators, law 
enforcement, and the automotive and insurance industries anxiously 
await Congressional action on appropriate and workable title branding 
legislation. Legislation that provides used car purchasers with much 
needed pre-purchase disclosure information for severely damaged 
vehicles.
  As a result of varying state approaches, consumers are not always 
advised of a vehicle's damage history. The National Salvage Motor 
Vehicle Consumer Protection Act, S. 655, that I introduced back in 
March, would help correct this problem. It provides grant funds to 
states to encourage their adoption of uniform terms and procedures for 
salvage and other severely damaged vehicles. While a mandatory federal 
scheme was suggested during the last Congress, there were serious 
Constitutional concerns and the real potential that Congress would 
create an expensive unfunded mandate on states. The approach taken in 
S.655 overcomes these problems and provides states with offsetting 
funding.
  Mr. President, it is clear that any title branding legislation 
Congress adopts must contain a rational definition for vehicles that 
sustain significant water damage.
  The Congressionally chartered Motor Vehicle Titling, Registration and 
Salvage Advisory Committee, whose recommendations for curtailing title 
fraud and automobile theft spurred my sponsorship of S.655, came to the 
reasoned conclusion that water damage was so potentially insidious in 
nature that a separate and distinct consumer disclosure category needed 
to be created. One that distinguished flood vehicles from salvage and 
nonrepairable vehicles.
  S. 655, which is similar to the bipartisan measure I coauthored with 
Senator Ford during the last Congress, adopts a distinct flood vehicle 
category and improves upon the definition initially proposed by the 
task force.
  Mr. President, I am sure my colleagues are aware that the State of 
Illinois, which initially adopted the task force's recommended flood 
definition, subsequently revised it based on anti-consumer results. 
Illinois found that branding ``any vehicle that has been submerged in 
water to the point that rising water has reached over the door sill or 
has entered the passenger or truck compartment'' caused too many 
vehicles to be unnecessarily branded as ``flood'' vehicles. Vehicles 
that were significantly devalued and lost their manufacturers warranty 
when the only damage the vehicle suffered was wet carpets or wet floor 
mats.
  S.655 is a good example of the need to balance competing consumer 
interests when establishing uniform titling definitions. Instead of 
unnecessarily and inappropriately branding vehicles with mere cosmetic 
damage, this legislation rightly brands as ``flood'' those vehicles 
which sustain water damage that impairs a car or truck's electrical, 
mechanical, or computerized functions. It also requires the ``flood'' 
designation for vehicles acquired by an insurer as part of a water 
damage settlement. This measure also includes an independent flood 
inspection as recommended by a working group of the National 
Association of Attorney's General.
  Mr. President, I ask my collegues to heed the call of used-car buyers 
and provide them with a reasonable and workable title branding measure. 
One that includes all of the minimal definitions needed to protect them 
from title fraud and automobile theft.

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