[Congressional Record (Bound Edition), Volume 145 (1999), Part 7]
[Senate]
[Pages 9054-9059]
[From the U.S. Government Publishing Office, www.gpo.gov]



        STATE DMV DIRECTORS' VIEWS ON TITLE BRANDING LEGISLATION

  Mr. LOTT. Mr. President, the American Association of Motor Vehicle 
Administrators recently provided me with letters it has received from 
state motor vehicle administrators across the country on title branding 
legislation. As a collective group, DMV directors are looking to 
Congress to enact a balanced and responsible measure to combat title 
fraud. Legislation that is based on real world experience. Legislation 
that they can implement.
  As my colleagues know, I reintroduced the National Salvage Motor 
Vehicle Consumer Protection Act, S. 655 back in March. This legislation 
is similar to the bipartisan title branding bill Senator Ford and I 
coauthored during the 105th Congress. Legislation that received 57 
cosponsors and which overwhelmingly passed the House of Representatives 
with some modifications last October.
  S. 655 is an appropriate legislative solution to a growing national 
problem. A problem that costs millions of unsuspecting used car buyers 
billions of dollars and places motorists in every state at risk. 
Everyday, severely damaged cars are put back together by unscrupulous 
rebuilders who sell these vehicles without disclosing their previous 
damage history. They are able to shield the vehicle's history due to 
significant advances in technology and, in large part, because their is 
a hodgepodge of titling rules throughout the nation. They take 
repatched vehicles, or their titles, to states that have minimal or no 
salvage vehicle rules and have them retitled with no indication that 
the vehicle previously sustained significant damage.
  The National Salvage Motor Vehicle Consumer Protection Act would help 
curtail title washing by encouraging states to adopt a model title 
branding program for salvage, rebuilt salvage, flood, and nonrepairable 
vehicles. The bill provides states with incentives to establish minimum 
titling definitions and standards. This is key. It is particularly 
aimed at that those states which need to bring their rules and 
procedures to a universally accepted minimum standard.
  In 1992, as part of the Anti-Car Theft Act, Congress mandated the 
establishment of a Motor Vehicle Titling, Registration, and Salvage 
Advisory Committee to devise a model salvage vehicle program. The 
Salvage Advisory Committee, led by the U.S. Department of 
Transportation, issued its findings in February 1994. Its report 
recommended specific uniform definitions and standards for severely 
damaged passenger vehicles. It included a 75% damage threshold for 
salvage vehicles, anti theft inspections for salvage vehicles before 
they could be placed back on the road, and the permanent retirement of 
vehicles that are unsafe for operation and have no value except as a

[[Page 9055]]

source of scrap or parts. The report recommended the branding of titles 
as the most appropriate method for disclosing a severely damaged 
vehicle's prior history.
  Mr. President, Senator Ford and I simply drafted legislation that 
would largely codify the Salvage Advisory Committee's recommendations. 
Recommendations that encompassed the wisdom of all of the experts on 
titling matters. This committee of key stakeholders, led by the U.S. 
Department of Transportation, provided real world solutions to address 
title fraud and automobile theft. Solutions based on state motor 
vehicle titling trends--uniform titling definitions and standards that 
states would be willing to accept.
  Senator Ford and I introduced a sound, reasonable, and appropriately 
balanced measure during the 105th Congress. It did not take sides. It 
did not codify the recommendations of one particular interest group. It 
did not benefit one group at the expense of another. Instead, it 
reflected a balanced, bipartisan consensus. Even so, a number of 
significant changes were incorporated during the last Congress to 
accommodate the concerns raised by certain State Attorneys General, 
consumer groups and others. I would like to highlight some of the 
revisions made by me in a good faith effort to satisfy the concerns 
expressed and to advance the bill.
  The ``Salvage'' vehicle threshold was lowered from 80% to 75%--so 
that if a late model vehicle has sustained damage exceeding 75 percent 
of its pre-accident value, it would be branded ``salvage. The bill also 
allowed a state to cover any vehicle regardless of its age.
  The original bill did not allow conforming states to use synonymous 
terms. That has been stricken from the bill--so now states may use 
additional terms to define damaged vehicles. For example, a state can 
use the bill's ``nonrepairable" definition and can also use another 
term such as ``junk'' if it wants to have a different definition to 
describe parts only vehicles.
  The revised bill included a new provision granting state attorney's 
general the ability to sue on behalf of citizens victimized by fraud 
and to recover monetary judgements for consumers.
  It included two new prohibited acts--failure to make a flood 
disclosure and moving the vehicle or its title into interstate commerce 
to avoid the bill's requirements.
  Another new provision makes it clear that the bill will not affect 
any private right of action available under state law.
  The bill clearly established that states could provide additional 
disclosures beyond those identified in the legislation.
  At the request of Senator Hollings, a new provision was added 
regarding the Secretary of Transportation advising automobile dealers 
of the prohibition on selling vans as school buses.
  Instead of penalizing states for non-participation by withholding 
National Motor Vehicle Titling Information System (NMVTIS) funding, my 
bill now provides states with incentive grants to encourage their 
participation. This was a very good recommendation offered by the U.S. 
Department of Transportation. It takes into account the fact that 20 or 
more states will have received their NMVTIS funding by the time the 
bill becomes effective. These new grants can be used by participating 
states to issue new titles, establish and administer theft or safety 
inspections, and enforce titling requirements.
  This voluntary approach also gets around the very real concerns that 
states and the Supreme Court have raised about Congress requiring 
states to legislatively adopt federal regulations. Remember, motor 
vehicle titling has been, up to this point, almost exclusively a state 
function. This revised approach also overcomes the strong possibility 
that preemptive federal titling rules and procedures would impose a 
significant federal unfunded mandate on states.
  The revised bill also incorporates a change made by the House of 
Representatives last year which allows states to adopt an even lower 
salvage threshold if it chooses. It simply does not start the threshold 
at 65% which, while advocated by some, has been expressly rejected by 
states. I think it would be irresponsible for Congress to establish a 
minimum federal salvage threshold that is not in use anywhere and which 
states have maintained that they do not want. S.655 provides a very 
reasonable compromise. Those who want a lower salvage threshold than 
75% are free to work with state legislatures to convince them that a 
lower threshold in their states is warranted.
  Also, at the request of the National Association of Attorney's 
General, S.655 includes provisions which require: the retail value of a 
``late model vehicle'' to be adjusted by the Secretary of 
Transportation every five years; flood vehicle inspections to be 
conducted by an independent party; and the Secretary's establishment of 
a publicly accessible national record of conforming states.
  Mr. President, I believe S.655 is the right legislative solution to 
address title fraud. It creates a model program based on balanced 
titling definitions and standards for salvage, rebuilt salvage, flood, 
and nonrepairable vehicles.
  It does not violate the Supreme Court's rulings on federal versus 
state roles and responsibilities. Instead it establishes a voluntary 
titling framework.
  It is not a federal unfunded mandate. Instead it provides states with 
seed money to encourage their participation.
  It does not take away a state's NMVTIS funding or jeopardize the 
implementation of this system. Instead, it fosters maximum state 
participation in this important national title information system.
  It does not harm consumers who own low value vehicles or cause motor 
vehicles to be branded unnecessarily. Instead, it adopts the reasonable 
thresholds recommended by the Salvage Advisory Committee and it focuses 
on severely damaged vehicles and pre-purchase disclosure.
  It does not force otherwise repairable vehicles to be junked because 
of arbitrary thresholds. Instead, it subjects vehicles to a rational 
vehicle retirement standard based on a case-by-case determination. A 
standard employed by California, Illinois, and a number of other 
states.
  It leaves intact state criminal penalties and causes of action 
without imposing significant additional burdens on the already 
overwhelmed federal court system.
  Mr. President, the National Salvage Motor Vehicle Consumer Protection 
Act is a sound, reasonable, and workable title branding measure. This 
is not just my opinion, but the view of state motor vehicle 
administrators. These are the experts on the front line. The very 
people who would be responsible for administering the provisions of the 
National Salvage Motor Vehicle Consumer Protection Act.
  Mr. President, I ask unanimous consent to have printed in the Record 
several letters from state motor vehicle administrators on the issue of 
title branding legislation.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. LOTT. I ask my colleagues to take heed of the wisdom offered by 
the many DMV directors who submitted comments on S.655 and other title 
branding proposals.
  Congress needs to pass S.655, the National Salvage Motor Vehicle 
Consumer Protection Act, for America's used car buyers and motorists 
and for the people who have to administer titling rules.

                               Exhibit 1

                                           American Association of


                                 Motor Vehicle Administrators,

                                    Arlington, VA, March 22, 1999.
     To: Chief Motor Vehicle Administrators, Chief Law Enforcement 
         Officers
     From: Kenneth M. Beam, President & CEO
     Re: Introduction of Salvage Titling Legislation

       I am pleased to report that Senator Trent Lott (R-MS) along 
     with 13 co-sponsors recently introduced S. 655, the National 
     Salvage Motor Vehicle Consumer Protection Act of 1999. This 
     bill establishes national uniform requirements regarding the 
     titling and registration of salvage, nonrepairable and 
     rebuilt vehicles. AAMVA has worked closely with Senator 
     Lott's staff to assure that the bill reflects AAMVA policy on 
     uniform salvage definitions and procedures.

[[Page 9056]]

       For the most part this bill mirrors language in S. 852, 
     which was introduced by Senator Lott and supported by 57 
     members of the Senate in the 105th Congress. However, there 
     are two major differences in S. 655 we would like to 
     highlight. First, the bill does not require that states who 
     receive federal funding from the Department of Justice for 
     the National Motor Vehicle Title Information System (NMVTIS) 
     to conform with the requirements of the bill or place a 
     notice on the certificate of title that their state is not in 
     compliance.
       Second, the bill includes incentive grants for states that 
     do carry out its provisions. S. 655 authorizes $16 million to 
     states for fiscal year 2000. No state that is eligible for 
     the grant shall receive less than $250,000. The ratio shall 
     be apportioned in accordance with section 402, Title 23 of 
     the U.S. Code. Any state that receives a grant under this 
     section shall use the funds to carry out the provisions of 
     this bill including such performance related activities as 
     issuing titles, establishing and administering vehicle theft 
     or salvage vehicle safety inspections, enforcement and other 
     related purposes.
       In addition, AAMVA has worked closely with other interested 
     organizations to respond to concerns raised by the National 
     Association of Attorneys General (NAAG). We are enclosing a 
     copy of our response to those concerns.
       If you have questions or comments, please direct them to 
     either Linda Lewis, director of Public & Legislative Affairs 
     or Larry Greenberg, vice president, Vehicle Services at 703-
     522-4200.
                                  ____

                                           National Association of


                                 Motor Vehicle Administrators,

                                    Arlington, VA, March 31, 1999.
     To: Chief Motor Vehicle Administrators, Chief Law Enforcement 
         Officers.
     From: Kenneth M. Beam, President & CEO.
     Re introduction of companion salvage titling legislation.

       A copy of Senator Lott's salvage legislation, the National 
     Salvage Motor Vehicle Consumer Protection Act, S. 655, was 
     recently forwarded to you for review and comment. AAMVA 
     strongly supports this version, which mirrors the Salvage 
     Advisory Committee's recommendations and current AAMVA 
     policy. On March 23, 1999, Senator Dianne Feinstein 
     introduced companion salvage legislation, the Salvaged and 
     Damaged Motor Vehicle Information Disclosure Act, S. 678. We 
     believe this bill will create a tremendous burden on 
     jurisdictions to implement and will increase complexity and 
     costs with regard to salvage definitions and standards 
     without any corresponding gains in uniformity. In addition, 
     many of its provisions are in conflict with AAMVA policy.
       Many of AAMVA's concerns were addressed in the response to 
     the National Association of Attorneys General Working Group 
     (NAAG) who support similar provisions that are included in S. 
     678. Our comments to NAAG were included in the mailing dated 
     March 22, 1999. However, we feel it important to highlight a 
     few areas of major concern with S. 678. The bill: Establishes 
     a 65 threshold for salvage vehicles; establishes a 90% 
     nonrepariable threshold; establishes disclosure requirements 
     for vehicles sustaining $3,000 of damage suffered in one (1) 
     incident; requires states to comply with the legislation to 
     receive federal funding for NMVTIS; and does not include 
     incentive grants to states that implement the legislation as 
     included in S. 655.
       AAMVA's comments to NSSG provide more detail on these and 
     other signs. Please review the companion legislation and 
     forward any comments or concerns you have with the bill to 
     Linda Lewis by April 15, 1999. Your comments will help ensure 
     that the Association accurately represents the positions of 
     state motor vehicle administrators. If you have any questions 
     about the bill, please direct them to Linda or Larry 
     Greenberg at 703-522-4200.
                                  ____

                                                    Maryland Motor


                                       Vehicle Administration,

                                  Glen Burnie, MD, April 12, 1999.


                               MEMORANDUM

     To: Linda Lewis, AAMVA
     From: Anne S. Ferro, Administrator
     Re: National Salvage Act--SB 655

       Attached please find Maryland's review of S. 655 as it 
     relates to salvage laws in our state. Based on the review by 
     several key program managers, we have affirmed Maryland's 
     support for this bill. Although numerous consumer advocate 
     groups and the National Association of Attorneys General 
     (NAAG) appear to oppose the bill, it is in the best interest 
     of law enforcement and consumers to have a bill that 
     establishes national uniform regulations governing salvage.
       We oppose S. 678 introduced by Senators Feinstein and 
     Levin. As you state in your cover memo, the alternate salvage 
     bill has constraints which would be very difficult to 
     enforce.
       Maryland also favors NMVTIS as the project will benefit law 
     enforcement and Motor Vehicle Administrations in combating 
     title fraud. Maryland is committing to re-evaluating its 
     participation in the program once the pilot program is up and 
     running. Our withdrawal from the project last year was due to 
     current costs involved and constraints relating to our title 
     and registration system as well as Y2K.
       Thank you for the opportunity to voice our support for S. 
     655.
       Enclosure.

                               Memorandum

     To: Thomas M. Walsh, Director, Driver and Vehicle Policies 
         and Programs
     From: Eltra Nelson, Chuck Schaub, Victoria D. Whitlock
     Date: April 7, 1999
     Subj: AAMVA Legislative Alert: Introduction of S. 655: 
         National Salvage Motor Vehicle Consumer Protection Act of 
         1999

       As requested, we have reviewed the above-referenced Lott 
     Bill S. 655 and, although there are differences between 
     Maryland's laws relating to salvage vehicles and this bill, 
     we are generally in agreement with the goals of the proposed 
     legislation. As urged by Congress in the Anti Car Theft Act 
     of 1992, there needs to be more uniformity in state title 
     branding laws if we are to defer the criminal activities of 
     the fraudulent rebuilders, who are thriving under the current 
     patchwork system. We offer the following comments:
       If Maryland intends to support this initiative, a decision 
     must be made on the best way to proceed, as Maryland's 
     current law is inconsistent with the provisions of the 
     federal bill. Guidance from the Attorney General's Office 
     would be helpful in charting our course.
       Maryland MVA was one of the National Motor Vehicle Title 
     Information System's (NMVTIS) pilot states, but due to 
     technical problems (Y2K, plans to reengineer TARIS) we 
     temporarily discontinued participation. It is the MVA's 
     intention to resume participation once these problems are 
     resolved.
       S. 655 definition 33301(a)(1) ``passenger motor vehicle'' 
     includes multi-purpose passenger vehicles, and certain trucks 
     including a pickup truck of not more than 10,000 pounds for 
     purposes of the salvage law. We agree with the rationale for 
     expanding the definition in the context of what constitutes a 
     ``salvage vehicle'' (see next bulleted item). MD TR law has 
     separate definitions (11-144.1, 11-136.1, 11-171, 11-176).
       S. 655 term ``salvage vehicle'' 33301(a)(2) means any 
     ``passenger motor vehicle'' other than a flood vehicle or a 
     nonrepairable vehicle which has been wrecked, destroyed, or 
     damaged . . . Conversely, MD TR 11-152 definition of 
     ``salvage'' refers to ``any vehicle that has been damaged by 
     collision, fire, flood, accident, trespass, or other 
     occurrence.'' Flood and nonrepairable vehicles are defined 
     separately (3301(a)(6) and (12)) and do not qualify for a 
     salvage certificate. As recommended by the Federal Advisory 
     Committee, the definitions of salvage vehicles, nonrepairable 
     vehicles, and flood vehicles should be mutually exclusive to 
     promote consumer awareness and uniformity. The bill specifies 
     that once branded, a ``nonrepairable vehicle'' can never be 
     titled or registered for use on roads or highways. 
     (Comparably, Maryland vehicles branded ``Not Rebuildable, 
     Parts Only'' also cannot be converted into a title.) The bill 
     also specifies that to avoid subsequent branding as a ``flood 
     vehicle'', the owner or insurer must have the vehicle 
     inspected by an independent party.
       S. 655 permits any individual or entity to certify the 
     amount of damage and costs of repairs to rebuild or 
     reconstruct. MD Law allows only insurance companies to make 
     this certification.
       S. 655 ``late model vehicle'' means model year designation 
     of or later than the year in which the passenger motor 
     vehicle was wrecked, etc. or any of the six preceding years; 
     OR, has a retail value of more than $7,500. To be classified 
     as a salvage vehicle, the cost of repairs to rebuild or 
     reconstruct the vehicle must exceed 75 percent of the retail 
     value of the vehicle. Maryland brands vehicles less than 7 
     years old when damage is greater than fair market value as 
     ``rebuilt salvage.'' Regarding the bill's 75 percent 
     threshold, we agree with AAMVA's rationale: ``. . . the rule 
     of thumb level of damage used by insurers in making a 
     determination of whether to `total' a wrecked vehicle is 
     damage that exceeds 75% of a vehicle's pre-accident value.'' 
     The bill permits states to use the term ``older model salvage 
     vehicle'' to designate a wrecked, destroyed, or damaged 
     vehicle that does not meet the definition of a ``late mode 
     vehicle.''
       S. 655 (33302) requires states who receive funds under 
     33308 to disclose in writing on the certificate of title, 
     when ownership is transferred and when indicated by ``readily 
     accessible'' records, that the passenger motor vehicle was 
     previously issued a title that bore any word or symbol 
     signifying that the vehicle was ``salvage, older model 
     salvage, unrebuildable, parts only, scrap, junk, 
     nonrepairable, reconstructed, rebuilt, damaged by flood, and 
     the name of the State that issued that title.
       Inspection decal--S. 655 requires the inspection official 
     to affix a permanent decal to the driver's door jam after a 
     passenger motor vehicle titled with a salvage title has 
     passed the state required inspections. According to Corporal 
     Dupczak, the Maryland State Police oppose the placement of a 
     decal, because it can be removed; however, the law specifies 
     the decal shall comply with the

[[Page 9057]]

     ``permanency requirements'' established by the Secretary.
       Disclosure and Label: S. 655 (33303) A person, prior to 
     transfer of ownership, shall give the transferee written 
     disclosure that the vehicle is a rebuilt salvage vehicle. A 
     label shall be affixed by the individual who conducts the 
     applicable state anti-theft inspection in a participating 
     state to the windshield or window of a rebuilt salvage 
     vehicle before its first sale at retail. Note: We assume that 
     the ``brand'' notation on the front of the title certificate 
     would serve as the ``written disclosure.''
       S. 655 (33302(c)) requires the USDOT to establish a 
     National Record of Compliant States. The Secretary shall work 
     with States to update the record upon the enactment of a 
     State law which causes a State to come into compliance or 
     become noncompliant with the requirements of this law.
       Section 33308 provides for incentive grants of not less 
     than $250,000 for each state that demonstrates it is taking 
     appropriate actions to implement the provisions of this law.
       Effect on State law: Unless a state, that receives funds 
     under section 33308, is in compliance with 33302(c), 
     effective on the date the rule is promulgated, the provisions 
     shall preempt all state laws to the extent they are 
     inconsistent with the provisions of this law, which:
       Set forth the form of the passenger motor vehicle title.
       Define, in connection with a passenger motor vehicle part 
     or part assembly separate from a passenger motor vehicle), 
     any term defined in section 33301 or the terms ``salvage'', 
     ``nonrepairable'', or ``flood'', or apply any of those terms 
     to any passenger motor vehicle (but not to a part or part 
     assembly separate from a passenger motor vehicle); (this 
     requirement does not preempt state use of the terms 
     ``passenger motor vehicle'' or ``older model salvage'' in 
     unrelated statutes.
       Set forth titling, recordkeeping, anti-theft inspection, or 
     control procedures in connection with a salvage, rebuilt 
     salvage, nonrepairable, or flood vehicle.
       Nothing is this law may be construed to affect any private 
     right of action under state law.
       Additional disclosures of a passenger motor vehicle's title 
     status or history, in addition to the terms defined in this 
     law, shall not be deemed inconsistent.
       States receiving funds shall make titling information 
     maintained by the state available for use in operating the 
     National Motor Vehicle Title Information System (NMVTIS). 
     Participating states, before issuing a certificate of title, 
     shall perform instant title-verification checks.
       Maryland designates the following brands:

----------------------------------------------------------------------------------------------------------------
                SALVAGE BRAND                                             TITLE BRAND
----------------------------------------------------------------------------------------------------------------
Damage is greater than fair market value.....  This will cause the title to be branded REBUILT SALVAGE. Only
                                                vehicles less than 7 years old are to be branded when converted
                                                to a title. Once branded, the brand is to be carried through to
                                                subsequent titles.
Damage is equal to or less than fair market    The title will not be branded. DO NOT ENTER XSALVG IN THE BRAND
 value.                                         FIELD. THE TITLE IS NOT TO BE BRANDED.
Not Rebuildable, Parts Only, Not to be         Cannot be converted into a title.
 Retitled.
Abandoned Vehicle Note: S. 655 does not        This will cause the title to be branded REBUILT SALVAGE. This
 provide for this category.                     applies to all vehicles regardless of subsequent titles.
Out of State Salvage Certificate.............  This will cause the title to be branded XSALVAGE. The brand is to
                                                be carried through to subsequent titles.
Out of State Titles Branded; SALVAGE,          XSALVAGE will show in the brand field or the brand from the out-
 XSALVAGE, FLOOD, etc.                          of-state title will be entered in the brand field. The brand is
                                                to be carried through to subsequent titles.
----------------------------------------------------------------------------------------------------------------

                                                
                                  ____
                                 Michigan Department of State,

                                      Lansing, MI, April 16, 1999.
     Re: comments on companion salvage titling legislation.

     Linda Lewis,
     Legislative Director, American Association of Motor Vehicle 
         Administrators, Arlington, VA
       Dear Ms. Lewis: After receiving Kenneth Beam's Legislative 
     Alert last Friday regarding the recently introduced Companion 
     Salvage Titling legislation (S. 678), we did our best to 
     quickly review and compile comments from a variety of areas 
     within our Department. We agree with AAMVA's assessment that 
     this bill could be very problematic for states to implement, 
     for a variety of reasons. Michigan feels very strongly that 
     this bill should not move forward, and that any action on the 
     subject of Salvage Titling should follow the direction of the 
     AAMVA-sponsored Salvage bill (S. 655). However, given the 
     tight timeframes for response and our need to solicit input 
     from many areas of our Department, we have only had time for 
     a very cursory review of this legislation. If this bill has 
     any chance of moving forward, we would appreciate prompt 
     notification, so that we can prepare a more detailed summary 
     of our concerns and suggestions.
       An over-riding problem with S. 678 is the lack of detail 
     regarding the specific requirements that would be imposed. In 
     its current version, S. 678 creates new terminology, 
     categories, enforcement requirements, and other 
     implementation language that seriously lacks detail with 
     regard to actual requirements. This type of approach would 
     leave definition of critical details up to the rules 
     promulgation process, which is a major timing problem in that 
     detailed concerns would not be addressed until after passage 
     of the bill.
       The proposed changes appear to be quite complex, as well as 
     costly overall, and there is no provision for State funding. 
     In addition, many issues would require State legislation that 
     would be difficult to obtain, and difficult to implement, 
     without a corresponding need or significant improvement as 
     compared to the AAMVA-supported bill. Also, our Department is 
     unable to take on any new initiatives requiring major data 
     processing changes, due to Year 2000 and other priorities, so 
     these changes would frankly not be able to be implemented in 
     Michigan within any reasonable timeframe.
       Other more specific concerns include:
       The companion bill would make substantial changes to 
     Michigan's current definitions of ``salvage'' and ``scrap'' 
     vehicles, adds requirements related to leased vehicles, and 
     includes a definition of ``flood'' vehicles different from 
     what AAMVA proposes. We see all of these issues as very 
     problematic for Michigan, requiring State legislation that 
     would prove difficult to pass, and would cause a variety of 
     problems from an implementation standpoint--including major 
     overhauls to our computer system, which is an unrealistic 
     expectation.
       Sellers of salvage, flood, or non-repairable vehicles would 
     be required to provide written disclosure of these facts, 
     which would have to be signed by the seller and the buyer. 
     This is another issue that would require passage of State 
     legislation, and would also be very difficult from an 
     enforcement standpoint.
       There are several potential title format issues, including 
     requirements for attachments, that we see as being unworkable 
     and quite difficult from an implementation standpoint.
       As AAMVA has already pointed out, the new 65% threshold for 
     salvage vehicles and the disclosure requirement for damages 
     greater than $3,000 are both unworkable and unrealistic, 
     especially given current vehicle values. These portions of 
     the proposal also create problems related to those already 
     mentioned, such as title format and computer programming 
     issues, without providing a justifiable improvement to the 
     system.
       This proposal also allows a person who rebuilds a salvage 
     or flood-damaged vehicle to certify its road-worthiness. This 
     raises conflict of interest concerns. (By comparison, 
     Michigan law requires a rebuilt salvage vehicle to be 
     inspected by a specially trained law enforcement officer.)
       Again, Michigan feels very strongly that the Companion 
     Salvage Titling legislation introduced by Senator Feinstein 
     has serious flaws, lacks crucial detail regarding 
     implementation options, and poses nothing that would present 
     improvements to the Lott bill already introduced and 
     supported by AAMVA.
       Please do whatever possible to ensure we are informed of 
     any positive action on this bill. If you need additional 
     details or have any questions on our position, please do not 
     hesitate to contact me.
           Sincerely,

                                              Judith Overbeek,

                                        Deputy Secretary of State,
     Service Delivery Administration.
                                  ____

         Office of Motor Vehicles, Department of Public Safety and 
           Corrections,
                                     Baton Rouge, LA, May 3, 1999.
     AAMVA, Arlington, VA.

     Attention: Linda Lewis

       Dear Ms. Lewis: In regard to the Salvaged and Damaged Motor 
     Vehicle Information Disclosure Act. S. 678, the State of 
     Louisiana has very serious concerns regarding many 
     provisions, as follows:
       The 65% threshold for salvage vehicles.
       Definitions regarding non-repairable and major damage.
       Secure paper disclosure requirements.
       Lack of grant funds for implementation.
       We believe that Louisiana has a good salvage title law in 
     place. As a state that has been branding salvage and rebuilt 
     vehicles for a number of years, it is frustrating to see 
     legislation that will result in problems for our state. We've 
     come so far in this area, the thought of increasing an 
     already complex, cumbersome procedure is disturbing. This Act 
     is another attempt to ``punish the bad guys'' with something 
     that will, in reality, only ``punish the good guys.''
       Thank you for the opportunity to respond, and I know you 
     will convey our opinion that this legislation will not 
     increase uniformity among the jurisdictions. It will merely 
     place unnecessary burdens on state agencies who are already 
     force to ``do more with less'' and trying to eliminate 
     bureaucratic red tape, not create it.

[[Page 9058]]

       Please keep us posted of any additional developments 
     regarding this issue.
           Sincerely,
                                                    Kay Covington,
     Commissioner.
                                  ____


  S. 678--Salvage and Damaged Motor Vehicle Information Disclosure Act

       No grant monies include, provision that if State does not 
     comply State may not receive grant funds under 30503(c).
       Definitions: Salvage--65% damage of retail value*; Non-
     Repairable--90% damage of retail value; and Major Damage--
     $3000.00 damage on one incident.
       *Salvage can also be defined when designated by owner or 
     when vehicle is transferred to insurance carrier in 
     connection with damage.
       Disclosure Requirement: Requires States to place a 
     disclosure on title, within one year of passage of law, 
     stating whether vehicle is salvage, flood damaged, non-
     repairable or substained major damage.
       Disclosure must be on secure paper and must be treated like 
     the conforming title and odometer law.
       Dealers and lessors must retain disclosure for 5 years.
       State must be notified of all vehicles that are 
     unrepairable.
       Requirements for Rebuilt Vehicles: (1) Certification of 
     inspection from rebuilder stating condition of vehicle (must 
     be on secure paper), and
       (2) decal placed on door jam stating.
       Non-Repairable cannot go back on road. May only be 
     transferred to an insurance carrier, automobile recycler or 
     dismantler.
       After State receives disclosure of unrepairable that 
     vehicle may not be licensed for use in that State.
       Proposed law states that a person who owns motor vehicles 
     that are used for personal, family, or household use shall 
     not be liable for failure to provide disclosure, unless they 
     have actual knowledge of requirement for disclosure.
                                  ____

                                                State of New York,


                                 Department of Motor Vehicles,

                                       Albany, NY, April 15, 1999.
     Linda Lewis,
     AAMVA, Arlington, VA
       Dear Ms. Lewis: In a March 31, 1999 memo to Chief Motor 
     Vehicle Administrators and Chief Law Enforcement Officers, 
     Mr. Kenneth Beam requested that comments and concerns 
     regarding the Salvaged and Damaged Motor Vehicle Information 
     Disclosure Act, S. 678, introduced by Senator Dianne 
     Feinstein, be forwarded to your attention. This legislation 
     is companion legislation to the National Salvage Motor 
     Vehicle Consumer Protection Act, S. 655, introduced by 
     Senator Lott.
       Referring to S. 678 introduced by Senator Feinstein, the 
     New York State Department of Motor Vehicles agrees with the 
     concerns raised by AAMVA in their response to the National 
     Association of Attorneys General Working Group (NAAG), 
     specifically: The 65% threshold for damage in order to 
     declare a vehicle a salvage vehicle; the 90% non-repairable 
     threshold; the $3,000 limit of damages attributable to one 
     (1) incident; the requirement of compliance in order to 
     receive federal funding for NMVTIS; and the lack of incentive 
     grants for states that implement the legislation.
       The 65% threshold for damage in order to declare a vehicle 
     a salvage vehicle is much lower than the 75% that we 
     established through extensive discussions with the insurance 
     industry and others in New York. Further, it is also lower 
     than the recommendation made by the Presidential Commission 
     established in 1992 from the Anti-Car Theft Act.
       Due to the ever-rising expense of owning a new vehicle, the 
     $3,000 limit for damages attributable to one (1) incident 
     would result in a remarkably high number of vehicles labeled 
     as salvage. With the average cost of a new vehicle 
     approximately $22,000, a $3,000 limit for damages is less 
     than 15%.
       Lastly, Senator Feinstein's proposal requires states to 
     comply in order to receive funding for NMVTIS and does not 
     include incentive grants for states implementing the 
     legislation. The Lott proposal does not call for compliance-
     based NMVTIS funding, and does offer incentive grants for 
     implementation.
       In short, the New York State Department of Motor Vehicles 
     does not support the Salvaged and Damaged Motor Vehicle 
     Information Disclosure Act, S. 678 introduced by Senator 
     Dianne Feinstein, due to the concerns identified above.
           Sincerely,
                                          Richard E. Jackson, Jr.,
     Commissioner.
                                  ____



                                                    Idaho DMV,

                                                   April 15, 1999.
     Lewis, Linda,
     `[email protected]'.

     Subject: S. 678 Diane Feinstein Proposal

       Idaho's current statutes do not conform to the requirements 
     of S. 678, and it is unlikely that legislation could be 
     enacted to conform. Therefore, funding to implement NMVTIS in 
     Idaho would be jeopardized.
       It appears that he documentation requirements of S. 678 are 
     onerous, much more all-inclusive than the implementation of 
     the secure power of attorney processes. If disclosure 
     documents are required to issue every title transfer, many 
     transactions would be delayed, customers would be turned away 
     and inconvenienced. Public perception of the DMV would 
     suffer.
       We are also concerned about the public resistance to non-
     registration of vehicles that have sustained damage that is 
     90% of the fair retail market value before it was damaged. 
     For many older vehicles one dent would require that the 
     vehicle go the crusher, even though it may be a fully 
     operational and safe vehicle.
                                                 Edward R. Pemble,
     Vehicle Services Manager.
                                  ____

                                              Oregon Department of


                                 Transportation, DMV Services,

                                        Salem, OR, April 30, 1999.
     Linda Lewis
     Director of Public & Legislative Affairs, American 
         Association of Motor Vehicle Administrators, Arlington, 
         VA.
       Dear Ms. Lewis: Brendan Peters requested a letter from 
     Oregon DMV regarding Senate Bill 678 and Senate Bill 655 
     pertaining to salvage of motor vehicles.
       We are taking no position on either bill, but I hope the 
     following comments on both bills will be helpful in your up-
     coming meetings with legislators.


                            Senate Bill 678

       1. Requires excessive paperwork for both the public and 
     state agencies. For example, forms must be maintained for 
     five years.
       2. There is no allowance for any type of electronic 
     process.
       3. The 65% threshold for salvage vehicles is lower than all 
     states' current threshold. Oregon has a threshold for salvage 
     vehicles of 80% and many customers feel 80% is too high.
       4. The definition of ``major damage'' may impact the 
     majority of recent year model vehicles.
       5. Requires compliance with this legislation in order to 
     receive any funding for NMVTIS (National Motor Vehicle Title 
     Information System). Tying NMVTIS funding to this legislation 
     has potential to reduce the NMVTIS benefits if lack of 
     funding prevents states from participating in NMVTIS.


                            seante bill 655

       1. Has a lower impact to the public and state agencies.
       2. Allows for an electronic process.
       3. The anti-theft inspection, if required, could have 
     significant workload impact.
       4. There is no tie to the funding for NMVTIS.
       5. There are provisions for an incentive grant to provide 
     money to states to implement legislation.
       We hope these comments can be used to assure that federal 
     legislation on the salvage of motor vehicles accomplishes its 
     intended purpose without undo hardships on the public and the 
     states that must implement the law.
           Sincerely,
                                                      Mari Miller,
     Manager, Program Services.
                                  ____



                       Wisconsin Department of Transportation,

                                      Madison, WI, April 14, 1999.
     Linda Lewis,
     AAMVA, Arlington, VA.
       Dear Linda: I'm writing on behalf of the Wisconsin Division 
     of Motor Vehicles to respond to your request for comments on 
     the bill titled ``Salvaged and Damaged Motor Vehicle 
     Information Disclosure Act'' (S. 678) introduced by Senator 
     Feinstein.
       Our concerns with this bill are:


                              definitions

       It applies to all motor vehicles; no limit on age or value.
       Flood damage definition is water-line based like the Lott 
     bill, but it doesn't go on to specify that electronic 
     components must actually have been damaged.
       The whole concept of ``major damage'' being defined 
     strictly as a dollar amount ($3,000) with no provision for 
     rising prices seems problematic. A late model luxury car 
     could have very minimal damage with $3,000 repair costs, 
     while an old economy car could be considered nonrepairable 
     with $3,000 damage.
       Like the Lott bill, salvage is defined both as a percentage 
     of fair market value (65% in S. 678 and 75% in S. 655) and 
     anything an insurance company pays a claim on and acquires 
     ownership of. The Lott bill excludes theft recoveries unless 
     damaged 75%. When we worked on Wisconsin's title branding 
     law, insurance companies were very upset at salvage-branding 
     what they called ``convenience totals.'' The insurance 
     industry will probably object to that in these bills, too.


                               disclosure

       S. 678 requires: written disclosure on secure paper of 
     salvage, flood, nonrepairable or major damage (plus a 
     description of each occurrence--attached to the title. Each 
     reassignment needs its own disclosure statement. We've been 
     trying to avoid attachments to the title and make all 
     required disclosures on the title itself.
       It looks like the disclosure statement could be made in the 
     title assignment area if

[[Page 9059]]

     the format conforms with federal regulations (when they are 
     promulgated).
       It appears we'd need to have the attached disclosures 
     whether or not there is something to disclose, which could 
     mean lots of go-backs for incomplete applications.


                       rebuilding and inspection

       The restrictions imposed by this bill would seem to 
     significantly reduce interest in rebuilding flood or salvage 
     vehicles. The rebuilder is also the inspector in this bill 
     and he or she must: Sign and attach to the title, a secure 
     inspection certificate attesting that ``original manufacturer 
     established repair procedures or specifications'' were 
     followed in making the repairs and inspections; affix a decal 
     to the door jamb or other conspicuous place; follow 
     ``regulations promulgated'' describing qualifications and 
     equipment required to do inspection certifications; follow 
     ``regulations promulgated'' that establish minimum steps for 
     inspection; and post up to a $250,000 bond (if required) to 
     protect the public against unsafe or inadequate repairs or 
     improper inspection certification.
       So, the person who repairs a flood or salvage vehicle also 
     inspects it for safety and quality of repair--but not anti-
     theft. There doesn't seem to be a provision for anti-theft 
     inspection.


                         nonrepairable vehicles

       Nonrepairable vehicles can't be registered and can only be 
     transferred to an insurance company, automotive recycler or 
     dismantler--and only for the purpose of dismantling or 
     crushing.
       So, the owner of a classic car that's damaged more than 90% 
     of its fair market value has no choice but to have it 
     dismantled or crushed--even if willing to pay whatever it 
     costs to get it back to legal operating condition.


                               penalties

       A civil penalty of up to $2,000 may be charged for ``a 
     violation''--the violation doesn't have to be ``knowingly and 
     willfully'' performed.
       However, if it is ``knowingly and willfully'' performed, 
     the penalty is the $2,000 fine, or three years in prison, or 
     both.


                             miscellaneous

       We'd have to revise any of our laws that are inconsistent 
     with this. We would be able to keep our other brands 
     (manufacturer buyback, police, taxi, non-USA standard and 
     insurance claim--if we revised the percentage to 30-65% 
     damage).
       Thank you for this opportunity to offer comments on the 
     ``Salvaged and Damaged Motor Vehicle Information Disclosure 
     Act.'' On behalf of the Wisconsin DMV, I hope our ideas prove 
     useful. Please do not hesitate to contact me or Carson 
     Frazier (with our Bureau of Vehicle Services at 608-266-7857) 
     if you have any questions.
           Sincerely,
                                                   Roger D. Cross,
     Administrator.
                                  ____

                                                 State of Alabama,


                                        Department of Revenue,

                                   Montgomery, AL, April 14, 1999.
     Ms. Linda Lewis,
     Public and Legislative Affairs, AAMVA,
     Arlington, VA.
       Dear Ms. Lewis: Pursuant to President Beam's memo of March 
     31, 1999, we have reviewed S. 678 to ascertain its possible 
     effects on Alabama. Below is a listing of problems observed.
       1. The bill establishes a 65% threshold for salvage 
     vehicles. Alabama has a 75% threshold to determine when a 
     vehicle is declared salvage. In addition, the proposed 
     legislation states that ``if the full cost of the damages 
     suffered in 1 incident is attributable only to cosmetic 
     damages, those damages shall not constitute major damage.'' 
     Alabama has no such exemption for cosmetic damage when 
     determining whether a vehicle qualifies as a salvage vehicle.
       2. The bill has a specific definition for a ``flood 
     vehicle.'' Alabama law does not distinguish between salvage 
     vehicles that have been declared salvage due to flood damage 
     and vehicles that have been declared salvage due to other 
     events. Vehicles that suffer flood damage in Alabama are 
     subject to the 75% threshold for a salvage vehicle and 
     receive a salvage title if damage to the vehicle is equal to 
     or greater than 75% of the retail value for the vehicle. 
     Alabama law does not require a vehicle to be branded as a 
     ``flood vehicle.''
       3. The bill provides a definition for a leased vehicle that 
     differentiates the vehicle from a non-leased motor vehicle. 
     Alabama law makes no such distinction.
       4. The written disclosure requirements mandated by the bill 
     would be difficult to comply with when transfers involves 
     repossessions, disposal of an abandoned motor vehicles, 
     situations where ownership passes as a result of the death of 
     an owner, non-voluntary transfers by operation of law and 
     other situations where the transferor may not have personal 
     knowledge of previous vehicle damage.
       5. The bill's prescribed use of a secure power of attorney 
     could prove to be burdensome in situations where there was a 
     transfer between individuals who do not have access to the 
     secure document.
       6. The bill would be an unfunded mandate that would require 
     a costly re-design of the Alabama certificate of title and 
     the design and implementation of a new secure power of 
     attorney document and secure inspection form. Additional 
     costs would include: training costs for designated agents and 
     reprogramming costs for county offices, automobile dealers, 
     financial institutions, and insurance companies.
       7. The disclosure requirements in the bill do not address 
     vehicle damage that occurred prior to the proposed 
     implementation date of the legislation. Therefore, it is 
     unlikely that this information would not be readily 
     accessible to transferor of the vehicle for a subsequent 
     disclosure statement.
       8. The bill does not clearly specify who is responsible for 
     conducting a rebuilt salvage vehicle inspection.
       In summary, the bill would be an administrative nightmare 
     for the State of Alabama to implement. In addition, based 
     upon the past experience of implementing the federal truth in 
     mileage act, the gains in uniformity among states would be 
     minimal for a substantial period of time and the costs would 
     be both immediate and significant. If additional input is 
     desired, please feel free to contact me at the address listed 
     below or at telephone (334) 242-9013.
           Sincerely,

                                                  Mike Gamble,

                               Assistant Supervisor, Motor Vehicle
     Division/Title Section.

                          ____________________