[Senate Report 105-265]
[From the U.S. Government Publishing Office]
Calendar No. 495
105th Congress Report
SENATE
2d Session 105-265
_______________________________________________________________________
NATIONAL MOTOR VEHICLE SAFETY, ANTI-THEFT, TITLE REFORM, AND CONSUMER
PROTECTION ACT OF 1997
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 852
July 27, 1998.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fifth congress
second session
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington WENDELL H. FORD, Kentucky
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA SNOWE, Maine JOHN F. KERRY, Massachusetts
JOHN ASHCROFT, Missouri JOHN B. BREAUX, Louisiana
BILL FRIST, Tennessee RICHARD H. BRYAN, Nevada
SPENCER ABRAHAM, Michigan BYRON L. DORGAN, North Dakota
SAM BROWNBACK, Kansas RON WYDEN, Oregon
John Raidt, Staff Director
Mark Buse, Policy Director
Ivan A. Schlager, Democratic Chief Counsel and Staff Director
James S. W. Drewry, Democratic General Counsel
Calendar No. 495
105th Congress Report
SENATE
2d Session 105-265
_______________________________________________________________________
NATIONAL MOTOR VEHICLE SAFETY, ANTI-THEFT, TITLE REFORM, AND CONSUMER
PROTECTION ACT OF 1997
_______
July 27, 1998.--Ordered to be printed
_______________________________________________________________________
Mr. McCain, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 852]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 852) ``A Bill to establish
nationally uniform requirements regarding the titling and
registration of salvage, nonrepairable, and rebuilt vehicles'',
having considered the same, reports favorably thereon with an
amendment in the nature of a substitute and recommends that the
bill (as amended) do pass.
Purpose of the Bill
The purpose of the bill is to foster nationally uniform
requirements regarding the titling and registration of salvage,
rebuilt salvage, nonrepairable, and flood vehicles.
Background and Needs
Inconsistencies in state laws concerning the titling of
automobiles foster automobile theft and expose consumers to
fraud by making it possible to hide information that a vehicle
was massively damaged and then rebuilt.
The Anti-Car Theft Act of 1992 (P.L. 102-519) addressed
differences in state automobile titling laws used by criminals
to thwart law enforcement efforts. The Act also established a
task force to ``study the problems which relate to motor
vehicle titling, vehicle registration, and controls over motor
vehicle salvage which may affect the motor vehicle theft
problem.''
This task force examined two problems related to salvage
vehicles: vehicle theft and how consumers could obtain
information that a vehicle was rebuilt from salvage.
Vehicle theft is facilitated by the practice of ``title
washing'' in which the vehicle identification number (VIN) from
a salvage vehicle is placed on a similar stolen vehicle. The
vehicle is then retitled in a state that does not ``brand'' the
title as belonging to a salvage vehicle. By retitling the car
in this manner, the thief has ``washed'' the title of the
salvage brand so that it may be resold with relative ease.
Title washing can also deprive consumers of important
information about a vehicle even when theft is not involved. If
a vehicle is significantly damaged, the owner's insurance
company often takes title to the vehicle and sells it as a
salvage vehicle. That salvage vehicle may be purchased by a
rebuilder, rebuilt and then resold without the purchaser
knowing the vehicle has been rebuilt. Information about the
vehicle's history is lost if someone in the chain of ownership
washes the title of the salvage brand by retitling the vehicle
in a state that does not carry forward the title brands of
other states. When a title has been washed in this manner, all
later purchasers are deprived of information that may alert
them to potential problems with the vehicle. These later
purchasers may include auto dealers that purchased the vehicle
at a used car auction or an individual purchasing the car for
personal use.
The Motor Vehicle Titling, Registration, and Salvage Advisory
Committee examined these concerns and transmitted its report to
the President and Congress on February 10, 1994. Among the
Advisory Committee's recommendations were:
federal legislation to create uniform
definitions for certain title brands, including
``salvage,'' ``nonrepairable,'' and ``flood vehicle;''
national standards for how and when
ownership documents for salvage and nonrepairable
vehicles must be applied for and issued;
how and when duplicate titles should be
issued; and
national uniform standards for VIN and
safety inspections of rebuilt salvage vehicles.
S. 852 is based on the Advisory Committee's recommendations.
Legislative History
Senators Lott and Ford introduced S. 852 on June 9, 1997. The
Committee held a hearing on the bill on Thursday, September 25,
1997.
A companion bill, H.R. 1839, was favorably reported by the
House Commerce Committee (H. Rept. 105-285) on September 30,
1997. The House of Representatives passed H.R. 1839 on November
4, 1997 by a vote of 336 to 72. At the Committee's executive
session, Senator Lott put forward an amendment in the nature of
a substitute nearly identical to the text of H.R. 1839. On
November 4, 1997 the Committee in open executive session, by a
roll call vote of 16-4, ordered S. 852 reported with the Lott
amendment.
Summary of Major Provisions
S. 852 would establish incentives for states to participate
in a regulatory framework that would establish nationally
uniform definitions for certain terms used on vehicle titles
such as: ``salvage vehicle'', ``rebuilt salvage vehicle'',
``nonrepairable vehicle'', and ``flood vehicle''. In
participating states, the legislation would preempt state law
to the extent that it is inconsistent with these definitions.
S. 852 would require participating states, in licensing a
passenger motor vehicle whose ownership has been transferred,
to disclose on the certificate of title whenever records
indicate that such vehicle was previously issued a title that
contained a word or symbol signifying that it was salvage,
unrebuildable, parts only, scrap, junk, nonrepairable,
reconstructed, rebuilt or that it had been damaged by flood.
The legislation would require the Secretary of Transportation
to establish, for participating states, nationally uniform
standards for titles and title brands, including standards for
anti-theft inspections and safety inspections of rebuilt
vehicles for states that require safety inspections.
S. 852 would establish civil and criminal penalties for
violations of the Act.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 14, 1998.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 852, the National
Salvage Motor Vehicle Consumer Protection Act of 1997.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts for federal
costs are Joanna Wilson and Kristen Layman. The contact for the
state and local reports is Pepper Santalucia, and the contact
for the private-sector impact is Lesley Frymier.
Sincerely,
June E. O'Neill, Director.
Enclosure.
congressional budget office cost estimate
S. 852--National Salvage Motor Vehicle Consumer Protection Act of 1997
Summary: Assuming appropriation of the necessary amounts,
CBO estimates that enacting S. 852 would result in additional
discretionary spending of approximately $700,000 by the
Department of Transportation (DOT) over the next five fiscal
years. The legislation could affect direct spending and
receipts; therefore, pay-as-you-go procedures would apply. CBO
estimates that any such effects would be insignificant.
S. 852 contains no intergovernmental mandates as defined in
the Unfunded Mandates Reform Act (UMRA). It would, however,
place additional requirements on states that choose to accept
federal funds to improve their motor vehicle titling systems.
The bill would impose private-sector mandates, but CBO
estimates that the direct costs of those mandates would not
exceed the annual threshold established in UMRA ($100 million
in 1996, adjusted annually for inflation) in any of the next
five years.
Description of the bill's major provisions: S. 852 would
establish uniform national standards of titling and registering
salvage, nonrepairable, and rebuilt vehicles. For states that
choose to participate in the National Motor Vehicle Title
Information System (NMVTIS), the bill specifies information
that must be included on a vehicle title and procedures that
must be followed to minimize the opportunity for fraud. NMVTIS
is an information network that will seek to provide all
participants with instant and reliable access to information
maintained by the states related to automobile titling. States
would not have to comply with the system's national standards
in order to receive federal grants for activities related to
developing and using title information.
The legislation would require that all rebuilt salvage
vehicles pass a state anti-theft inspection, and lists
procedures that should be included in an anti-theft inspection.
For those states that choose to require a safety inspection of
rebuilt salvage vehicles, S. 852 would direct the Secretary of
Transportation to establish uniform national safety inspection
criteria. The legislation would establish civil and criminal
penalties for individuals who knowingly provide false
information on disclosures made pursuant to its provisions, or
who violate its vehicle titling and disclosure requirements.
S. 852 stipulates that no state may participate in NMVTIS
unless it complies with the uniform titling standards in the
bill and standards detailed in chapter 305 of Title 49 of the
U.S. Code. The legislation would permit the Attorney General to
make reasonable and necessary grants to participating states to
assist them in becoming part of NMVTIS.
Estimated cost to the Federal Government: CBO estimates
that implementing S. 852 would affect discretionary spending by
both the Department of Transportation and the Department of
Justice (DOJ). The Anti-Car Theft Improvements Act of 1995
(Public Law 104-152) transferred federal authority over the
title information system from the Secretary of Transportation
to the Attorney General. The Secretary of Transportation
retains responsibility for formulating and monitoring federal
regulations that establish uniform safety and titling criteria.
DOT spending subject to appropriation
CBO estimates that DOT would spend approximately $700,000
over the 1999-2003 period to implement S. 852, assuming the
availability of appropriated funds.
DOT expects to contract out the task of writing a rule that
specifies uniform safety provisions for states that choose to
require safety inspections. The total cost of writing such a
rule would be approximately $75,000, and it would cost
approximately $250,000 to determine whether user fees would
cover state costs of developing uniform safety and titling
provisions. This sum includes the cost of surveying the states
and formulating a report for the appropriate committees of the
Congress. In addition, DOT estimates that it would need to hire
one full-time employee to review safety and titling programs of
individual states. The new position would likely be at the GS-
15 level, resulting in costs for compensation and expenses
totaling about $350,000 over the 1999-2003 period. The other
requirements this legislation would impose on DOT are likely to
have negligible costs.
DOJ spending subject to appropriation
DOJ is responsible for administering and funding NMVTIS,
and CBO expects that enactment of S. 852 would not
significantly affect the department's costs for establishing
the system. Under current law, CBO expects that all states will
participate in NMVTIS. Based on information from the American
Association of Motor Vehicle Administrators (AAMVA), we
anticipate that this effort will require federal grants of
about $300,000 per titling jurisdiction (the 50 states and
Washington, D.C.) and $6 million for network development and
staff coordination expenses, for a total cost of $21 million
over the next five years, subject to appropriation of the
necessary amounts. Based on information from AAMVA and DOJ, CBO
expects that enacting S. 852 would not have a significant
impact on states' participation in NMVTIS. Thus, we estimate
that the bill would not have any significant effect on DOJ
spending.
Direct spending and revenues
Imposing the new civil and criminal fines specified by S.
852 could cause an increase in governmental receipts, but CBO
estimates that any such increase would likely be less than
$500,000 annually. Criminal fines are deposited in the Crime
Victims Fund and spent in the following year. Thus, any
increase in revenues from criminal fines would be matched by an
increase in direct spending, with a one-year lag.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act specifies pay-as-you-go
procedures for legislation affecting direct spending or
receipts. Imposing the new civil and criminal fines contained
in S. 852 could result in an increase in both governmental
receipts and direct spending, but CBO estimates that any such
changes would be less than $500,000 a year.
Estimated impact on State, local, and tribal governments:
S. 852 contains no intergovernmental mandates as defined in
UMRA. It would, however, place additional requirements on
states that choose to participate in the National Motor Vehicle
Title Information System. The goal of NMVTIS is to build a
national information network that will allow states to share
information about motor vehicle titles. A state accepting
federal funds to help it link to the network could face
additional costs if its existingregulations and procedures for
inspecting and titling salvage, rebuilt, and flood-damaged vehicles
differ from the federal standards.
Under the bill, if a state accepted federal funds to
participate in NMVTIS but did not come into compliance with the
requirements in the bill by a specified time, its laws would be
preempted to the extent that they were inconsistent with the
bill's requirements. A state could avoid a preemption of its
laws by placing a notice of its non-compliance on the titles
and ownership certificates that it issues. Because any
preemption would result from states choosing to accept federal
funds and then not coming into conformity with the federal
standards, CBO would not consider it an intergovernmental
mandate.
Every state has different procedures currently in place for
regulating salvage and rebuilt vehicles and each would face
different costs depending on the extent to which it chose to
modify its system to conform to the federal standards. For some
states, the changes would be mostly administrative and would
involve activities such as modifying the position of
information on vehicle titles, printing new forms, and adopting
changes to definitions and procedures for handling titles.
These states would face modest one-time costs to bring their
regulations and procedures into conformity.
Costs in states that chose to establish new procedures or
systems would be higher and would include both these one-time
costs and new annual operating expenses. For example, many
states do not issue titles to nonrepairable, or junk, vehicles
and may choose to begin doing so when they participate in
NMVTIS. Some states would have to expand their anti-theft
inspection programs to meet the uniform standards. Costs for
these states could reach into the millions of dollars, and it
is unclear whether states would be able to use the grant money
available to them for NMVTIS to help offset these costs.
Estimated impact on the private sector: S. 852 would impose
a new federal private-sector mandate on sellers of rebuilt
salvage vehicles and would change an existing mandate on junk
yard operators, salvage yard operators, and insurance carriers.
Based on information provided by government and industry
sources, CBO estimates that the direct costs of these private-
sector mandates would not exceed the annual threshold
established in UMRA ($100 million in 1996, adjusted annually
for inflation) in any year over the next five years. The bill
also would impose new requirements on the private sector in
states receiving grants to support their participation in the
National Motor Vehicle Title Information System.
S. 852 would require persons transferring ownership of
rebuilt salvage vehicles to give the transferee a written
disclosure that the vehicle is a rebuilt salvage vehicle, when
such person has actual knowledge of the status of the vehicle.
CBO estimates that the costs of this new mandate would be
minimal.
S. 852 would modify an existing mandate on junk yard
operators, salvage yard operators, and insurance carriers.
Under current law, these entities are required to include an
inventory of junk and salvage automobiles in their monthly
reports to the operator of the NMVTIS. Under S. 852, they would
be required to include an inventory of salvage, nonrepairable,
and rebuilt salvage vehicles in their reports. Based on
information provided by the private sector, CBO estimates that
the direct costs of the new mandate would probably be less than
the costs of the existing mandate.
In addition, the bill outlines requirements for states
receiving funds under the NMVTIS. If states receive grants
under that program, additional requirements would be imposed on
the private sector related to the titling and labeling of
rebuilt salvage vehicles, the certification of nonrepairable
vehicles, the labeling and disclosure of flood vehicles, and
the disclosure of damage to salvage vehicles. CBO expects that
the costs of those requirements would be small.
Previous CBO estimate: On August 8, 1997, CBO prepared a
cost estimate for H.R. 1839, the National Salvage Motor Vehicle
Consumer Protection Act of 1997, as ordered reported by the
House Committee on Commerce on July 23, 1997. That bill would
preempt the laws of states participating in NMVTIS if those
laws were not consistent with the requirements in the bill.
Under H.R. 1839, states could not accept federal funds for
NMVTIS without either changing their standards and procedures
or having them preempted by federal law. Therefore, CBO
estimated that only a quarter of the states would choose to
participate in the program, and that, as a result, DOJ would
save approximately $15 million over the first five years after
enactment. S. 852 would only require that states admit they are
not in compliance and would not prohibit federal funding.
Therefore, CBO assumes most states would still be eligible for
federal grants under S. 852, and we do not estimate any
significant savings for DOJ under this bill.
Estimate prepared by: Federal Costs: Joanna Wilson and
Kristen Layman. Impact on State, Local, and Tribal Governments:
Pepper Santalucia. Impact on the Private Sector: Lesley
Frymier.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation:
Number of Persons Covered
The legislation would apply to those involved with vehicles
that meet the definition of a salvage vehicle, a flood vehicle,
or a nonrepairable vehicle. The legislation would foster
uniform definitions of those terms and thereby better inform
all consumers (including auto dealers and the ultimate driver
of a vehicle) about the history of a vehicle that has been
massively damaged and then repaired.
Economic Impact
This legislation would have minimal impact on the nation's
economy. It would aid the appropriate functioning of the market
for rebuilt motor vehicles but that would have little
macroeconomic effect.
Privacy and Paperwork
This legislation would not have any significant adverse
impact on the personal privacy of the individuals affected nor
would it institute burdensome paperwork requirements. The
legislation would require that if a car is massively damaged, a
person must obtain a salvage title and then have the car
inspected before the car is issued a title that would permit it
to be driven on roads and highways. The vehicle's title would
then reflect its history and indicate that it had been rebuilt.
In some states, these procedures would require both additional
disclosures of the vehicle's history and the acquisition of a
new title for the vehicle once it has been rebuilt.
Section-by-section Analysis
Section 1. Short title
This section provides that the bill may be cited as the
``National Salvage Motor Vehicle Consumer Protection Act of
1997.''
Section 2. Motor vehicle titling and disclosure requirements
Subsection (a) of this section amends title 49, United States
Code, by inserting at its end a new chapter, chapter 333,
``Automobile Safety and Title Disclosure Requirements''.
Subsection (b) makes a conforming amendment to the United
States Code.
The new chapter 333 is comprised of eight sections.
Sec. 33301. Definitions
Section 33301 establishes several new definitions for the
purposes of chapter 333.
The term ``salvage vehicle'' is defined as any
passenger motor vehicle which is a late model vehicle,
which has been wrecked, destroyed, or damaged to the
extent that the total estimated or actual cost of
repairs to rebuild or reconstruct that vehicle to its
roadworthy condition immediately before it was wrecked,
destroyed, or damaged exceeds 80 percent of the retail
value of the vehicle. A vehicle is also a salvage
vehicle if it is voluntarily designated by the owner as
a salvage vehicle or if the vehicle is acquired by an
insurance company after it was wrecked, destroyed, or
damaged, and was acquired pursuant to a damage
settlement (except in the case of a settlement in
connection with a recovered stolen automobile, unless
such automobile was damaged enough to meet the 80
percent threshold.
The term ``salvage title'' is defined as a passenger
motor vehicle ownership document that is issued by a
State to the owner of a salvage vehicle and is
conspicuously labeled with the word ``salvage'' across
the front.
The term ``rebuilt salvage vehicle'' is defined as a
passenger motor vehicle which was previously issued a
salvage title, has passed a State anti-theft
inspection, and has been issued a certificate stating
so. In States which require safety inspections for
rebuilt salvage vehicles, the rebuilt salvage vehicle
must pass such inspection, be issued a certificate
stating so, and have a decal stating that it is a
``Rebuilt Salvage Vehicle--Anti-theft and Safety
Inspections Passed.'' In States which do not require
safety inspections, the rebuilt salvage vehicle must
have a decal stating that it is a ``Rebuilt Salvage
Vehicle--Anti-theft Inspection Passed / No Safety
Inspection Pursuant to National Criteria.''
A ``rebuilt salvage title'' is defined as a passenger
motor vehicle ownership document that is issued to the
owner of a rebuilt salvage vehicle and is conspicuously
labeled with words indicating that it is a rebuilt
salvage vehicle and whether or notit has passed an
anti-theft inspection and a safety inspection pursuant to national
criteria.
The term ``nonrepairable vehicle'' is defined as any
passenger motor vehicle which is incapable of safe
operation on the roads and highways and which has no
resale value except as a source of parts or scrap, or
which the owner irreversibly designates as a source of
parts or scrap.
Nonrepairable vehicles are issued nonrepairable
vehicle certificates, which are defined as an ownership
document issued by the State to the owner of a
nonrepairable vehicle, and may never again be retitled.
The term ``Secretary'' refers to the Secretary of
Transportation.
The term ``late model vehicle'' is defined as any
passenger motor vehicle which has a manufacturer's
model year designation of or later than the year in
which the vehicle was wrecked, destroyed, or damaged,
or any of the six preceding years, or has a retail
value of more than $7,500. The Secretary is required to
adjust the retail value figure annually in accordance
with changes in the consumer price index.
The term ``retail value'' is defined as the actual
cash value, fair market value, or retail value of a
passenger motor vehicle as either set forth in the
current edition of any nationally recognized
compilation of retail values, which may include
automated databases, or (B) as determined by conducting
a market comparison of vehicles with like equipment and
in a similar condition.
The term ``cost of repairs'' is defined as the
estimated or actual cost of the parts used in the
repairs plus the reasonable and customary labor charges
in the community where the repairs are to be performed.
The term ``flood vehicle'' is defined as any
passenger motor vehicle that is acquired by an
insurance company as part of a damage settlement due to
water damage or a vehicle that has been submerged in
water such that rising water has reached over the door
sill, has entered the passenger or trunk compartment,
and has exposed any electrical, computerized, or
mechanical component to water. Exceptions from this
definition are provided if an inspection, conducted
using guidelines established either by the State or the
Secretary, indicates that no electrical, computerized
or mechanical components were damaged by water or if
they were damaged by water they have been repaired or
replaced.
Sec. 33302. Passenger motor vehicle titling
The provisions of section 33302 apply to any State which
participates in the National Motor Vehicle Title Information
System established under chapter 305 of title 49, United States
Code (49 U.S.C. 30501 et seq.).
Subsection (a) requires that participating States ``carry
forward'' any brand on a title signifying that the vehicle was
previously issued a title that bore any word or symbol
indicating that the vehicle was ``salvage,'' ``unrebuildable,''
``parts only,'' ``scrap,'' ``junk,'' ``nonrepairable,''
``reconstructed,'' ``rebuilt,'' that it has been damaged by
flood, or any other similar word or symbol, by disclosing such
status on the new certificate of title. States are required to
begin carrying forward other States' brands no later than one
year after the date of enactment.
Subsection (b) contains the bulk of requirements for
participating States. This subsection requires the Secretary to
issue a rule no later than 18 months after the date of
enactment requiring participating States to apply uniform
standards, procedures, and methods of control for the issuance
and control of titles for motor vehicles and for information
contained in such titles. States will have two years from the
date on which the Secretary issues the final rule to comply.
The rule issued by the Secretary is to have the following
components described in paragraphs (1) through (12).
Paragraph (1) requires the participating State to
conspicuously indicate on the face of a title whether the
vehicle is a salvage vehicle, a nonrepairable vehicle, or a
rebuilt salvage vehicle or a flood vehicle.
Paragraph (2) requires that such information be carried
forward on subsequent titles by the State or any other
participating State.
Paragraph (3) requires that any titling documents, decals,
certificates, or issuing systems used by participating States
must meet security standards which minimize the opportunity for
fraud.
Paragraph (4) requires that the certificate of title issued
by a participating State shall include the passenger motor
vehicle make, model, body type, year, odometer disclosure, and
vehicle identification number.
Paragraph (5) requires that titling documents issued by the
participating State are required to be in a uniform layout,
either established with the participating State or an
organization representing participating States.
Paragraph (6) requires that nonrepairable vehicles shall be
issued nonrepairable vehicle certificates by participating
States and shall not again be retitled.
Paragraph (7) stipulates that a salvage vehicle may not be
issued a rebuilt salvage title by a participating State unless,
after it is repaired or rebuilt, it complies with the
requirements for a rebuilt salvage vehicle outlined in section
33301(4). Any State operating under the authority of this
paragraph would be required to have an inspection program for
rebuilt salvage vehicles that meets certain defined
requirements. Such inspection programs would be subject to
continuing review by and approval of the Secretary.
Paragraph (8) requires the Secretary to adopt nationally
uniform safety inspection criteria for rebuilt salvage vehicles
for use by States requiring a safety inspection.
Paragraph (9) stipulates that no participating State may
issue a duplicate title unless it is conspicuously labeled as a
duplicate title and the State adopts procedures consistent with
the recommendations of the Motor Vehicle Titling, Registration,
and Salvage Advisory Committee.
Paragraph (10) requires participating States to employ the
ten enumerated titling and control methods described in
subparagraphs (A) through (J).
Paragraph (11) requires the seller of a passenger motor
vehicle who has actual knowledge that the vehicle was damaged
by flood to disclose that fact in writing to the buyer.
Similarly, paragraph(12) requires that lessees give the same
notice concerning flood vehicles to lessors.
Paragraph (13) permits participating States to transfer
ownership of a vehicle on a salvage title, but prohibits the
registration of the vehicle for use on the roads or highways
unless it receives a rebuilt salvage title.
Paragraph (14) explicitly permits the transfer and
registration of rebuilt salvage vehicles.
Paragraph (15) limits the transfer of nonrepairable vehicles
and prohibits the registration of those vehicles for use on the
roads and highways.
Subsection (c) requires any State that receives funds,
directly or indirectly, under section 30503(c), that does not
comply with the requirements in subsection (a) or (b) to
conspicuously print a notice on all motor vehicle titles to
indicate that the State does not conform to the uniform Federal
requirements of this bill.
Sec. 33303. Disclosure and label requirements on transfer of rebuilt
salvage vehicles
This section is intended to ensure that consumers are
provided with adequate notice that they may be purchasing a
rebuilt salvage vehicle.
Subsection (a) requires the person transferring a rebuilt
salvage vehicle, with actual knowledge of its status, to
disclose that fact in writing to the person receiving the
vehicle. Such written disclosures must be true, complete, and
conform to regulations issued by the Secretary.
Subsection (b) is meant to provide additional notice to
consumers who are purchasing rebuilt salvage vehicles at their
first retail sale after being rebuilt. This subsection requires
that the person conducting an anti-theft inspection required
under section 33301(4) in a participating State affix a label
to the window or windshield indicating that the vehicle is a
rebuilt salvage vehicle and such other information as the
Secretary may require. The label may not be removed, altered,
or rendered illegible before the rebuilt salvage vehicle is
delivered to the first retail purchaser.
Subsection (c) indicates the requirements of subsections (a)
and (b) only apply to the transfer of ownership of a rebuilt
salvage vehicle where the transfer occurs in a State that is
complying with the requirements of this section.
Sec. 33304. Report on funding
This section requires the Secretary to issue a report to
Congress, contemporaneously with the issuance of the rule under
section 33302(b), on whether participating States could meet
the costs of complying with that rule through user fees or the
earmarking of revenues collected through law enforcement
actions under the rule.
Sec. 33305. Effect on State law
As of the effective date of the rule issued under section
33302(b), the provisions of this legislation shall preempt all
State laws in participating States to the extent that they are
inconsistent with the provisions of the chapter or the rules
issued under its authority, with respect to the form of the
passenger motor vehicle titling document, definitions
established under the legislation, or titling, record keeping,
anti-theft inspection, or control procedures.
The legislation specifically provides that preemptions are
not to be construed as affecting any consumer law remedies
which may be available to residents of the participating State
for violations of the legislation. Preemption under this
subsection is limited to the terms used in the legislation.
Therefore, terms and brands other than those specifically
preempted by the legislation would not be preempted. Also, any
vehicles which may be regulated by existing State statutes, but
do not fall within the definition of passenger motor vehicle as
defined by section 33301(1), are not covered by the bill and
existing State regulatory regimes applicable to those vehicles
would remain intact. One of the central purposes of this bill
is uniformity as to a limited number of definitions so that
consumers have some information which may be relied upon as to
the vehicle's history. All State laws that deal with the
concept of ``salvage vehicles'', that is vehicles that have
been significantly damaged and then rebuilt, are not preempted.
If a State would like to have its title contain disclosures in
addition to the Federal disclosure, that is permitted as long
as the Federal term is not interfered with. For example, if a
State wanted to have a disclosure on the title if a vehicle was
damaged to more that 50 percent of its retail value, the State
may accomplish that goal by merely using a term other than
``salvage'' to describe such a vehicle. Likewise, any State
consumer law remedy that would apply to the class of vehicles
regulated by the legislation, even if the term used to refer to
those vehicles is preempted under subsection (b), would not be
inconsistent with this chapter and would remain intact.
Subsection (b) explicitly permits additional disclosures of a
passenger motor vehicle's title status or history, including
those made on the face of a title. It also permits disclosures
that a rebuilt salvage vehicle passed a safety inspection that
differed from the national criteria promulgated by the
Secretary pursuant to section 33302(b)(8). However, the
legislation preempts any participating State's definition of
any term defined in the legislation as applied to a passenger
motor vehicle. The Committee intends to permit States that
disclose major damage to passenger motor vehicles, other than
through different thresholds for the terms defined in section
33301, to continue to disclose that information, regardless of
where the information appears.
Sec. 33306. Civil and criminal penalties
Subsection (a) lists the acts which are prohibited by the
legislation. Subsection (b) sets forth the civil penalties and
clarifies that there is a separate violation for each passenger
motor vehicle involved in the violation. Subsection (c) sets
forth the criminal penalties associated with violations of this
legislation.
Sec. 33307. Actions by States
Subsection (a) permits a State to bring a civil or criminal
action against any person believed to have violated or be
violating section 33302 or 33303 when the Attorney General of
such State believes the interests of the residents of that
State have been or are being threatened. When bringing a civil
action, a State may seek either to enjoin the violations or to
enforce the civil penalties under section 33307.
Subsection (b) requires that the State serve prior or
contemporaneous written notice on the Attorney General of the
United States of any action brought under subsection (a) or
(e)(2). After notification, the Attorney General shall have the
right to intervene or appeal such action. Subsection (d)
stipulates rules for venue and service of process.
Subsections (c) and (e) clarify that nothing in the
legislation prevents the Attorney General of a State, or other
authorized official, from proceeding in State court on the
basis of an alleged violation of a civil or criminal statute of
the State. Further, nothing in the legislation prohibits a
State's attorney general or other State official from
exercising the investigative powers conferred on that official.
Section 3. Amendments to chapter 305
Subsection (a) conforms the definitions in chapter 305 to
replace the terms ``junk automobile'' and ``salvage
automobile'' with the terms ``nonrepairable vehicle'' and
``salvage vehicle''. It also adds the term ``rebuilt salvage
vehicle'' and defines all of the terms as they are defined by
section 33301.
Subsection (b) modifies the requirements of the National
Motor Vehicle Title Information System (``NMVTIS'') to conform
the changes in definitions made in subsection (a) and require
the tracking of rebuilt salvage vehicles. Subsection (c) amends
section 30503 to prohibit any State which does not comply with
uniform definitions and procedures for salvage, rebuilt
salvage, and nonrepairable vehicles under chapter 333 and any
rules promulgated thereunder from participating in the NMVTIS.
It also makes certain changes necessary to conform the section
to the new, voluntary nature of the program.
Votes in Committee
ROLLCALL VOTES IN COMMITTEE
In accordance with paragraph 7(c) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following description of the record votes during its
consideration of S. 852:
By rollcall vote of 16 yeas and 4 nays as follows, the
Committee ordered the bill reported with an amendment in the
nature of a substitute:
YEAS--16-- NAYS--4
Mr. McCain Mr. Gorton
Mr. Stevens Mr. Hollings
Mr. Burns-- Mr. Kerry\1\
Mr. Lott-- Mr. Bryan
Mrs. Hutchison-
Ms. Snowe
Mr. Ashcroft-
Mr. Frist\1\-
Mr. Abraham
Mr. Brownback
Mr. Inouye
Mr. Ford
Mr. Rockefeller\1\
Mr. Breaux
Mr. Dorgan
Mr. Wyden
\1\By proxy
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new material is printed
in italic, existing law in which no change is proposed is shown
in roman):
Title 49, United States Code
CHAPTER 305--NATIONAL AUTOMOBILE TITLE INFORMATION SYSTEM
TITLE 49. TRANSPORTATION
CHAPTER 305. NATIONAL MOTOR VEHICLE TITLE INFORMATION SYSTEM
Sec. 30501. Definitions
In this chapter--
(1) ``automobile'' has the same meaning given that
term in section 32901(a) of this title.
(2) ``certificate of title'' means a document issued
by a State showing ownership of an automobile.
(3) ``insurance carrier'' means an individual or
entity engaged in the business of underwriting
automobile insurance.
[(4) ``junk automobile'' means an automobile that--
[(A) is incapable of operating on public
streets, roads, and highways; and
[(B) has no value except as a source of parts
or scrap.]
(4) ``nonrepairable vehicle'', ``salvage vehicle'',
and ``rebuilt salvage vehicle'' shall have the same
meanings given those terms in section 33301 of this
title.
(5) ``junk yard'' means an individual or entity
engaged in the business of acquiring or owning [junk
automobiles] nonrepairable vehicles for--
(A) resale in their entirety or as spare
parts; or
(B) rebuilding, restoration, or crushing.
(6) ``operator'' means the individual or entity
authorized or designated as the operator of the
National Automobile Title Information System under
section 30502(b) of this title, or the Attorney
General, if there is no authorized or designated
individual or entity.
[(7) ``salvage automobile'' means an automobile that
is damaged by collision, fire, flood, accident,
trespass, or other event, to the extent that its fair
salvage value plus the cost of repairing the automobile
for legal operation on public streets, roads, and
highways would be more than the fair market value of
the automobile immediately before the event that caused
the damage.]
[(8)] (7) ``salvage yard'' means an individual or
entity engaged in the business of acquiring or owning
[salvage automobiles] salvage vehicles for--
(A) resale in their entirety or as spare
parts; or
(B) rebuilding, restoration, or crushing.
[(9)] (8) ``State'' means a State of the United
States or the District of Columbia.
Sec. 30502. National Motor Vehicle Title Information System
(a) Establishment or Designation.--
(1) In cooperation with the States and not later than
December 31, 1997, the Attorney General shall establish
a National Motor Vehicle Title Information System that
will provide individuals and entities referred to in
subsection (e) of this section with instant and
reliable access to information maintained by the States
related to automobile titling described in subsection
(d) of this section. However, if the Attorney General
decides that the existing information system meets the
requirements of subsections (d) and (e) of this section
and will permit the Attorney General to carry out this
chapter as early as possible, the Attorney General, in
consultation with the Secretary of Transportation, may
designate an existing information system as the
National Motor Vehicle Title Information System.
(2) In cooperation with the Secretary of
Transportation and the States, the Attorney General
shall ascertain the extent to which title and related
information to be included in the system established
under paragraph (1) of this subsection will be
adequate, timely, reliable, uniform, and capable of
assisting in efforts to prevent the introduction or
reintroduction of stolen vehicles and parts into
interstate commerce.
(b) Operation.--The Attorney General may authorize the
operation of the System established or designated under
subsection (a)(1) of this section by agreement with one or more
States, or by designating, after consulting with the States, a
third party that represents the interests of the States.
(c) User Fees.--Operation of the System established or
designated under subsection (a)(1) of this section shall be
paid for by user fees and should be self-sufficient and not be
dependent on amounts from the United States Government. The
amount of fees the operator collects and keeps under this
subsection subject to annual appropriation laws, excluding fees
the operator collects and pays to an entity providing
information to the operator, may be not more than the costs of
operating the System.
(d) Information Requirements.--The System established or
designated under subsection (a)(1) of this section shall permit
a user of the System at least to establish instantly and
reliably--
(1) the validity and status of a document purporting
to be a certificate of title;
(2) whether an automobile bearing a known vehicle
identification number is titled in a particular State;
[(3) whether an automobile known to be titled in a
particular State is or has been a junk automobile or a
salvage automobile;]
(3) whether an automobile known to be titled in a
particular State is or has been a nonrepairable
vehicle, a rebuilt salvage vehicle, or a salvage
vehicle;
(4) for an automobile known to be titled in a
particular State, the odometer mileage disclosure
required under section 32705 of this title for that
automobile on the date the certificate of title for
that automobile was issued and any later mileage
information, if noted by the State; and
[(5) whether an automobile bearing a known vehicle
identification number has been reported as a junk
automobile or a salvage automobile under section 30504
of this title.]
(5) whether an automobile bearing a known vehicle
identification number has been reported as a
nonrepairable vehicle, a rebuilt salvage vehicle, or a
salvage vehicle under section 30504 of this title.
(e) Availability of Information.--
(1) The operator shall make available--
(A) to a participating State on request of
that State, information in the System about any
automobile;
(B) to a Government, State, or local law
enforcement official on request of that
official, information in the System about a
particular automobile, junk yard, or salvage
yard;
(C) to a prospective purchaser of an
automobile on request of that purchaser,
including an auction company or entity engaged
in the business of purchasing used automobiles,
information in the System about that
automobile; and
(D) to a prospective or current insurer of
an automobile on request of that insurer,
information in the System about that
automobile.
(2) The operator may release only the information
reasonably necessary to satisfy the requirements of
paragraph (1) of this subsection. The operator may not
collect an individual's social security account number
or permit users of the System to obtain an individual's
address or social security account number.
(f) Immunity.--Any person performing any activity under this
section or sections 30503 or 30504 in good faith and with the
reasonable belief that such activity was in accordance with
this section or section 30503 or 30504, as the case may be,
shall be immune from any civil action respecting such activity
which is seeking money damages or equitable relief in any court
of the United States or a State.
[Sec. 30503. State participation
[(a) State Information.--Each State shall make titling
information maintained by that State available for use in
operating the National Motor Vehicle Title Information System
established or designated under section 30502 of this title.
[(b) Verification Checks.--Each State shall establish a
practice of performing an instant title verification check
before issuing a certificate of title to an individual or
entity claiming to have purchased an automobile from an
individual or entity in another State. The check shall consist
of--
[(1) communicating to the operator--
[(A) the vehicle identification number of the
automobile for which the certificate of title
is sought;
[(B) the name of the State that issued the
most recent certificate of title for the
automobile; and
[(C) the name of the individual or entity to
whom the certificate of title was issued; and
[(2) giving the operator an opportunity to
communicate to the participating State the results of a
search of the information.
[(c) Grants to States.--
[(1) In cooperation with the States and not later
than January 1, 1994, the Attorney General shall--
[(A) conduct a review of systems used by the
States to compile and maintain information
about the titling of automobiles; and
[(B) determine for each State the cost of
making titling information maintained by that
State available to the operator to meet the
requirements of section 30502(d) of this title.
[(2) The Attorney General may make reasonable and
necessary grants to participating States to be used in
making titling information maintained by those States
available to the operator.
[(d) Report to Congress.--Not later than October 1, 1998, the
Attorney General shall report to Congress on which States have
met the requirements of this section. If a State has not met
the requirements, the Attorney General shall describe the
impediments that have resulted in the State's failure to meet
the requirements.]
Sec. 30503. State participation
(a) State Information.--Each State receiving funds
appropriated under subsection (c) shall make titling
information maintained by that State available for use in
operating the National Motor Vehicle Title Information System
established or designated under section 30502 of this title.
(b) Verification Checks.--Each State receiving funds
appropriated under subsection (c) shall establish a practice of
performing an instant title verification check before issuing a
certificate of title to an individual or entity claiming to
have purchased an automobile from an individual or entity in
another State. The check shall consist of--
(1) communicating to the operator--
(A) the vehicle identification number of the
automobile for which the certificate of title
is sought;
(B) the name of the State that issued the
most recent certificate of title for the
automobile; and
(C) the name of the individual or entity to
whom the certificate of title was issued; and
(2) giving the operator an opportunity to communicate
to the participating State the results of a search of
the information.
(c) Grants to States.--
(1) In cooperation with the States and not later than
January 1, 1994, the Attorney General shall--
(A) conduct a review of systems used by the
States to compile and maintain information
about the titling of automobiles; and
(B) determine for each State the cost of
making titling information maintained by that
State available to the operator to meet the
requirements of section 30502(d) of this title.
(2) The Attorney General may make reasonable and
necessary grants to participating States to be used in
making titling information maintained by those States
available to the operator.
(d) Report to Congress.--Not later than October 1, 1998, the
Attorney General shall report to Congress on which States have
met the requirements of this section. If a State has not met
the requirements, the Attorney General shall describe the
impediments that have resulted in the State's failure to meet
the requirements.
Sec. 30504. Reporting requirements
(a) Junk Yard and Salvage Yard Operators.--
(1) Beginning at a time established by the Attorney
General that is not sooner than the 3d month before the
establishment or designation of the National Automobile
Title Information System under section 30502 of this
title, an individual or entity engaged in the business
of operating a junk yard or salvage yard shall file a
monthly report with the operator of the System. The
report shall contain an inventory of all [junk
automobiles or salvage automobiles] nonrepairable
vehicles, rebuilt salvage vehicles, or salvage vehicles
obtained by the junk yard or salvage yard during the
prior month. The inventory shall contain--
(A) the vehicle identification number of
each automobile obtained;
(B) the date on which the automobile was
obtained;
(C) the name of the individual or entity
from whom the automobile was obtained; and
(D) a statement of whether the automobile
was crushed or disposed of for sale or other
purposes.
(2) Paragraph (1) of this subsection does not apply
to an individual or entity--
(A) required by State law to report the
acquisition of [junk automobiles or salvage
automobiles] nonrepairable vehicles, rebuilt
salvage vehicles, or salvage vehicles to State
or local authorities if those authorities make
that information available to the operator; or
(B) issued a verification under section
33110 of this title stating that the automobile
or parts from the automobile are not reported
as stolen.
(b) Insurance Carriers.--Beginning at a time established by
the Attorney General that is not sooner than the 3d month
before the establishment or designation of the System, an
individual or entity engaged in business as an insurance
carrier shall file a monthly report with the operator. The
report may be filed directly or through a designated agent. The
report shall contain an inventory of all automobiles of the
current model year or any of the 4 prior model years that the
carrier, during the prior month, has obtained possession of and
has decided are [junk automobiles or salvage automobiles]
nonrepairable vehicles, rebuilt salvage vehicles, or salvage
vehicles. The inventory shall contain--
(1) the vehicle identification number of each
automobile obtained;
(2) the date on which the automobile was obtained;
(3) the name of the individual or entity from whom
the automobile was obtained; and
(4) the name of the owner of the automobile at the
time of the filing of the report.
(c) Procedures and Practices.--The Attorney General shall
establish by regulation procedures and practices to facilitate
reporting in the least burdensome and costly fashion.
CHAPTER 333--AUTOMOBILE SAFETY AND TITLE DISCLOSURE REQUIREMENTS
Sec.
33301. Definitions.
33302. Passenger motor vehicle titling.
33303. Disclosure and label requirements on transfer of rebuilt salvage
vehicles.
33304. Report on funding.
33305. Effect on State law.
33306. Civil and criminal penalties.
33307. Actions by States.
Sec. 33301. Definitions
(a) Definitions.--For the purposes of this chapter:
(1) Passenger motor vehicle.--The term ``passenger
motor vehicle'' shall have the same meaning given such
term by section 32101(10), except, notwithstanding
section 32101(9), it shall include a multipurpose
passenger vehicle (constructed on a truck chassis or
with special features for occasional off-road
operation), or a truck, other than a truck referred to
in section 32101(10)(B), when that vehicle or truck is
rated by the manufacturer of such vehicle or truck at
not more than 10,000 pounds gross vehicle weight, and
except further, it shall only include a vehicle
manufactured primarily for use on public streets,
roads, and highways.
(2) Salvage vehicle.--The term ``salvage vehicle''
means any passenger motor vehicle, other than a flood
vehicle or a nonrepairable vehicle, which--
(A) is a late model vehicle which has been
wrecked, destroyed, or damaged, to the extent
that the total cost of repairs to rebuild or
reconstruct the passenger motor vehicle to its
condition immediately before it was wrecked,
destroyed, or damaged, and for legal operation
on the roads or highways, exceeds 80 percent of
the retail value of the passenger motor
vehicle;
(B) is a late model vehicle which has been
wrecked, destroyed, or damaged, and to which an
insurance company acquires ownership pursuant
to a damage settlement (except in the case of a
settlement in connection with a recovered
stolen vehicle, unless such vehicle sustained
damagesufficient to meet the damage threshold
prescribed by subparagraph (A)); or
(C) the owner wishes to voluntarily designate
as a salvage vehicle by obtaining a salvage
title, without regard to the level of damage,
age, or value of such vehicle or any other
factor, except that such designation by the
owner shall not impose on the insurer of the
passenger motor vehicle or on an insurer
processing a claim made by or on behalf of the
owner of the passenger motor vehicle any
obligation or liability.
(3) Salvage title.--The term ``salvage title'' means
a passenger motor vehicle ownership document issued by
the State to the owner of a salvage vehicle. A salvage
title shall be conspicuously labeled with the word
``salvage'' across the front.
(4) Rebuilt salvage vehicle.--The term ``rebuilt
salvage vehicle'' means--
(A) any passenger motor vehicle which was
previously issued a salvage title, has passed
State anti-theft inspection, has been issued a
certificate indicating that the passenger motor
vehicle has passed the required anti-theft
inspection, has passed the State safety
inspection in those States requiring a safety
inspection pursuant to section 33302(b)(8), has
been issued a certificate indicating that the
passenger motor vehicle has passed the required
safety inspection in those States requiring
such a safety inspection pursuant to section
33302(b)(8), and has a decal stating ``Rebuilt
Salvage Vehicle--Anti-theft and Safety
Inspections Passed'' affixed to the driver's
door jamb; or
(B) any passenger motor vehicle which was
previously issued a salvage title, has passed a
State anti-theft inspection, has been issued a
certificate indicating that the passenger motor
vehicle has passed the required anti-theft
inspection, and has, affixed to the driver's
door jamb, a decal stating ``Rebuilt Salvage
Vehicle--Anti-theft Inspection Passed/No Safety
Inspection Pursuant to National Criteria'' in
those States not requiring a safety inspection
pursuant to section 33302(b)(8).
(5) Rebuilt salvage title.--The term ``rebuilt
salvage title'' means the passenger motor vehicle
ownership document issued by the State to the owner of
a rebuilt salvage vehicle. A rebuilt salvage title
shall be conspicuously labeled either with the words
``Rebuilt Salvage Vehicle--Anti-theft and Safety
Inspections Passed'' or ``Rebuilt Salvage Vehicle--
Anti-theft Inspection Passed/No Safety Inspection
Pursuant to National Criteria,'' as appropriate, across
the front.
(6) Nonrepairable vehicle.--The term ``nonrepairable
vehicle'' means any passenger motor vehicle, other than
a flood vehicle, which is incapable of safe operation
for use on roads or highways and which has no resale
value except as a source of parts or scrap only or
which the owner irreversibly designates as a source of
parts or scrap. Such passenger motor vehicle shall be
issued a nonrepairable vehicle certificate and shall
never again be titled or registered.
(7) Nonrepairable vehicle certificate.--The term
``nonrepairable vehicle certificate'' means a passenger
motor vehicle ownership document issued by the State to
the owner of a nonrepairable vehicle. A nonrepairable
vehicle certificate shall be conspicuously labeled with
the word ``Nonrepairable'' across the front.
(8) Secretary.--The term ``Secretary'' means the
Secretary of Transportation.
(9) Late model vehicle.--The term ``Late Model
Vehicle'' means any passenger motor vehicle which--
(A) has a manufacturer's model year
designation of or later than the year in which
the vehicle was wrecked, destroyed, or damaged,
or any of the six preceding years; or
(B) has a retail value of more than $7,500.
The Secretary shall adjust such retail value on an
annual basis in accordance with changes in the consumer
price index.
(10) Retail value.--The term ``retail value'' means
the actual cash value, fair market value, or retail
value of a passenger motor vehicle as--
(A) set forth in a current edition of any
nationally recognized compilation (to include
automated databases) of retail values; or
(B) determined pursuant to a market survey of
comparable vehicles with regard to condition
and equipment.
(11) Cost of repairs.--The term ``cost of repairs''
means the estimated retail cost of parts needed to
repair the vehicle or, if the vehicle has been
repaired, the actual retail cost of the parts used in
the repair, and the cost of labor computed by using the
hourly labor rate and time allocations that are
reasonable and customary in the automobile repair
industry in the community where the repairs are to be
performed.
(12) Flood vehicle.--The term ``flood vehicle'' means
any passenger motor vehicle that--
(A) has been acquired by an insurance company
as part of a damage settlement due to water
damage; or
(B) has been submerged in water to the point
that rising water has reached over the door
sill, has entered the passenger or trunk
compartment, and has exposed any electrical,
computerized, or mechanical component to water,
except--
(i) where a passenger motor vehicle
which, pursuant to an inspection
conducted by an insurance adjuster or
estimator, a motor vehicle repairer or
motor vehicle dealer in accordance with
inspection guidelines or procedures
established by the Secretary or the
State, is determined to have no
electrical, computerized or mechanical
components which were damaged by water;
or,
(ii) where a passenger motor vehicle
which, pursuant to an inspection
conducted by an insurance adjuster or
estimator, a motor vehicle repairer or
motor vehicle dealer in accordance with
inspection guidelines or procedures
established by the Secretary or the
State, is determined to have one or
more electrical, computerized or
mechanical components which were
damaged by water and where all such
damaged components have been repaired
or replaced.
Disclosure that a vehicle is a flood vehicle must be
made at the time of transfer of ownership and the brand
``Flood'' shall be conspicuously marked on all
subsequent titles for the vehicle. No inspection shall
be required unless the owner or insurer of the
passenger motor vehicle is seeking to avoid a brand of
``Flood'' pursuant to subparagraph (B). Disclosing a
passenger motor vehicle's status as a flood vehicle or
conducting an inspection pursuant to subparagraph (B)
shall not impose on any person any liability for damage
to (except in the case of damage caused by the
inspector at the time of the inspection) or reduced
value of a passenger motor vehicle.
(b) Construction.--The definitions set forth in subsection
(a) shall only apply to vehicles in a State which are wrecked,
destroyed, or otherwise damaged on or after the date on which
such State complies with the requirements of this chapter and
the rule promulgated pursuant to section 33302(b).
Sec. 33302. Passenger motor vehicle titling
(a) Carry-Forward of Information on a Newly Issued Title
Where the Previous Title for the Vehicle Was Not Issued
Pursuant to New Nationally Uniform Standards.--For any
passenger motor vehicle, the ownership of which is transferred
on or after the date that is 1 year from the date of the
enactment of this chapter, each State receiving funds, either
directly or indirectly, appropriated under section 30503(c) of
this title after the date of the enactment of this chapter, in
licensing such vehicle for use, shall disclose in writing on
the certificate of title whenever records readily accessible to
the State indicate that the passenger motor vehicle was
previously issued a title that bore any word or symbol
signifying that the vehicle was ``salvage', ``unrebuildable',
``parts only', ``scrap', ``junk', ``nonrepairable',
``reconstructed', ``rebuilt', or any other symbol or word of
like kind, or that it has been damaged by flood.
(b) Nationally Uniform Title Standards and Control Methods.--
Not later than 18 months after the date of the enactment of
this chapter, the Secretary shall by rule require each State
receiving funds, either directly or indirectly, appropriated
under section 30503(c) of this title after the date of the
enactment of this chapter, in licensing any passenger motor
vehicle where ownership of such passenger motor vehicle is
transferred more than 2 years after publication of such final
rule, to apply uniform standards, procedures, and methods for
the issuance and control of titles for motor vehicles and for
information to be contained on such titles. Such titling
standards, control procedures, methods, and information shall
include the following requirements:
(1) A State shall conspicuously indicate on the face
of the 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.
(2) Such information concerning a passenger motor
vehicle's status shall be conveyed on any subsequent
title, includinga duplicate or replacement title, for
the passenger motor vehicle issued by the original titling State or any
other State.
(3) The title documents, the certificates, and decals
required by section 33301(4), and the issuing system
shall meet security standards minimizing the
opportunities for fraud.
(4) The certificate of title shall include the
passenger motor vehicle make, model, body type, year,
odometer disclosure, and vehicle identification number.
(5) The title documents shall maintain a uniform
layout, to be established in consultation with the
States or an organization representing them.
(6) A passenger motor vehicle designated as
nonrepairable shall be issued a nonrepairable vehicle
certificate and shall not be retitled.
(7) No rebuilt salvage title shall be issued to a
salvage vehicle unless, after the salvage vehicle is
repaired or rebuilt, it complies with the requirements
for a rebuilt salvage vehicle pursuant to section
33301(4). Any State inspection program operating under
this paragraph shall be subject to continuing review by
and approval of the Secretary. Any such anti-theft
inspection program shall include the following:
(A) A requirement that the owner of any
passenger motor vehicle submitting such vehicle
for an anti-theft inspection provide a
completed document identifying the vehicle's
damage prior to being repaired, a list of
replacement parts used to repair the vehicle,
and proof of ownership of such replacement
parts, as may be evidenced by bills of sale,
invoices, or, if such documents are not
available, other proof of ownership for the
replacement parts. The owner shall also include
an affirmation that the information in the
declaration is complete and accurate and that,
to the knowledge of the declarant, no stolen
parts were used during the rebuilding.
(B) A requirement to inspect the passenger
motor vehicle or any major part or any major
replacement part required to be marked under
section 33102 for signs of such mark or vehicle
identification number being illegally altered,
defaced, or falsified. Any such passenger motor
vehicle or any such part having a mark or
vehicle identification number that has been
illegally altered, defaced, or falsified, and
that cannot be identified as having been
legally obtained (through bills of sale,
invoices, or other ownership documentation),
shall be contraband and subject to seizure. The
Secretary, in consultation with the Attorney
General, shall, as part of the rule required by
this section, establish procedures for dealing
with those parts whose mark or vehicle
identification number is normally removed
during industry accepted remanufacturing or
rebuilding practices, which parts shall be
deemed identified for purposes of this section
if they bear a conspicuous mark of a type, and
applied in such a manner, as designated by the
Secretary, indicating that they have been
rebuilt or remanufactured. With respect to any
vehicle part, the Secretary's rule, as required
by this section, shall acknowledge that a mark
or vehicle identification number on such part
may be legally removed or altered as provided
for in section 511 of title 18, United States
Code, and shall 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.
(8) Any safety inspection for a rebuilt salvage
vehicle performed pursuant to this chapter shall be
performed in accordance with nationally uniform safety
inspection criteria established by the Secretary. A
State may determine whether to conduct such safety
inspection itself, contract with one or more third
parties, or permit self-inspection by a person licensed
by such State in an automotive-related business, all
subject to criteria promulgated by the Secretary
hereunder. Any State inspection program operating under
this paragraph shall be subject to continuing review by
and approval of the Secretary. A State requiring such
safety inspection may require the payment of a fee for
the privilege of such inspection or the processing
thereof.
(9) No duplicate or replacement title shall be issued
unless the word ``duplicate'' is clearly marked on the
face thereof and unless the procedures for such
issuance are substantially consistent with
Recommendation three of the Motor Vehicle Titling,
Registration and Salvage Advisory Committee.
(10) A State shall employ the following titling and
control methods:
(A) 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 apply for a
salvage title or nonrepairable vehicle
certificate, whichever is applicable, before
the passenger motor vehicle is repaired or the
ownership of the passenger motor vehicle is
transferred, but in any event within 30 days
after the passenger motor vehicle is damaged.
(B) If an insurance company, pursuant to 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 or salvage facility or other
agent on its behalf shall apply for a salvage
title or nonrepairable vehicle certificate
within 30 days after the title is properly
assigned by the owner to the insurance company
and delivered to the insurance company or
salvage facility or other agent on its behalf
with all liens released.
(C) If an insurance company does not assume
ownership of an insured's or claimant's
passenger motor vehicle that has incurred
damage requiring the vehicle to be titled as a
salvage vehicle or nonrepairable vehicle, the
insurance company shall notify the owner of the
owner's obligation to apply for a salvage title
or nonrepairable vehicle certificate for the
passenger motor vehicle and notify the State
passenger motor vehicle titling office that a
salvage title or nonrepairable vehicle
certificate should be issued for the vehicle,
except to the extent such notification is
prohibited by State insurance law.
(D) If a leased passenger motor vehicle
incurs damage requiring the vehicle to be
titled as a salvage vehicle or nonrepairable
vehicle, the lessor shall apply for a salvage
title or nonrepairable vehicle certificate
within 21 days after being notified by the
lessee that the vehicle has been so damaged,
except when an insurance company, pursuant to a
damage settlement, acquires ownership of the
vehicle. The lessee of such vehicle shall
inform the lessor that the leased vehicle has
been so damaged within 30 days after the
occurrence of the damage.
(E) Any person acquiring 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 apply for a salvage title or
nonrepairable vehicle certificate, whichever is
applicable. This application shall be made
before the vehicle is further transferred, but
in any event, within 30 days after ownership is
acquired. The requirements of this subparagraph
shall not apply to any scrap metal processor
which acquires a passenger motor vehicle for
the sole purpose of processing it into prepared
grades of scrap and which so processes such
vehicle.
(F) State records shall note when a
nonrepairable vehicle certificate is issued. No
State shall issue a nonrepairable vehicle
certificate after 2 transfers of ownership.
(G) When a passenger motor vehicle has been
flattened, baled, or shredded, whichever comes
first, the title or nonrepairable vehicle
certificate for the vehicle shall be
surrendered to the State within 30 days. If the
second transferee on a nonrepairable vehicle
certificate is unequipped to flatten, bale, or
shred the vehicle, such transferee shall, at
the time of final disposal of the vehicle, use
the services of a professional automotive
recycler or professional scrap processor who is
hereby authorized to flatten, bale, or shred
the vehicle and to effect the surrender of the
nonrepairable vehicle certificate to the State
on behalf of such second transferee. State
records shall be updated to indicate the
destruction of such vehicle and no further
ownership transactions for the vehicle will be
permitted. If different than 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.
(H) When a salvage title is issued, the State
records shall so note. No State shall 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, which
complies with the security and guideline
standards established by the Secretary pursuant
to paragraphs (3), (7), and (8), as applicable,
indicating that the vehicle has passed the
inspections required by the State. This
subparagraph does not preclude the issuance of
a new salvage title for a salvage vehicle after
a transfer of ownership.
(I) After a passenger motor vehicle titled
with a salvage title has passed the inspections
required by the State, the inspection official
will affix the secure decal required pursuant
to section 33301(4) to the driver's door jamb
of the vehicle and issue to the owner of the
vehicle a certificate indicating that the
passenger motor vehicle has passed the
inspections required by the State. The decal
shall comply with the permanency requirements
established by the Secretary.
(J) The owner of a passenger motor vehicle
titled with a salvage title may obtain a
rebuilt salvage title or vehicle registration,
or both, 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.
With such proper documentation and upon
request, a rebuilt salvage title or
registration, or both, shall be issued to the
owner. When a rebuilt salvage title is issued,
the State records shall so note.
(11) A seller of a passenger motor vehicle that
becomes a flood vehicle shall, at or prior to the time
of transfer of ownership, give the buyer a written
notice that the vehicle has been damaged by flood,
provided such person has actual knowledge that such
vehicle has been damaged by flood. At the time of the
next title application for the vehicle, disclosure of
the flood status shall be provided to the applicable
State with the properly assigned title and the word
``Flood'' shall be conspicuously labeled across the
front of the new title.
(12) In the case of a leased passenger motor vehicle,
the lessee, within 15 days of 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.
(13) Ownership of a passenger motor vehicle may be
transferred on a salvage title, however, a passenger
motor vehicle for which a salvage title has been issued
shall not be registered for use on the roads or
highways unless it has been issued a rebuilt salvage
title.
(14) Ownership of a passenger motor vehicle may be
transferred on a rebuilt salvage title, and a passenger
motor vehicle for which a rebuilt salvage title has
been issued may be registered for use on the roads and
highways.
(15) Ownership of a passenger motor vehicle may only
be transferred 2 times on a nonrepairable vehicle
certificate. A passenger motor vehicle for which a
nonrepairable vehicle certificate has been issued can
never be titled or registered for use on roads or
highways.
(c) Consumer Notice in Noncompliant States.--Any State
receiving, either directly or indirectly, funds appropriated
under section 30503(c) of this title after the date of
enactment of this chapter and not complying with the
requirements of subsections (a) and (b) of this section, shall
conspicuously print the following notice on all titles or
ownership certificates issued for passenger motor vehicles in
such State until such time as such State is in compliance with
the requirements of subsections (a) and (b) of this section:
``NOTICE: This State does not conform to the uniform Federal
requirements ofthe National Salvage Motor Vehicle Consumer
Protection Act of 1997.'.
Sec. 33303. Disclosure and label requirements on transfer of rebuilt
salvage vehicles
(a) Written Disclosure Requirements.--
(1) General rule.--Under regulations prescribed by
the Secretary of Transportation, a person transferring
ownership of a rebuilt salvage vehicle shall give the
transferee a written disclosure that the vehicle is a
rebuilt salvage vehicle when such person has actual
knowledge of the status of such vehicle.
(2) False statement.--A person making a written
disclosure required by a regulation prescribed under
paragraph (1) of this subsection may not make a false
statement in the disclosure.
(3) Completeness.--A person acquiring a rebuilt
salvage vehicle for resale may accept a disclosure
under paragraph (1) only if it is complete.
(4) Regulations.--The regulations prescribed by the
Secretary shall provide the way in which information is
disclosed and retained under paragraph (1).
(b) Label Requirements.--
(1) In general.--The Secretary shall by regulation
require that a label be affixed to the windshield or
window of a rebuilt salvage vehicle before its first
sale at retail containing such information regarding
that vehicle as the Secretary may require. The label
shall be affixed by the individual who conducts the
applicable State antitheft inspection in a
participating State.
(2) Removal, alteration, or illegibility of required
label.--No person shall willfully remove, alter, or
render illegible any label required by paragraph (1)
affixed to a rebuilt salvage vehicle before the vehicle
is delivered to the actual custody and possession of
the first retail purchaser.
(c) Limitation.--The requirements of subsections (a) and (b)
shall only apply to a transfer of ownership of a rebuilt
salvage vehicle where such transfer occurs in a State which, at
the time of the transfer, is complying with subsections (a) and
(b) of section 33302.
Sec. 33304. Report on funding
The Secretary shall, contemporaneously with the issuance of a
final rule pursuant to section 33302(b), report to appropriate
committees of Congress whether the costs to the States of
compliance with such rule can be met by user fees for issuance
of titles, issuance of registrations, issuance of duplicate
titles, inspection of rebuilt vehicles, or for the State
services, or by earmarking any moneys collected through law
enforcement action to enforce requirements established by such
rule.
Sec. 33305. Effect on State law
(a) In General.--Unless a State is in compliance with
subsection (c) of section 33302, effective on the date the rule
promulgated pursuant to section 33302 becomes effective, the
provisions of this chapter shall preempt all State laws in
States receiving funds, either directly or indirectly,
appropriated under section 30503(c) of this title after the
date of the enactment of this chapter, to the extent they are
inconsistent with the provisions of this chapter or the rule
promulgated pursuant to section 33302, which--
(1) set forth the form of the passenger motor vehicle
title;
(2) 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), 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 passenger motor vehicle part or part
assembly separate from a passenger motor vehicle); or
(3) set forth titling, recordkeeping, anti-theft
inspection, or control procedures in connection with
any salvage vehicle, rebuilt salvage vehicle,
nonrepairable vehicle, or flood vehicle.
The requirements described in paragraph (3) shall not be
construed to affect any State consumer law actions that may be
available to residents of the State for violations of this
chapter.
(b) Construction.--Additional disclosures of a passenger
motor vehicle's title status or history, in addition to the
terms defined in section 33301, shall not be deemed
inconsistent with the provisions of this chapter. Such
disclosures shall include disclosures made on a certificate of
title. 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 of a term defined in section 33301 which is
different than the definition in that section or any use of any
term listed in subsection (a), but not defined in section
33301, shall be deemed inconsistent with the provisions of this
chapter. 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 which differed
from the nationally uniform criteria to be promulgated pursuant
to section 33302(b)(8).
Sec. 33306. 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 or any disclosure made pursuant
to section 33303;
(2) fail to apply for a salvage title when such an
application is required;
(3) alter, forge, or counterfeit a certificate of
title (or an assignment thereof), a nonrepairable
vehicle certificate, a certificate verifying an anti-
theft inspection or an anti-theft and safety
inspection, a decal affixed to a passenger motor
vehicle pursuant to section 33302(b)(10)(I), or any
disclosure made pursuant to section 33303;
(4) falsify the results of, or provide false
information in the course of, an inspection conducted
pursuant to section 33302(b)(7) or (8);
(5) offer to sell any salvage vehicle or
nonrepairable vehicle as a rebuilt salvage vehicle;
(6) fail to make any disclosure required by section
33303, except when the person lacks actual knowledge of
the status of the rebuilt salvage vehicle;
(7) violate a regulation prescribed under this
chapter; or
(8) conspire to commit any of the acts enumerated in
paragraph (1), (2), (3), (4), (5), (6), or (7).
(b) Civil Penalty.--Any person who commits an unlawful act as
provided in subsection (a) of this section shall be fined a
civil penalty of up to $2,000 per offense. A separate violation
occurs for each passenger motor vehicle involved in the
violation.
(c) Criminal Penalty.--Any person who commits an unlawful act
as provided in subsection (a) of this section shall be fined up
to $50,000 or sentenced to up to 3 years imprisonment or both,
per offense.
Sec. 33307. Actions by States
(a) In General.--Whenever an attorney general of any State
has reason to believe that the interests of the residents of
that State have been or are being threatened or adversely
affected because any person has violated or is violating
section 33302 or 33303, the State, as parens patriae, may bring
a civil action on behalf of its residents in an appropriate
district court of the United States or the appropriate State
court to enjoin such violation or to enforce the civil
penalties under section 33306 or enforce the criminal penalties
under section 33306.
(b) Notice.--The State shall serve prior written notice of
any civil or criminal action under subsection (a) or (e)(2)
upon the Attorney General and provide the Attorney General with
a copy of its complaint, except that if it is not feasible for
the State to provide such prior notice, the State shall serve
such notice immediately upon instituting such action. Upon
receiving a notice respecting a civil or criminal action, the
Attorney General shall have the right--
(1) to intervene in such action;
(2) upon so intervening, to be heard on all matters
arising therein; and
(3) to file petitions for appeal.
(c) Construction.--For purposes of bringing any civil or
criminal action under subsection (a), nothing in this Act shall
prevent an attorney general from exercising the powers
conferred on the attorney general by the laws of such State to
conduct investigations or to administeroaths or affirmations or
to compel the attendance of witnesses or the production of documentary
and other evidence.
(d) Venue; Service of Process.--Any civil or criminal action
brought under subsection (a) in a district court of the United
States may be brought in the district in which the defendant is
found, is an inhabitant, or transacts business or wherever
venue is proper under section 1391 of title 28, United States
Code. Process in such an action may be served in any district
in which the defendant is an inhabitant or in which the
defendant may be found.
(e) Actions by State Officials.--
(1) Nothing contained in this section shall prohibit
an attorney general of a State or other authorized
State official from proceeding in State court on the
basis of an alleged violation of any civil or criminal
statute of such State.
(2) In addition to actions brought by an attorney
general of a State under subsection (a), such an action
may be brought by officers of such State who are
authorized by the State to bring actions in such State
on behalf of its residents.