[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.

                                 
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