Anti-Car Theft Act: Implementation Status of Certain Provisions of the
1992 Act (Letter Report, 04/22/96, GAO/GGD-96-77).
Pursuant to a congressional request, GAO provided information on the
implementation of the Anti-Car Theft Act, focusing on the: (1) status of
national information systems on motor vehicle titles and stolen
passenger cars and parts; (2) marking of major component parts of
passenger cars with identification numbers; and (3) issues that may
impede the act's implementation.
GAO found that: (1) the Department of Justice (DOJ) and the Department
of Transportation (DOT) have begun developing information systems and
DOT has issued initial parts-marking regulations; (2) a DOT task force
has made recommendations on the legislative and administrative actions
needed to address problems in titling, registration, and controls over
salvage to deter motor vehicle theft; (3) states need about $19 million
in federal grants to implement their part of the titling system; (4) the
National Highway Traffic Safety Administration has proposed legislation
to implement the task force's recommendations; (5) issues affecting the
implementation or effectiveness of the proposed titling information
system include prosecution immunity, major vehicle damage disclosure,
the system's complexity, and state participation, funding, and
responsibility; (6) the association that DOJ authorized to set up the
stolen vehicle and parts database and complete a pilot study on the
database's concept and maintenance feasibility expects to begin studying
parts-marking effectiveness in May 1996; and (7) potential barriers to
the implementation or effectiveness of the act's parts marking
provisions include state funding for the database, confusion over what
vehicles and parts are to be marked, whether local law enforcement
agencies have the resources necessary to follow up on identified stolen
vehicles and parts, and the potential adverse economic impact on
insurance companies and small businesses.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-96-77
TITLE: Anti-Car Theft Act: Implementation Status of Certain
Provisions of the 1992 Act
DATE: 04/22/96
SUBJECT: Crimes or offenses
Larceny
Motor vehicles
Intergovernmental relations
Computerized information systems
Data bases
Grants to states
Crime prevention
Proposed legislation
Systems design
IDENTIFIER: National Motor Vehicle Title Information System
National Stolen Passenger Motor Vehicle Information System
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Cover
================================================================ COVER
Report to the Ranking Minority Member, Subcommittee on Crime,
Committee on the Judiciary, House of Representatives
April 1996
ANTI-CAR THEFT ACT -
IMPLEMENTATION STATUS OF CERTAIN
PROVISIONS OF THE 1992 ACT
GAO/GGD-96-77
Anti-Car Theft Act
(182020)
Abbreviations
=============================================================== ABBREV
AAMVA - American Association of Motor Vehicle Administrators
FACTA - Federal Anti-Car Theft Act
FBI - Federal Bureau of Investigation
NCIC - National Crime Information Center
NHTSA - National Highway Traffic Safety Administration
NICB - National Insurance Crime Bureau
NSAPIS - National Stolen Auto Part Information System
NSPMVIS - National Stolen Passenger Motor Vehicle Information
System
Letter
=============================================================== LETTER
B-270714
April 22, 1996
The Honorable Charles E. Schumer
Ranking Minority Member
Subcommittee on Crime
Committee on the Judiciary
House of Representatives
Dear Mr. Schumer:
Congress passed the Anti-Car Theft Act of 1992 in response to what it
considered to be the nation's number one property crime--automobile
theft.\1 The 1992 Act was designed to reduce automobile theft by
making the selling of stolen cars and parts more difficult. This
report responds to your November 29, 1995, request that we provide
information on the following parts of the 1992 Act: (1) the national
information system on motor vehicle titles, (2) the marking of major
component parts of passenger motor vehicles with an identification
number, and (3) the national information system on stolen passenger
motor vehicles and parts. We also discuss the status of
implementation and issues that may impede the implementation or
influence the effectiveness of these parts of the 1992 Act.
--------------------
\1 P.L. 102-519, Oct. 25, 1992, 49 U.S.C. Chapters 305, 311.
BACKGROUND
------------------------------------------------------------ Letter :1
According to 1992 congressional testimony, thieves turn stolen cars
into money in three ways. The most common way is for a thief to take
a car to a "chop shop," where the car is dismantled and its parts are
sold as replacement parts for other vehicles. The second way is for
a thief to obtain an apparently valid title for the car and then sell
it to a third party. Finally, the third way is for a thief to export
the vehicles for sale abroad.
The 1992 Act contains several approaches for dealing with these
criminal activities. Title I directed the establishment of, among
other things, a task force to study problems that may affect motor
vehicle theft and created a new federal crime for armed car jacking.
The task force was to be made up of representatives of related
federal and state agencies and associations.
Title II called for establishment of the National Motor Vehicle Title
Information System to enable state departments of motor vehicles to
check the validity of out-of-state titles before issuing new titles.
Title II authorized grants up to 25 percent of a state's start-up
costs, with a limit of $300,000 per state.
Title III expanded the parts marking program established in the Theft
Act of 1984.\2 The program was intended to reduce the selling of
stolen parts. Major component parts of designated passenger motor
vehicles are to be marked with identification numbers so that stolen
parts can be identified. Title III also required the Attorney
General to develop and maintain a national information system, known
as the National Stolen Passenger Motor Vehicle Information System
(NSPMVIS),\3 that is to contain the identification numbers of stolen
passenger motor vehicles and stolen passenger motor vehicle component
parts. This system is to be maintained within the Federal Bureau of
Investigation's (FBI) National Crime Information Center (NCIC),
unless the Attorney General determines that it should be operated
separately.\4
The 1992 Act also required that the Departments of Justice and
Transportation prepare studies on various sections of the 1992 Act.
--------------------
\2 The Theft Act is the Motor Vehicle Theft Law Enforcement Act of
1984 (P.L. 98-547, Oct. 25, 1984).
\3 The original statute created a National Stolen Auto Parts
Information System, which was changed by subsequent legislation to
NSPMVIS.
\4 NCIC is a computerized criminal justice information system in
which federal and state law enforcement agencies maintain and share
millions of records in 14 files, including files on fugitives,
missing persons, and stolen vehicles.
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :2
To determine the implementation status of the marking and information
systems parts of the 1992 Act, we reviewed the 1992 Act, including
its legislative history, and the Theft Act of 1984. We also
interviewed officials and reviewed documentation from the Departments
of Justice and Transportation, the federal agencies responsible for
implementing the 1992 Act's marking and information systems
provisions. Specifically, we obtained information from Justice's
FBI, National Institute of Justice, Criminal Division, and Office of
Legislative Affairs and from Transportation's National Highway
Traffic Safety Administration (NHTSA). We also interviewed officials
from the American Association of Motor Vehicle Administrators (AAMVA)
and the National Insurance Crime Bureau (NICB), which are involved in
developing information systems called for in the 1992 Act's
provisions.\5
To identify any issues that may impede the implementation or
influence the effectiveness of the marking and information systems
parts of the 1992 Act, we developed a list of possible issues
affecting the implementation or effectiveness of these parts of the
act by reviewing documents and interviewing the same officials from
these agencies. We then discussed this list with the officials and
revised it on the basis of their comments. We did not determine the
validity of these issues or verify the data provided to us.
We performed our work in Washington, D.C., from November 1995 to
February 1996 in accordance with generally accepted government
auditing standards. On February 27, 1996, we requested comments on a
draft of this report from the Attorney General, the Secretary of
Transportation, the NICB Project Manger, and the AAMVA Director of
Vehicle Services. We discussed this report, separately, with
representatives of these organizations, including NHTSA's Highway
Safety Specialist; AAMVA Director of Vehicle Services; Executive
Director of NICB-FACTA, Inc.;\6 and the Director, Justice's Audit
Liaison Office; on March 7, 11, and 14, 1996, respectively.\7 They
generally agreed with the factual information in the report. Their
comments have been incorporated where appropriate.
--------------------
\5 AAMVA is a voluntary, nonprofit, tax exempt, educational
association representing U.S. and Canadian officials who are
responsible for the administration and enforcement of motor vehicle
use and laws. NICB is a private, nonprofit organization that
provides investigative resources and information to its membership of
about 1,000 property and casualty insurance companies.
\6 FACTA means Federal Anti-Car Theft Act.
\7 We discussed the report with NHTSA and AAMVA on March 7, 1996.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :3
Justice and Transportation have implemented some of the 1992 Act's
requirements regarding the vehicle title information system, parts
marking, and the stolen vehicle information system. For example, the
task force representing the affected industries was established and
provided the agencies with recommendations for addressing problems in
the titling area. NHTSA drafted legislation to implement the task
force recommendations, which is under review by Transportation.
Also, Transportation issued the parts marking regulations for the
first of two marking phases. Justice completed a pilot study to
examine the concept and feasibility of maintaining a stolen vehicle
parts database. Also, Justice expects to begin work on its study on
the effectiveness of parts marking in reducing stolen vehicles and
parts thefts in May 1996.
However, following are several issues that may impede the
implementation or influence the effectiveness of the marking and
information systems parts of the 1992 Act:
-- The issue of whether states can implement uniform vehicle
titling systems has yet to be resolved. According to NHTSA,
uniform definitions and motor vehicle titling procedures need to
be addressed by all states before a national titling system
could function effectively. AAMVA officials said that a titling
system can be 85 to 90 percent effective without the existence
of uniform definitions and motor vehicle titling procedures.
NICB officials also stated that a titling system could be
successfully implemented without uniform definitions. Also,
according to AAMVA and NHTSA, the lack of funding to assist
states with the titling information system requirements would be
an impediment to full implementation. For example, some states
would have to modify their existing titling systems.
-- According to FBI and NHTSA officials, marking effectiveness
could be adversely affected by confusion that exists within the
law enforcement community regarding those vehicles whose parts
are to be marked. This confusion could occur when law
enforcement officials investigate stolen vehicles and parts.
For example, NHTSA officials said that some prosecutors were not
aware of marking provisions. The NHTSA official said that NHTSA
will provide guidance when requested by law enforcement
officials identifying which vehicles and/or vehicle part(s) are
required to be marked.
-- According to FBI officials, the NSPMVIS will not be an effective
enforcement tool to combat vehicle thefts unless local law
enforcement agencies have resources available to respond and
follow up on identified stolen vehicles and parts.
NATIONAL MOTOR VEHICLE TITLE
INFORMATION SYSTEM
------------------------------------------------------------ Letter :4
The 1992 Act required Transportation to, among other things
-- establish a task force by April 25, 1993, to study problems
related to motor vehicle titling, registration, and salvage,
which may affect motor vehicle theft, and to recommend (1) ways
to solve these problems, including obtaining any national
uniformity that it determines is necessary in these areas and
related resources and (2) other needed legislative or
administrative actions;
-- review by January 1, 1994, state systems for motor vehicle
titling and determine each state's costs for providing a titling
information system; and
-- establish the title information system by January 31, 1996,
unless Transportation determines that an existing system meets
the statute's requirement, and by January 1, 1997, report to
Congress on those states that elected to participate in the
information system and on those states not participating,
including the reasons for nonparticipation.\8
The title information system is intended to enable states and other
users (e.g., law enforcement officials) to instantly and reliably
determine, among other things, (1) the validity of title documents,
(2) whether an automobile bearing a known identification number is
titled in a particular state, and (3) whether an automobile titled in
a particular state is, or has been, junked or salvaged.
--------------------
\8 The 1992 Act also authorized Transportation to award grants to
participating states to be used in making state titling information
available to a national title information system.
IMPLEMENTATION STATUS OF THE
1992 ACT'S REQUIREMENTS
---------------------------------------------------------- Letter :4.1
The task force, established in April 1993, reported in February 1994
its recommendations on the legislative and administrative actions
needed to address problems in the areas of titling, registration, and
controls over salvage to deter motor vehicle theft. The task force
recommended, among other things, (1) the passage of federal
legislation that would require uniform definitions for terms such as
salvage vehicles and uniform methods for titling vehicles, (2)
possible funding sources to pay for and maintain the titling system,
and (3) penalties to enforce compliance by the participating states.
The recommendations are detailed in appendix I. According to the
task force chairman, the recommendations would have to be implemented
to achieve the uniformity needed to ensure that the titling system
would operate as envisioned. In October 1994, Transportation
accepted most of the task force's recommendations (see app. I
regarding Transportation's views on the task force recommendations).
NHTSA contracted with AAMVA to identify the states' costs for a
titling system. AAMVA surveyed the 50 states and the District of
Columbia to obtain their estimated costs for implementing the titling
system. On January 31, 1994, NHTSA's survey report stated that for
the 37 states that provided cost estimates, the cost ranged from zero
(1 state) to $12.2 million.\9 For example, some states would have to
modify their existing titling systems. In March 1996, AAMVA
officials estimated that about $19 million in federal grants would be
needed to fund states' implementation costs. NHTSA officials said
that since 13 states and the District of Columbia did not provide a
cost estimate, they did not believe that the total costs to the
states could be accurately determined.\10 AAMVA pointed out that
about 80 percent of the nation's motor vehicle population is in the
states that responded to the survey.
In May 1994, Transportation sent proposed legislation to Congress to
allow the Secretary of Transportation to extend the target date (from
January 1996 to October 1997) for implementation of the national
title information system. According to NHTSA officials, the proposed
legislation was not introduced in Congress. Transportation requested
the authority to extend the implementation date for the titling
system because it understood that AAMVA was planning a pilot study of
a titling information system, using only state and private sector
funds and resources, and Transportation wanted to evaluate the study
results. Subsequently, AAMVA requested funding from NHTSA for the
pilot. In December 1994, NHTSA denied AAMVA's request for funds to
conduct a pilot study because, in NHTSA's view, such a study would
have been premature without first having uniformity in state titling
laws and regulations. However, Congress provided $890,000 for a
pilot study by NHTSA as part of Transportation's fiscal year 1996
appropriation.\11 NHTSA officials said that AAMVA would have
responsibility for the pilot.
According to AAMVA officials, as of January 1996, they were in the
process of acquiring contractors to conduct the pilot, using AAMVA's
commercial driver's license information system as the pilot's
model.\12 According to NHTSA, the pilot should assist in determining
the feasibility of a national titling system and identifying any
needed uniform titling requirements for an efficient and
cost-effective system. In addition, NHTSA expects the pilot to
assist in determining the estimated costs for full implementation,
the time frame to implement a nationwide system, the current status
of titling information exchange between states, and possible
barriers, in particular the absence of uniform system definitions,
that could impede the states from participating in a national system.
NHTSA said that the pilot study may not be able to identify all costs
associated with a national titling system. It also said the
complexity of implementing a titling system on a nationwide basis may
call for additional resources above those identified in the pilot.
NHTSA prepared legislation in response to the task force's
recommendations. Its Office of Safety Assurance submitted a
legislative proposal to NHTSA's Office of Chief Counsel in October
1994. The NHTSA Administrator approved the draft legislation for
review by Transportation in May 1995. According to NHTSA, the draft
legislative package contains two bills. One bill would provide (1)
uniform definitions for categories of severely damaged passenger cars
and their titles and (2) titling requirements for rebuilt salvage
passenger vehicles. The other bill would remove the January 1996
implementation date and instead make the system contingent upon
uniformity in state laws regarding the titling and control of
severely damaged passenger vehicles. As of February 1, 1996, the
bills were being reviewed by Transportation officials.
Legislation (H.R. 2803, Anti-Car Theft Improvements Act of 1995),
introduced in December 1995 by the Chairman and the Ranking Minority
Member of the House Judiciary Subcommittee on Crime and others would,
among other things, (1) transfer Transportation's responsibilities
for the titling area to Justice, (2) extend the implementation date
of the titling system from January 31, 1996, to October 1, 1997, and
(3) provide immunity for those participants (e.g., system operators,
insurers, and salvagers) who make good faith efforts to comply with
the 1992 Act's titling requirements.
--------------------
\9 In addition, one other state responded but did not provide a cost
estimate.
\10 NHTSA also pointed out that according to the survey, only 17
states indicated that they could participate in the titling system by
January 1996.
\11 Department of Transportation and Related Agencies Appropriations
Act, 1996, P.L. 104-50; and Conference Report H.R. Rep. 104-286,
104th Cong., 1st Sess. at 53 (1995).
\12 This is a nationwide system operated by a subsidiary of AAMVA for
the purpose of exchanging information on commercial drivers. Under
the system, a state, for example, can determine if an applicant for a
commercial driver's license had a similar license revoked in another
state.
POTENTIAL ISSUES AFFECTING
THE 1992 ACT'S
IMPLEMENTATION OR
EFFECTIVENESS
---------------------------------------------------------- Letter :4.2
On the basis of discussions with NHTSA and AAMVA officials, issues
that may affect the 1992 Act's implementation or effectiveness are
concerns about the size and scope of the pilot study, uniformity,
funding for the states, responsibility for the titling system, and
other factors, including states' willingness to participate and the
complexity of the titling system.
NHTSA officials said that the pilot study needs to develop
information on the ability to establish a national system and operate
the system. For example, NHTSA and AAMVA officials told us that the
congressionally authorized pilot may demonstrate whether the titling
system can be implemented without the uniformity recommended by the
task force. However, NHTSA officials noted that the size and scope
of the pilot study could limit the amount of information the pilot
will be able to provide. The size and scope are to be determined by
the number of participating states and system operators. Therefore,
the study may not enable NHTSA to identify or resolve all barriers or
problems that would arise in creating and operating a national
system. NHTSA said that it will have to ensure to the best of its
ability that the lessons learned will enable it to develop a national
system that meets the 1992 Act's requirements. NHTSA and AAMVA
officials also stated that the pilot study could provide more
information on other possible impediments to full implementation of
the national title information system.
According to NHTSA officials, the task force recommendations have not
been implemented. NHTSA officials said that a national titling
system should not be implemented until uniformity existed among the
states. NHTSA added that the titling system would be inherently
defective without uniformity in titling definitions and titling
control procedures. Also, according to NHTSA, uniform definitions
and motor vehicle titling procedures need to be addressed by all
states before a national titling system could function effectively.
AAMVA and NICB, however, said that uniformity among the states is not
necessary to implement the titling system. AAMVA officials said that
a titling system can be 85 to 90 percent effective without the
existence of uniform definitions and motor vehicle titling
procedures. AAMVA also said that the existence of a titling system
would cause states to implement uniform definitions and motor vehicle
titling procedures. AAMVA officials added that they have experience
dealing with systems containing nonuniform data, including the
commercial driver's license information system upon which the pilot
is to be based.
NHTSA and AAMVA officials identified lack of federal and state
funding as an impediment to full implementation of the titling
information system. The 1992 Act placed a $300,000 limit on federal
funds that could be granted to each state for start-up costs for the
new titling system. H.R. 2803 would eliminate this limit and allow
the Attorney General to make "necessary and reasonable" grants to the
states that implement the system. However, according to NHTSA
officials, no funds had been provided by the federal government to
the states for implementing the titling system. NHTSA added that
federal resources for system development, start up, and ongoing
operations are harder to find each year.
NHTSA officials told us that they are proceeding with the 1992 Act's
implementation, even though the responsibility for the titling area
may be transferred to Justice. However, they pointed out that the
question of responsibility for the 1992 Act could be an emerging
issue regarding its implementation. As of January 1996, neither
Transportation nor Justice had adopted an official position on the
transfer of responsibilities.
Other issues that may affect the 1992 Act's implementation or
effectiveness are as follows:
-- Prosecution Immunity: NHTSA said concern outside Transportation
has been raised about providing immunity to those individuals
(e.g., system operators, insurers, and salvagers) acting in good
faith to comply with the 1992 Act. H.R. 2803 could grant such
immunity. AAMVA emphasized that the immunity language was
intended for system operators, not participants such as
salvagers. AAMVA told us that the need for immunity would not
be an issue unless it affected a state's decision to participate
in the system. NICB officials stated that immunity is needed
for all participants who will participate in any activities
related to the database.
-- Major Vehicle Damage Disclosure: Consumer groups may not
support implementation of the titling system if the system,
besides disclosing whether a vehicle had been previously junked
or salvaged, does not identify vehicles that have sustained
major damage. NHTSA said that the titling task force did not
address this issue other than to note further study was needed.
-- States' Participation: Presently, the 1992 Act does not mandate
the participation of the states. In NHTSA's view, all states
need to participate in the system to ensure the 1992 Act's
effectiveness in preventing title fraud. NHTSA noted that the
uniformity needs of the system would require many states to
enact legislation at a time when they have strongly opposed
federal "mandates" and "burdens." AAMVA officials said that it
does not believe that states will need to pass new legislation
to implement a titling system.
-- Technological Challenges: According to NHTSA officials, the
system envisioned by the 1992 Act would be extraordinarily
complex. They said that the technology required to implement a
large-scale system, which provides instantaneous response to
inquiries, may take additional time or call for additional
resources beyond those currently estimated. AAMVA officials
said they recognize the complexity of the system but said that,
by modeling the pilot after the commercial driver's license
information system, many potential concerns would be lessened.
They said that the pilot will identify the necessary
requirements, technology, and costs to process the anticipated
larger volume of transactions of the national titling system in
a timely manner. NICB officials pointed out that proven
technology exists to develop and implement the system.
Therefore, the challenge is not technical but is procedural and
philosophical--i.e., states will need to establish policies and
procedures to act on identified problems and correct them.
MARKING MAJOR COMPONENT PARTS
OF PASSENGER MOTOR VEHICLES
------------------------------------------------------------ Letter :5
The Theft Act of 1984 identified the parts subject to marking and
allowed NHTSA to identify others that were to be marked. NHTSA
issued regulations on marking major original and replacement
component parts of high-theft lines of passenger motor vehicles.
NHTSA could exempt some lines from marking if the vehicles included
antitheft devices that NHTSA determined were likely to be as
effective as marking in deterring thefts.
The 1992 Act broadened and extended the 1984 Act's marking
provisions. Specifically, the 1992 Act broadened the definition of
the types of passenger motor vehicles to be marked to include any
multipurpose vehicle and light duty trucks rated at 6,000 pounds
(gross vehicle weight) or less. It extended the marking requirement
to designated vehicles, except for light duty trucks, regardless of
their theft rate. However, the trucks could be subject to marking if
the major parts were interchangeable with high-theft passenger
vehicles. No limit was placed on the number of parts that NHTSA
could require to be marked,\13 except that the marking costs are not
to exceed $15 per vehicle (in 1984 dollars). According to an NHTSA
official, local law enforcement officials look for markings when
investigating stolen vehicles and parts.
The additional marking of passenger vehicles was to be done in two
phases. By October 25, 1994, NHTSA was to issue regulations
governing the marking for half of these additional passenger motor
vehicles (excluding the light duty trucks), and by October 25, 1997,
for the remaining additional vehicles. These regulations were to be
issued provided the Attorney General did not determine that further
marking would not be effective (i.e., would not substantially inhibit
chop shop operations and motor vehicle thefts). Justice's National
Institute of Justice will be responsible for conducting the required
study upon which the Attorney General will make the determination
concerning effectiveness. Like the earlier legislation, the 1992 Act
also permitted exemptions from marking.
The 1992 Act required a number of additional evaluations. NHTSA was
required to report on theft rate-related issues and marking
effectiveness by October 25, 1995, and October 25, 1997,
respectively. (The 1984 Act contained similar reporting requirements
for Transportation.) Furthermore, the Attorney General is to report
by December 31, 1999, on the long-range effectiveness of parts
marking and on the effectiveness of the antitheft devices permitted
as alternatives to marking.
--------------------
\13 Major component parts to be marked for high-theft lines included
engines, transmissions, hoods, doors, and bumpers.
IMPLEMENTATION STATUS OF THE
1992 ACT'S REQUIREMENTS
---------------------------------------------------------- Letter :5.1
NHTSA issued the regulations for the first phase on December 13,
1994. With respect to the study that was due on October 25, 1995,
NHTSA was preparing its report for public comment as of January 1996.
According to an NHTSA official responsible for the marking
requirements, the results will not be made public until about May or
June 1996. According to the National Institute of Justice, it was to
receive grant proposals to carry out its study on March 29, 1996.
The Institute expects work to begin on this study in May 1996.
POTENTIAL ISSUES AFFECTING
THE 1992 ACT'S EFFECTIVENESS
---------------------------------------------------------- Letter :5.2
A determination of the effectiveness of the marking of major
components of passenger motor vehicles is not expected to be made
until the Justice and Transportation reports are completed. However,
on the basis of a study done in response to the 1984 Act's reporting
requirements, NHTSA reported that it was unable to statistically
prove that marking reduced motor vehicle thefts. NHTSA noted,
however, that there was wide support for parts marking in the law
enforcement community.
Further, according to NHTSA and FBI officials, marking effectiveness
could be adversely affected by confusion that exists within the law
enforcement community regarding those vehicles whose parts are to be
marked. This confusion could occur when law enforcement officials
investigate stolen vehicles and parts, for example, at chop shops.
The NHTSA official said that during discussions with some federal
prosecutors, the prosecutors were not aware of the marking
provisions. The official said that NHTSA will provide guidance when
requested by law enforcement officials.
NHTSA and FBI officials also noted that some of the markings for
certain major component parts were able to be removed from the parts,
thus preventing checking the part against NSPMVIS. The NHTSA marking
official told us that the manufacturer of the involved marking
stickers had agreed to fix the problem.
NATIONAL STOLEN PASSENGER MOTOR
VEHICLE INFORMATION SYSTEM
------------------------------------------------------------ Letter :6
The 1992 Act required that by July 25, 1993, the Attorney General
establish and maintain in NCIC an information system that was to
contain vehicle identification numbers and other related data for
stolen passenger motor vehicles and parts.\14 If the Attorney General
determined that NCIC was not able to perform the required functions,
then the 1992 Act permitted the Attorney General to enter into an
agreement for the operation of the system separate from NCIC.
The Attorney General is to prescribe procedures for the NSPMVIS
verification system under which persons/entities intending to
transfer vehicles or parts would check the system to determine if the
vehicle or part had been reported as stolen. These persons/entities
include insurance carriers when transferring titles to junk or
salvage vehicles and motor vehicle salvagers, dismantlers, recyclers,
or repairers when selling, transferring, or installing a major part
marked with an identification number.\15 The 1992 Act also required
the Attorney General to establish an advisory committee by December
24, 1992, which was to issue a report by April 25, 1993, with
recommendations on developing and carrying out NSPMVIS. The
effectiveness of this system may also be addressed in the NHTSA
studies that are to be completed on parts marking by October 25,
1995, and October 25, 1997, respectively.
--------------------
\14 Data on stolen motor vehicles and stolen vehicle parts are to be
provided by law enforcement officials when thefts are reported to
them by the victims.
\15 These organizations do not have to check identification numbers
against NSPMVIS if the parts were purchased directly from the
manufacturer or were obtained from insurance carriers who had already
checked NSPMVIS.
IMPLEMENTATION STATUS OF THE
1992 ACT'S REQUIREMENTS
---------------------------------------------------------- Letter :6.1
The Attorney General authorized NICB to operate NSPMVIS on January
18, 1995. The FBI said that the authorization was the result of the
Attorney General's approval of the final report and recommendations
of the NSPMVIS Federal Advisory Committee. (The advisory committee
recommendations are detailed in app. II.) According to FBI
officials, all of the advisory committee's recommendations, including
system administration activities, system security, theft status
determination, and visual sight checks were addressed during the
pilot study, as described below. However, according to the FBI,
several of the recommendations cannot be implemented until
regulations are developed to implement the system nationwide.
According to the FBI, NICB received approval from the NCIC Advisory
Policy Board\16 in June 1993 to receive a copy of the NCIC vehicle
file to establish the system. According to the FBI, the resulting
system became operational in June 1994, providing the NICB with the
capability to process vehicle identification numbers against the NCIC
vehicle records.\17
In March 1995, Justice established a 6-month pilot study in Texas to
examine the concept and feasibility of implementing NSPMVIS
nationwide. In July 1995, the pilot was extended another 6 months
and included another state, Illinois. According to the FBI, the
pilot study was completed in December 1995. As of April 1, 1996, the
FBI said that its report is to be issued by mid-to-late April 1996.
FBI officials said that the pilot showed that the system is feasible
but many issues, such as funding, will have to be addressed. FBI
also said it will not proceed with implementing the system until
further direction is provided by Congress.
--------------------
\16 The NCIC Advisory Policy Board, composed of representatives from
criminal justice agencies throughout the United States, is
responsible for establishing and implementing the NCIC system's
operational policies.
\17 NICB does not have any record entry capability and does not
receive felony vehicle records.
POTENTIAL ISSUES AFFECTING
THE 1992 ACT'S
IMPLEMENTATION OR
EFFECTIVENESS
---------------------------------------------------------- Letter :6.2
On the basis of discussions with FBI officials and review of the
advisory committee report and FBI-provided information, a number of
issues were identified regarding NSPMVIS. According to the FBI,
these issues are related to the system's feasibility and
effectiveness and will be addressed in its pilot study report. The
FBI added that the response by law enforcement to NSPMVIS thefts is a
state and local issue. It is impossible to predict the level of
response from law enforcement to NSPMVIS thefts because the response
is likely to vary on a case-by-case basis. However, there is no
provision in the 1992 Act to fund NSPMVIS, including parts
inspections, salvage vehicle inspections, or law enforcement
participation and assistance. NICB officials stated that local law
enforcement officials would need more resources to report stolen
parts and follow up on possible thefts identified through NSPMVIS.
Also, according to FBI officials, the implementation of NSPMVIS might
have an adverse economic impact on insurance companies and smaller
businesses involved in vehicle parts. For example, insurance
carriers would have to identify the vehicle identification number of
each vehicle part that is disposed. The FBI added that the insurance
industry is concerned about the cost of inspecting parts. The
insurance industry cooperated with the FBI throughout the pilot study
and conducted parts inspections. owever, the FBI stated that
industry officials have said that it may be too time-consuming and
costly for insurance adjustors to inspect vehicle identification
numbers on all total-loss, high-theft vehicles. According to FBI
officials, the parts inspections are a major concern to all of the
affected industries because of the potential costs associated with
the process.
NICB officials stated that the pilot study should not be the basis
for assuming that the entire insurance industry would not support a
parts identification process.
According to FBI and NICB officials, there is a need to provide
immunity from prosecution to participants acting in good faith to
comply with the NSPMVIS requirements. H.R. 2803 would grant such
immunity.
---------------------------------------------------------- Letter :6.3
As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from its date. At that time, we will send copies to the Departments
of Justice and Transportation, AAMVA, and NICB and make copies
available to others upon request.
The major contributors to this report are listed in appendix III. If
you need additional information, please contact me on (202) 512-8777.
Sincerly yours,
Norman J. Rabkin
Director, Administration
of Justice Issues
RECOMMENDATIONS OF THE MOTOR
VEHICLE TITLING, REGISTRATION, AND
SALVAGE TASK FORCE
=========================================================== Appendix I
The following information is based on the Final Report of the Motor
Vehicle Titling, Registration, and Salvage Task Force, dated February
10, 1994.
(1) Uniform Definitions: The task force recommended the enactment of
federal legislation to require the following definitions be used
nationwide to describe seriously damaged vehicles and to require all
states to use these definitions.
Salvage Vehicle: Any vehicle that has been wrecked, destroyed, or
damaged to the extent total estimated or actual cost to rebuild
exceeds 75 percent of the vehicle retail value as set forth in a
nationally recognized compilation of retail values approved by
Transportation.
Salvage Title: Issued by the state to the owner of a salvage
vehicle. The title document will be conspicuously labeled with the
word "salvage" across its front.
Rebuilt Salvage Title: Issued by the state to the owner of a vehicle
that was previously issued a salvage title. The vehicle has passed
antitheft and safety inspections by the state. The title document
will be conspicuously labeled with the words "rebuilt salvage -
inspections passed" across its front.
Nonrepairable Vehicle: A vehicle incapable of safe operation and has
no resale value other than as source for parts or scrap only. Such
vehicle will be issued a nonrepairable vehicle certificate and shall
never be titled or registered.
Nonrepairable Vehicle Certificate: Issued for nonrepairable vehicle.
The certificate will be conspicuously labeled with "nonrepairable"
across its front.
Flood Vehicle: Any vehicle that has been submerged in water over
door sill. Any subsequent titles will carry brand "flood."
(2) Titling and Control Methods: The task force recommended the
enactment of federal legislation to require the following.
If an insurance company is not involved in a damage settlement, the
owner must apply for a salvage title or nonrepairable vehicle
certificate. If an insurance company is involved, it must apply.
State records shall be noted when nonrepairable vehicle certificate
is issued.
When a vehicle has been flattened, baled, or shredded, the title or
nonrepairable vehicle certificate is to be returned to the state.
State records will show the destruction, and no further ownership
transactions for the vehicle will be permitted.
State records shall be noted when a salvage title is issued. The
vehicle cannot be titled without a certificate of inspection.
After a vehicle with a salvage title has passed antitheft and safety
inspections, a decal will be affixed to left front door, and a
certificate will be issued indicating that inspections were passed.
Owner of a vehicle with a salvage title may obtain a rebuilt salvage
title by presenting the salvage title and certificate that
inspections were passed.
(3) Duplicate Title Issuance: The task force recommended the states
strengthen and have uniform controls on the issuance of duplicate
titles as follows.
If duplicate titles are issued over the counter, they will be issued
only to the vehicle owner and only after proof of ownership and
personal identification are presented.
Applications for duplicate titles should be multipart forms with
sworn statements as to truth of the contents.
When power of attorney is involved, the duplicate title should be
mailed to a street address, and not to a post office box. Also,
states should consider mailing one part of the multipart application
form to the owner of record.
Fees are to be set to offset costs of adoption of these
recommendations.
Criminal penalty for offenses in this area should be a felony crime.
Duplicate titles should be conspicuously marked as duplicate.
(4) National Uniform Antitheft Inspection for Rebuilt Salvage
Vehicles: The Task Force recommended the following specific steps.
Requesters for inspections provide declaration of vehicle damages and
replacement parts, supported by vehicle titles, etc.
Component parts and/or vehicles, if unidentified, having an altered,
defaced, or falsified vehicle identification number be contraband and
destroyed.
Provide minimum selection and training standards for certified
inspectors who are employed by the states. The inspectors should be
afforded immunity when acting in good faith.
Inspection program should be self-supported by fees.
(5) National Uniform Safety Inspection for Rebuilt Salvage Vehicles:
The Task Force recommended the following.
All states institute a safety inspection for rebuilt salvage
vehicles. (The Task Force recommended criteria that it said should
be considered as the minimum standards.)
If contracted to a private enterprise, the entity must meet
Transportation-established training and equipment standards.
The vehicles be inspected and certified with respect to individual
repair and inspections, but not with respect to the states'
obligation to license and audit the performance of private enterprise
chosen as licensees.
(6) Exportation of Vehicles: The task force recommended the
following.
No exportation without proof of ownership being provided U.S.
Customs Service. Customs will provide vehicle identification numbers
to the titling information system.
(7) Funding: The task force recommended that the federal, state, and
local costs be funded from the following sources:
-- federal appropriations and grants,
-- state revenues and user fees,
-- federally mandated fees, and
-- money obtained from enforcement penalties and from sale of seized
contraband.
(8) Enforcement: The task force recommended the following.
Investigative authority and sanctions should parallel those contained
in Title IV of the Motor Vehicle Information and Cost Savings Act. A
portion of federal highway funds should be withheld if a state does
not comply with federal legislation implementing the task force's
recommendations, within 3 years after enactment.
DEPARTMENT OF TRANSPORTATION
POSITION
------------------------------------------------------- Appendix I:0.1
Transportation agreed with all task force recommendations except the
exportation (recommendation 6) and highway fund sanctions
recommendations (part of recommendation 8). It took no position on
the exportation recommendations, saying that was the responsibility
of the U.S. Customs Service. Transportation opposed using the
highway fund as an enforcement tool.
RECOMMENDATIONS OF THE FEDERAL
ADVISORY COMMITTEE ON THE NATIONAL
STOLEN AUTO PART INFORMATION
SYSTEM
========================================================== Appendix II
The following information was excerpted from the Final Report of the
National Stolen Auto Part Information System (NSAPIS) Federal
Advisory Committee, dated November 10, 1994.
SYSTEM ADMINISTRATION AND
OVERSIGHT
------------------------------------------------------ Appendix II:0.1
(1) The Committee recommends that the National Insurance Crime Bureau
(NICB) serve as the System Administrator for NSAPIS, and the Attorney
General enter into an agreement with NICB, at no cost or a nominal
cost to the government, for the operation of NSAPIS. The Committee
believes that NICB possesses the necessary resources, skills, and
infrastructure to successfully maintain and administer NSAPIS.
(2) The Committee recommends that a written agreement be developed
that clearly defines the role, responsibilities, and requirements for
NICB as the NSAPIS Administrator.
(3) The Committee recommends that Congress enact legislation
establishing an Oversight Committee to work with NICB to develop and
maintain NSAPIS. The Committee recommends that the NSAPIS Oversight
Committee be formed immediately. In addition, the Committee
recommended a list of pre-and post-implementation functions that the
NSAPIS Oversight Committee should handle.
(4) The Committee strongly recommends that the Oversight Committee
have representation from all affected elements of the automobile
industry, insurance industry, and law enforcement. Specific
industries and organizations the Committee believes should have
representation on the Oversight Committee include the NSAPIS
Administrator, Justice, NHTSA, Consumer Affairs Group, and two
members each representing the Automobile Recycling Industry,
Automobile Repair Industry, Automobile Insurance Industry, Law
Enforcement Agencies, and Automobile Parts Rebuilders Industry.
(5) The Committee recognizes that NICB may establish a Vehicle Parts
History File. The Committee said that tracking recycled parts data
may deter using stolen auto parts in repairing vehicles. The
information in the NICB's Vehicle Parts History File would be
supplied to law enforcement for investigative purposes.
(6) The Committee recommends that any organization serving as the
NSAPIS Administrator be prohibited from engaging in a parts locating
service. The Committee wants to ensure that the NSAPIS Administrator
does not compete with current parts locating services as a result of
their NSAPIS association and activity.
(7) The Committee recommends that the FBI, in conjunction with
Transportation and affected associations, engage in a comprehensive
training and awareness program to educate manufacturers, repairers,
insurers, safety inspectors, and law enforcement officials on
relevant issues, which affect the success of NSAPIS, such as parts
marking regulations and enforcement tactics.
LAW ENFORCEMENT AND
NOTIFICATION
------------------------------------------------------ Appendix II:0.2
(1) The Committee recommends that NSAPIS provide automatic
notification to a law enforcement agency having investigative
jurisdiction over the locality in which the inquiring NSAPIS user is
located, on stolen vehicle and vehicle part NSAPIS hits. The
notification should include a message to the law enforcement agency
to "confirm the current theft status through NCIC and conduct a
logical investigation."
(2) The Committee recommends, in the case of an NSAPIS hit, the
following message be sent to the person attempting to sell, transfer,
or install the vehicle part: "THE VEHICLE OR PART QUERIED HAS BEEN
REPORTED STOLEN AND THE SALE, TRANSFER, OR INSTALLATION OF THIS
VEHICLE OR PART MUST BE TERMINATED. YOUR LOCAL LAW ENFORCEMENT
AGENCY HAS BEEN PROVIDED THE DETAILS OF THIS TRANSACTION."
(3) The Committee recommends, in the case where there is no NSAPIS
hit, that the person or organization attempting to sell, transfer, or
install the vehicle or part receive an NSAPIS-generated authorization
number.
SYSTEM SECURITY
------------------------------------------------------ Appendix II:0.3
(1) The Committee recommends that NSAPIS, at minimum, meet the C2
level security requirements as stated in the Department of Defense
Trusted Computer System Evaluation Criteria (DOD 5200.28-STD),
commonly referred to as the Orange Book.
DATA QUALITY
------------------------------------------------------ Appendix II:0.4
(1) The Committee recommends that manufacturers be encouraged to
provide updated information to NICB, including component numbering
sequences.
(2) The Committee recommends that efforts be undertaken to further
encourage law enforcement officials to dutifully report and verify
data for the NCIC Vehicle file.
(3) The Committee recommends that NSAPIS documentation include
information that informs inquirers of what occurs following both a
positive and a negative hit from NSAPIS.
SALVAGE AND JUNK VEHICLE
DEFINITION
------------------------------------------------------ Appendix II:0.5
(1) The Committee suggests that any vehicle that sustains damage
equal to or greater than 100 percent of its predamaged actual cash
value be declared "unrepairable - parts only." The NSAPIS Committee
said that the number of motor vehicle thefts can be significantly
reduced by eliminating the availability of salvage and junk vehicle
identification numbers and related paperwork.
THEFT STATUS DETERMINATION
AND VERIFICATION
------------------------------------------------------ Appendix II:0.6
(1) The Committee recommends that the theft status determination
occur through an electronic verification process that provides an
NSAPIS-generated authorization number to the inquirer.
(2) The Committee recommends that the only exception to electronic
verification be in those instances where NSAPIS cannot provide a
response within a "timely manner."
(3) The Committee recommends that in those instances where NSAPIS
cannot provide insurers a theft status verification in a timely
manner, a certificate be provided to the insurer, or a contracting
agent for the insurer, which allows for the sale or transfer of the
vehicle or part. The certificate shall be generated by the NSAPIS
Administrator. The Committee listed specific information that at a
minimum should be contained on the certificate.
(4) The Committee recommends that Congress enact legislation that
would provide for limited immunity (e.g., persons or organizations
authorized to receive or disseminate information from NSAPIS) to
protect NSAPIS participants acting in good faith.
VISUAL SIGHT CHECK AND
VERIFICATION
------------------------------------------------------ Appendix II:0.7
(1) The NSAPIS Committee recommends that any person engaged in
business as an insurance carrier shall, if such carrier obtains
possession of and transfers a junk motor vehicle or a salvage motor
vehicle
(a) verify, after performing a visual sight check on all applicable
major parts, whether any of those major parts are reported stolen.
The applicable major parts are those parts that have been designated
by NHTSA.
(b) provide verification to whomever such carrier transfers or sells
any such salvage or junk motor vehicle.
(2) The Committee recommends that insurers be allowed to contract out
the verification tasks, but the insurer must still be identified on
the certificate, when necessary, to the purchaser.
(3) The Committee recommends that all self-insured entities be
required to perform vehicle and parts verifications in the same
manner that insurance companies are required to do.
(4) The Committee recommends that salvage and junk vehicles that are
impounded and to be sold at government auction be verified through
NSAPIS before any sale or transfer takes place.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III
GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C.
James M. Blume, Assistant Director, Administration of
Justice Issues
Carl T. Trisler, Evaluator-in-Charge
Janice M. Turner, Evaluator
Pamela V. Williams, Communications Analyst
OFFICE OF THE GENERAL COUNSEL,
WASHINGTON, D.C.
Ann H. Finley, Senior Attorney
ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C.
Nancy M. Donnellan, Information Systems Analyst
*** End of document. ***