[Pages S5021-S5025]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATE DMV DIRECTORS' VIEWS ON TITLE BRANDING LEGISLATION
Mr. LOTT. Mr. President, the American Association of Motor Vehicle
Administrators recently provided me with letters it has received from
state motor vehicle administrators across the country on title branding
legislation. As a collective group, DMV directors are looking to
Congress to enact a balanced and responsible measure to combat title
fraud. Legislation that is based on real world experience. Legislation
that they can implement.
As my colleagues know, I reintroduced the National Salvage Motor
Vehicle Consumer Protection Act, S. 655 back in March. This legislation
is similar to the bipartisan title branding bill Senator Ford and I
coauthored during the 105th Congress. Legislation that received 57
cosponsors and which overwhelmingly passed the House of Representatives
with some modifications last October.
S.655 is an appropriate legislative solution to a growing national
problem. A problem that costs millions of unsuspecting used car buyers
billions of dollars and places motorists in every state at risk.
Everyday, severely damaged cars are put back together by unscrupulous
rebuilders who sell these vehicles without disclosing their previous
damage history. They are able to shield the vehicle's history due to
significant advances in technology and, in large part, because their is
a hodgepodge of titling rules throughout the nation. They take
repatched vehicles, or their titles, to states that have minimal or no
salvage vehicle rules and have them retitled with no indication that
the vehicle previously sustained significant damage.
The National Salvage Motor Vehicle Consumer Protection Act would help
curtail title washing by encouraging states to adopt a model title
branding program for salvage, rebuilt salvage, flood, and nonrepairable
vehicles. The bill provides states with incentives to establish minimum
titling definitions and standards. This is key. It is particularly
aimed at that those states which need to bring their rules and
procedures to a universally accepted minimum standard.
In 1992, as part of the Anti-Car Theft Act, Congress mandated the
establishment of a Motor Vehicle Titling, Registration, and Salvage
Advisory Committee to devise a model salvage vehicle program. The
Salvage Advisory Committee, led by the U.S. Department of
Transportation, issued its findings in February 1994. Its report
recommended specific uniform definitions and standards for severely
damaged passenger vehicles. It included a 75% damage threshold for
salvage vehicles, anti theft inspections for salvage vehicles before
they could be placed back on the road, and the permanent retirement of
vehicles that are unsafe for operation and have no value except as a
source of scrap or parts. The report recommended the branding of titles
as the most appropriate method for disclosing a severely damaged
vehicle's prior history.
Mr. President, Senator Ford and I simply drafted legislation that
would largely codify the Salvage Advisory Committee's recommendations.
Recommendations that encompassed the wisdom of all of the experts on
titling matters. This committee of key stakeholders, led by the U.S.
Department of Transportation, provided real world solutions to address
title fraud and automobile theft. Solutions based on state motor
vehicle titling trends--uniform titling definitions and standards that
states would be willing to accept.
Senator Ford and I introduced a sound, reasonable, and appropriately
balanced measure during the 105th Congress. It did not take sides. It
did not codify the recommendations of one particular interest group. It
did not benefit one group at the expense of another. Instead, it
reflected a balanced, bipartisan consensus. Even so, a number of
significant changes were incorporated during the last Congress to
accommodate the concerns raised by certain State Attorneys General,
consumer groups and others. I would like to highlight some of the
revisions made by me in a good faith effort to satisfy the concerns
expressed and to advance the bill.
The ``Salvage'' vehicle threshold was lowered from 80% to 75%--so
that if a late model vehicle has sustained damage exceeding 75 percent
of its pre-accident value, it would be branded ``salvage. The bill also
allowed a state to cover any vehicle regardless of its age.
The original bill did not allow conforming states to use synonymous
terms. That has been stricken from the bill--so now states may use
additional terms to define damaged vehicles. For example, a state can
use the bill's ``nonrepairable" definition and can also use another
term such as ``junk'' if it wants to have a different definition to
describe parts only vehicles.
The revised bill included a new provision granting state attorney's
general the ability to sue on behalf of citizens victimized by fraud
and to recover monetary judgements for consumers.
It included two new prohibited acts--failure to make a flood
disclosure and moving the vehicle or its title into interstate commerce
to avoid the bill's requirements.
Another new provision makes it clear that the bill will not affect
any private right of action available under state law.
The bill clearly established that states could provide additional
disclosures beyond those identified in the legislation.
At the request of Senator Hollings, a new provision was added
regarding the Secretary of Transportation advising automobile dealers
of the prohibition on selling vans as school buses.
Instead of penalizing states for non-participation by withholding
National Motor Vehicle Titling Information System (NMVTIS) funding, my
bill now provides states with incentive grants to encourage their
participation. This was a very good recommendation offered by the U.S.
Department of Transportation. It takes into account the fact that 20 or
more states will have received their NMVTIS funding by the time the
bill becomes effective. These new grants can be used by participating
states to issue new titles, establish and administer theft or safety
inspections, and enforce titling requirements.
This voluntary approach also gets around the very real concerns that
states and the Supreme Court have raised about Congress requiring
states to legislatively adopt federal regulations. Remember, motor
vehicle titling has been, up to this point, almost exclusively a state
function. This revised approach also overcomes the strong possibility
that preemptive federal titling rules and procedures would impose a
significant federal unfunded mandate on states.
The revised bill also incorporates a change made by the House of
Representatives last year which allows states to adopt an even lower
salvage threshold if it chooses. It simply does not start the threshold
at 65% which, while advocated by some, has been expressly rejected by
states. I think it would be irresponsible for Congress to establish a
minimum federal salvage threshold that is not in use anywhere and which
states have maintained that
[[Page S5022]]
they do not want. S.655 provides a very reasonable compromise. Those
who want a lower salvage threshold than 75% are free to work with state
legislatures to convince them that a lower threshold in their states is
warranted.
Also, at the request of the National Association of Attorney's
General, S.655 includes provisions which require: the retail value of a
``late model vehicle'' to be adjusted by the Secretary of
Transportation every five years; flood vehicle inspections to be
conducted by an independent party; and the Secretary's establishment of
a publicly accessible national record of conforming states.
Mr. President, I believe S.655 is the right legislative solution to
address title fraud. It creates a model program based on balanced
titling definitions and standards for salvage, rebuilt salvage, flood,
and nonrepairable vehicles.
It does not violate the Supreme Court's rulings on federal versus
state roles and responsibilities. Instead it establishes a voluntary
titling framework.
It is not a federal unfunded mandate. Instead it provides states with
seed money to encourage their participation.
It does not take away a state's NMVTIS funding or jeopardize the
implementation of this system. Instead, it fosters maximum state
participation in this important national title information system.
It does not harm consumers who own low value vehicles or cause motor
vehicles to be branded unnecessarily. Instead, it adopts the reasonable
thresholds recommended by the Salvage Advisory Committee and it focuses
on severely damaged vehicles and pre-purchase disclosure.
It does not force otherwise repairable vehicles to be junked because
of arbitrary thresholds. Instead, it subjects vehicles to a rational
vehicle retirement standard based on a case-by-case determination. A
standard employed by California, Illinois, and a number of other
states.
It leaves intact state criminal penalties and causes of action
without imposing significant additional burdens on the already
overwhelmed federal court system.
Mr. President, the National Salvage Motor Vehicle Consumer Protection
Act is a sound, reasonable, and workable title branding measure. This
is not just my opinion, but the view of state motor vehicle
administrators. These are the experts on the front line. The very
people who would be responsible for administering the provisions of the
National Salvage Motor Vehicle Consumer Protection Act.
Mr. President, I ask unanimous consent to have printed in the Record
several letters from state motor vehicle administrators on the issue of
title branding legislation.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mr. LOTT. I ask my colleagues to take heed of the wisdom offered by
the many DMV directors who submitted comments on S.655 and other title
branding proposals.
Congress needs to pass S.655, the National Salvage Motor Vehicle
Consumer Protection Act, for America's used car buyers and motorists
and for the people who have to administer titling rules.
Exhibit 1
American Association of
Motor Vehicle Administrators,
Arlington, VA, March 22, 1999.
To: Chief Motor Vehicle Administrators, Chief Law Enforcement
Officers
From: Kenneth M. Beam, President & CEO
Re: Introduction of Salvage Titling Legislation
I am pleased to report that Senator Trent Lott (R-MS) along
with 13 co-sponsors recently introduced S. 655, the National
Salvage Motor Vehicle Consumer Protection Act of 1999. This
bill establishes national uniform requirements regarding the
titling and registration of salvage, nonrepairable and
rebuilt vehicles. AAMVA has worked closely with Senator
Lott's staff to assure that the bill reflects AAMVA policy on
uniform salvage definitions and procedures.
For the most part this bill mirrors language in S. 852,
which was introduced by Senator Lott and supported by 57
members of the Senate in the 105th Congress. However, there
are two major differences in S. 655 we would like to
highlight. First, the bill does not require that states who
receive federal funding from the Department of Justice for
the National Motor Vehicle Title Information System (NMVTIS)
to conform with the requirements of the bill or place a
notice on the certificate of title that their state is not in
compliance.
Second, the bill includes incentive grants for states that
do carry out its provisions. S. 655 authorizes $16 million to
states for fiscal year 2000. No state that is eligible for
the grant shall receive less than $250,000. The ratio shall
be apportioned in accordance with section 402, Title 23 of
the U.S. Code. Any state that receives a grant under this
section shall use the funds to carry out the provisions of
this bill including such performance related activities as
issuing titles, establishing and administering vehicle theft
or salvage vehicle safety inspections, enforcement and other
related purposes.
In addition, AAMVA has worked closely with other interested
organizations to respond to concerns raised by the National
Association of Attorneys General (NAAG). We are enclosing a
copy of our response to those concerns.
If you have questions or comments, please direct them to
either Linda Lewis, director of Public & Legislative Affairs
or Larry Greenberg, vice president, Vehicle Services at 703-
522-4200.
____
National Association of
Motor Vehicle Administrators,
Arlington, VA, March 31, 1999.
To: Chief Motor Vehicle Administrators, Chief Law Enforcement
Officers.
From: Kenneth M. Beam, President & CEO.
Re introduction of companion salvage titling legislation.
A copy of Senator Lott's salvage legislation, the National
Salvage Motor Vehicle Consumer Protection Act, S. 655, was
recently forwarded to you for review and comment. AAMVA
strongly supports this version, which mirrors the Salvage
Advisory Committee's recommendations and current AAMVA
policy. On March 23, 1999, Senator Dianne Feinstein
introduced companion salvage legislation, the Salvaged and
Damaged Motor Vehicle Information Disclosure Act, S. 678. We
believe this bill will create a tremendous burden on
jurisdictions to implement and will increase complexity and
costs with regard to salvage definitions and standards
without any corresponding gains in uniformity. In addition,
many of its provisions are in conflict with AAMVA policy.
Many of AAMVA's concerns were addressed in the response to
the National Association of Attorneys General Working Group
(NAAG) who support similar provisions that are included in S.
678. Our comments to NAAG were included in the mailing dated
March 22, 1999. However, we feel it important to highlight a
few areas of major concern with S. 678. The bill: Establishes
a 65 threshold for salvage vehicles; establishes a 90%
nonrepariable threshold; establishes disclosure requirements
for vehicles sustaining $3,000 of damage suffered in one (1)
incident; requires states to comply with the legislation to
receive federal funding for NMVTIS; and does not include
incentive grants to states that implement the legislation as
included in S. 655.
AAMVA's comments to NSSG provide more detail on these and
other signs. Please review the companion legislation and
forward any comments or concerns you have with the bill to
Linda Lewis by April 15, 1999. Your comments will help ensure
that the Association accurately represents the positions of
state motor vehicle administrators. If you have any questions
about the bill, please direct them to Linda or Larry
Greenberg at 703-522-4200.
____
Maryland Motor
Vehicle Administration,
Glen Burnie, MD, April 12, 1999.
MEMORANDUM
To: Linda Lewis, AAMVA
From: Anne S. Ferro, Administrator
Re: National Salvage Act--SB 655
Attached please find Maryland's review of S. 655 as it
relates to salvage laws in our state. Based on the review by
several key program managers, we have affirmed Maryland's
support for this bill. Although numerous consumer advocate
groups and the National Association of Attorneys General
(NAAG) appear to oppose the bill, it is in the best interest
of law enforcement and consumers to have a bill that
establishes national uniform regulations governing salvage.
We oppose S. 678 introduced by Senators Feinstein and
Levin. As you state in your cover memo, the alternate salvage
bill has constraints which would be very difficult to
enforce.
Maryland also favors NMVTIS as the project will benefit law
enforcement and Motor Vehicle Administrations in combating
title fraud. Maryland is committing to re-evaluating its
participation in the program once the pilot program is up and
running. Our withdrawal from the project last year was due to
current costs involved and constraints relating to our title
and registration system as well as Y2K.
Thank you for the opportunity to voice our support for S.
655.
Enclosure.
Memorandum
To: Thomas M. Walsh, Director, Driver and Vehicle Policies
and Programs
From: Eltra Nelson, Chuck Schaub, Victoria D. Whitlock
Date: April 7, 1999
Subj: AAMVA Legislative Alert: Introduction of S. 655:
National Salvage Motor Vehicle Consumer Protection Act of
1999
[[Page S5023]]
As requested, we have reviewed the above-referenced Lott
Bill S. 655 and, although there are differences between
Maryland's laws relating to salvage vehicles and this bill,
we are generally in agreement with the goals of the proposed
legislation. As urged by Congress in the Anti Car Theft Act
of 1992, there needs to be more uniformity in state title
branding laws if we are to defer the criminal activities of
the fraudulent rebuilders, who are thriving under the current
patchwork system. We offer the following comments:
If Maryland intends to support this initiative, a decision
must be made on the best way to proceed, as Maryland's
current law is inconsistent with the provisions of the
federal bill. Guidance from the Attorney General's Office
would be helpful in charting our course.
Maryland MVA was one of the National Motor Vehicle Title
Information System's (NMVTIS) pilot states, but due to
technical problems (Y2K, plans to reengineer TARIS) we
temporarily discontinued participation. It is the MVA's
intention to resume participation once these problems are
resolved.
S. 655 definition 33301(a)(1) ``passenger motor vehicle''
includes multi-purpose passenger vehicles, and certain trucks
including a pickup truck of not more than 10,000 pounds for
purposes of the salvage law. We agree with the rationale for
expanding the definition in the context of what constitutes a
``salvage vehicle'' (see next bulleted item). MD TR law has
separate definitions (11-144.1, 11-136.1, 11-171, 11-176).
S. 655 term ``salvage vehicle'' 33301(a)(2) means any
``passenger motor vehicle'' other than a flood vehicle or a
nonrepairable vehicle which has been wrecked, destroyed, or
damaged . . . Conversely, MD TR 11-152 definition of
``salvage'' refers to ``any vehicle that has been damaged by
collision, fire, flood, accident, trespass, or other
occurrence.'' Flood and nonrepairable vehicles are defined
separately (3301(a)(6) and (12)) and do not qualify for a
salvage certificate. As recommended by the Federal Advisory
Committee, the definitions of salvage vehicles, nonrepairable
vehicles, and flood vehicles should be mutually exclusive to
promote consumer awareness and uniformity. The bill specifies
that once branded, a ``nonrepairable vehicle'' can never be
titled or registered for use on roads or highways.
(Comparably, Maryland vehicles branded ``Not Rebuildable,
Parts Only'' also cannot be converted into a title.) The bill
also specifies that to avoid subsequent branding as a ``flood
vehicle'', the owner or insurer must have the vehicle
inspected by an independent party.
S. 655 permits any individual or entity to certify the
amount of damage and costs of repairs to rebuild or
reconstruct. MD Law allows only insurance companies to make
this certification.
S. 655 ``late model vehicle'' means model year designation
of or later than the year in which the passenger motor
vehicle was wrecked, etc. or any of the six preceding years;
OR, has a retail value of more than $7,500. To be classified
as a salvage vehicle, the cost of repairs to rebuild or
reconstruct the vehicle must exceed 75 percent of the retail
value of the vehicle. Maryland brands vehicles less than 7
years old when damage is greater than fair market value as
``rebuilt salvage.'' Regarding the bill's 75 percent
threshold, we agree with AAMVA's rationale: ``. . . the rule
of thumb level of damage used by insurers in making a
determination of whether to `total' a wrecked vehicle is
damage that exceeds 75% of a vehicle's pre-accident value.''
The bill permits states to use the term ``older model salvage
vehicle'' to designate a wrecked, destroyed, or damaged
vehicle that does not meet the definition of a ``late mode
vehicle.''
S. 655 (33302) requires states who receive funds under
33308 to disclose in writing on the certificate of title,
when ownership is transferred and when indicated by ``readily
accessible'' records, that the passenger motor vehicle was
previously issued a title that bore any word or symbol
signifying that the vehicle was ``salvage, older model
salvage, unrebuildable, parts only, scrap, junk,
nonrepairable, reconstructed, rebuilt, damaged by flood, and
the name of the State that issued that title.
Inspection decal--S. 655 requires the inspection official
to affix a permanent decal to the driver's door jam after a
passenger motor vehicle titled with a salvage title has
passed the state required inspections. According to Corporal
Dupczak, the Maryland State Police oppose the placement of a
decal, because it can be removed; however, the law specifies
the decal shall comply with the ``permanency requirements''
established by the Secretary.
Disclosure and Label: S. 655 (33303) A person, prior to
transfer of ownership, shall give the transferee written
disclosure that the vehicle is a rebuilt salvage vehicle. A
label shall be affixed by the individual who conducts the
applicable state anti-theft inspection in a participating
state to the windshield or window of a rebuilt salvage
vehicle before its first sale at retail. Note: We assume that
the ``brand'' notation on the front of the title certificate
would serve as the ``written disclosure.''
S. 655 (33302(c)) requires the USDOT to establish a
National Record of Compliant States. The Secretary shall work
with States to update the record upon the enactment of a
State law which causes a State to come into compliance or
become noncompliant with the requirements of this law.
Section 33308 provides for incentive grants of not less
than $250,000 for each state that demonstrates it is taking
appropriate actions to implement the provisions of this law.
Effect on State law: Unless a state, that receives funds
under section 33308, is in compliance with 33302(c),
effective on the date the rule is promulgated, the provisions
shall preempt all state laws to the extent they are
inconsistent with the provisions of this law, which:
Set forth the form of the passenger motor vehicle title.
Define, in connection with a passenger motor vehicle part
or part assembly separate from a passenger motor vehicle),
any term defined in section 33301 or the terms ``salvage'',
``nonrepairable'', or ``flood'', or apply any of those terms
to any passenger motor vehicle (but not to a part or part
assembly separate from a passenger motor vehicle); (this
requirement does not preempt state use of the terms
``passenger motor vehicle'' or ``older model salvage'' in
unrelated statutes.
Set forth titling, recordkeeping, anti-theft inspection, or
control procedures in connection with a salvage, rebuilt
salvage, nonrepairable, or flood vehicle.
Nothing is this law may be construed to affect any private
right of action under state law.
Additional disclosures of a passenger motor vehicle's title
status or history, in addition to the terms defined in this
law, shall not be deemed inconsistent.
States receiving funds shall make titling information
maintained by the state available for use in operating the
National Motor Vehicle Title Information System (NMVTIS).
Participating states, before issuing a certificate of title,
shall perform instant title-verification checks.
Maryland designates the following brands:
----------------------------------------------------------------------------------------------------------------
SALVAGE BRAND TITLE BRAND
----------------------------------------------------------------------------------------------------------------
Damage is greater than fair market value..... This will cause the title to be branded REBUILT SALVAGE. Only
vehicles less than 7 years old are to be branded when converted
to a title. Once branded, the brand is to be carried through to
subsequent titles.
Damage is equal to or less than fair market The title will not be branded. DO NOT ENTER XSALVG IN THE BRAND
value. FIELD. THE TITLE IS NOT TO BE BRANDED.
Not Rebuildable, Parts Only, Not to be Cannot be converted into a title.
Retitled.
Abandoned Vehicle Note: S. 655 does not This will cause the title to be branded REBUILT SALVAGE. This
provide for this category. applies to all vehicles regardless of subsequent titles.
Out of State Salvage Certificate............. This will cause the title to be branded XSALVAGE. The brand is to
be carried through to subsequent titles.
Out of State Titles Branded; SALVAGE, XSALVAGE will show in the brand field or the brand from the out-
XSALVAGE, FLOOD, etc. of-state title will be entered in the brand field. The brand is
to be carried through to subsequent titles.
----------------------------------------------------------------------------------------------------------------
____
Michigan Department of State,
Lansing, MI, April 16, 1999.
Re: comments on companion salvage titling legislation.
Linda Lewis,
Legislative Director, American Association of Motor Vehicle
Administrators, Arlington, VA
Dear Ms. Lewis: After receiving Kenneth Beam's Legislative
Alert last Friday regarding the recently introduced Companion
Salvage Titling legislation (S. 678), we did our best to
quickly review and compile comments from a variety of areas
within our Department. We agree with AAMVA's assessment that
this bill could be very problematic for states to implement,
for a variety of reasons. Michigan feels very strongly that
this bill should not move forward, and that any action on the
subject of Salvage Titling should follow the direction of the
AAMVA-sponsored Salvage bill (S. 655). However, given the
tight timeframes for response and our need to solicit input
from many areas of our Department, we have only had time for
a very cursory review of this legislation. If this bill has
any chance of moving forward, we would appreciate prompt
notification, so that we can prepare a more detailed summary
of our concerns and suggestions.
An over-riding problem with S. 678 is the lack of detail
regarding the specific requirements that would be imposed. In
its current version, S. 678 creates new terminology,
categories, enforcement requirements, and other
implementation language that seriously lacks detail with
regard to actual requirements. This type of approach would
leave definition of critical details up to the rules
promulgation process, which is a major timing problem in that
detailed concerns would not be addressed until after passage
of the bill.
The proposed changes appear to be quite complex, as well as
costly overall, and there is no provision for State funding.
In addition, many issues would require State legislation that
would be difficult to obtain, and difficult to implement,
without a corresponding need or significant improvement as
compared to the AAMVA-supported bill. Also, our Department is
unable to take on any new initiatives requiring major data
processing changes, due to Year 2000 and
[[Page S5024]]
other priorities, so these changes would frankly not be able
to be implemented in Michigan within any reasonable
timeframe.
Other more specific concerns include:
The companion bill would make substantial changes to
Michigan's current definitions of ``salvage'' and ``scrap''
vehicles, adds requirements related to leased vehicles, and
includes a definition of ``flood'' vehicles different from
what AAMVA proposes. We see all of these issues as very
problematic for Michigan, requiring State legislation that
would prove difficult to pass, and would cause a variety of
problems from an implementation standpoint--including major
overhauls to our computer system, which is an unrealistic
expectation.
Sellers of salvage, flood, or non-repairable vehicles would
be required to provide written disclosure of these facts,
which would have to be signed by the seller and the buyer.
This is another issue that would require passage of State
legislation, and would also be very difficult from an
enforcement standpoint.
There are several potential title format issues, including
requirements for attachments, that we see as being unworkable
and quite difficult from an implementation standpoint.
As AAMVA has already pointed out, the new 65% threshold for
salvage vehicles and the disclosure requirement for damages
greater than $3,000 are both unworkable and unrealistic,
especially given current vehicle values. These portions of
the proposal also create problems related to those already
mentioned, such as title format and computer programming
issues, without providing a justifiable improvement to the
system.
This proposal also allows a person who rebuilds a salvage
or flood-damaged vehicle to certify its road-worthiness. This
raises conflict of interest concerns. (By comparison,
Michigan law requires a rebuilt salvage vehicle to be
inspected by a specially trained law enforcement officer.)
Again, Michigan feels very strongly that the Companion
Salvage Titling legislation introduced by Senator Feinstein
has serious flaws, lacks crucial detail regarding
implementation options, and poses nothing that would present
improvements to the Lott bill already introduced and
supported by AAMVA.
Please do whatever possible to ensure we are informed of
any positive action on this bill. If you need additional
details or have any questions on our position, please do not
hesitate to contact me.
Sincerely,
Judith Overbeek,
Deputy Secretary of State,
Service Delivery Administration.
____
Office of Motor Vehicles, Department of Public Safety and
Corrections,
Baton Rouge, LA, May 3, 1999.
AAMVA, Arlington, VA.
Attention: Linda Lewis
Dear Ms. Lewis: In regard to the Salvaged and Damaged Motor
Vehicle Information Disclosure Act. S. 678, the State of
Louisiana has very serious concerns regarding many
provisions, as follows:
The 65% threshold for salvage vehicles.
Definitions regarding non-repairable and major damage.
Secure paper disclosure requirements.
Lack of grant funds for implementation.
We believe that Louisiana has a good salvage title law in
place. As a state that has been branding salvage and rebuilt
vehicles for a number of years, it is frustrating to see
legislation that will result in problems for our state. We've
come so far in this area, the thought of increasing an
already complex, cumbersome procedure is disturbing. This Act
is another attempt to ``punish the bad guys'' with something
that will, in reality, only ``punish the good guys.''
Thank you for the opportunity to respond, and I know you
will convey our opinion that this legislation will not
increase uniformity among the jurisdictions. It will merely
place unnecessary burdens on state agencies who are already
force to ``do more with less'' and trying to eliminate
bureaucratic red tape, not create it.
Please keep us posted of any additional developments
regarding this issue.
Sincerely,
Kay Covington,
Commissioner.
____
S. 678--Salvage and Damaged Motor Vehicle Information Disclosure Act
No grant monies include, provision that if State does not
comply State may not receive grant funds under 30503(c).
Definitions: Salvage--65% damage of retail value*; Non-
Repairable--90% damage of retail value; and Major Damage--
$3000.00 damage on one incident.
*Salvage can also be defined when designated by owner or
when vehicle is transferred to insurance carrier in
connection with damage.
Disclosure Requirement: Requires States to place a
disclosure on title, within one year of passage of law,
stating whether vehicle is salvage, flood damaged, non-
repairable or substained major damage.
Disclosure must be on secure paper and must be treated like
the conforming title and odometer law.
Dealers and lessors must retain disclosure for 5 years.
State must be notified of all vehicles that are
unrepairable.
Requirements for Rebuilt Vehicles: (1) Certification of
inspection from rebuilder stating condition of vehicle (must
be on secure paper), and
(2) decal placed on door jam stating.
Non-Repairable cannot go back on road. May only be
transferred to an insurance carrier, automobile recycler or
dismantler.
After State receives disclosure of unrepairable that
vehicle may not be licensed for use in that State.
Proposed law states that a person who owns motor vehicles
that are used for personal, family, or household use shall
not be liable for failure to provide disclosure, unless they
have actual knowledge of requirement for disclosure.
____
State of New York,
Department of Motor Vehicles,
Albany, NY, April 15, 1999.
Linda Lewis,
AAMVA, Arlington, VA
Dear Ms. Lewis: In a March 31, 1999 memo to Chief Motor
Vehicle Administrators and Chief Law Enforcement Officers,
Mr. Kenneth Beam requested that comments and concerns
regarding the Salvaged and Damaged Motor Vehicle Information
Disclosure Act, S. 678, introduced by Senator Dianne
Feinstein, be forwarded to your attention. This legislation
is companion legislation to the National Salvage Motor
Vehicle Consumer Protection Act, S. 655, introduced by
Senator Lott.
Referring to S. 678 introduced by Senator Feinstein, the
New York State Department of Motor Vehicles agrees with the
concerns raised by AAMVA in their response to the National
Association of Attorneys General Working Group (NAAG),
specifically: The 65% threshold for damage in order to
declare a vehicle a salvage vehicle; the 90% non-repairable
threshold; the $3,000 limit of damages attributable to one
(1) incident; the requirement of compliance in order to
receive federal funding for NMVTIS; and the lack of incentive
grants for states that implement the legislation.
The 65% threshold for damage in order to declare a vehicle
a salvage vehicle is much lower than the 75% that we
established through extensive discussions with the insurance
industry and others in New York. Further, it is also lower
than the recommendation made by the Presidential Commission
established in 1992 from the Anti-Car Theft Act.
Due to the ever-rising expense of owning a new vehicle, the
$3,000 limit for damages attributable to one (1) incident
would result in a remarkably high number of vehicles labeled
as salvage. With the average cost of a new vehicle
approximately $22,000, a $3,000 limit for damages is less
than 15%.
Lastly, Senator Feinstein's proposal requires states to
comply in order to receive funding for NMVTIS and does not
include incentive grants for states implementing the
legislation. The Lott proposal does not call for compliance-
based NMVTIS funding, and does offer incentive grants for
implementation.
In short, the New York State Department of Motor Vehicles
does not support the Salvaged and Damaged Motor Vehicle
Information Disclosure Act, S. 678 introduced by Senator
Dianne Feinstein, due to the concerns identified above.
Sincerely,
Richard E. Jackson, Jr.,
Commissioner.
____
Idaho DMV,
April 15, 1999.
Lewis, Linda,
`lindal@aamva.org'.
Subject: S. 678 Diane Feinstein Proposal
Idaho's current statutes do not conform to the requirements
of S. 678, and it is unlikely that legislation could be
enacted to conform. Therefore, funding to implement NMVTIS in
Idaho would be jeopardized.
It appears that he documentation requirements of S. 678 are
onerous, much more all-inclusive than the implementation of
the secure power of attorney processes. If disclosure
documents are required to issue every title transfer, many
transactions would be delayed, customers would be turned away
and inconvenienced. Public perception of the DMV would
suffer.
We are also concerned about the public resistance to non-
registration of vehicles that have sustained damage that is
90% of the fair retail market value before it was damaged.
For many older vehicles one dent would require that the
vehicle go the crusher, even though it may be a fully
operational and safe vehicle.
Edward R. Pemble,
Vehicle Services Manager.
____
Oregon Department of
Transportation, DMV Services,
Salem, OR, April 30, 1999.
Linda Lewis
Director of Public & Legislative Affairs, American
Association of Motor Vehicle Administrators, Arlington,
VA.
Dear Ms. Lewis: Brendan Peters requested a letter from
Oregon DMV regarding Senate Bill 678 and Senate Bill 655
pertaining to salvage of motor vehicles.
We are taking no position on either bill, but I hope the
following comments on both bills will be helpful in your up-
coming meetings with legislators.
Senate Bill 678
1. Requires excessive paperwork for both the public and
state agencies. For example, forms must be maintained for
five years.
[[Page S5025]]
2. There is no allowance for any type of electronic
process.
3. The 65% threshold for salvage vehicles is lower than all
states' current threshold. Oregon has a threshold for salvage
vehicles of 80% and many customers feel 80% is too high.
4. The definition of ``major damage'' may impact the
majority of recent year model vehicles.
5. Requires compliance with this legislation in order to
receive any funding for NMVTIS (National Motor Vehicle Title
Information System). Tying NMVTIS funding to this legislation
has potential to reduce the NMVTIS benefits if lack of
funding prevents states from participating in NMVTIS.
seante bill 655
1. Has a lower impact to the public and state agencies.
2. Allows for an electronic process.
3. The anti-theft inspection, if required, could have
significant workload impact.
4. There is no tie to the funding for NMVTIS.
5. There are provisions for an incentive grant to provide
money to states to implement legislation.
We hope these comments can be used to assure that federal
legislation on the salvage of motor vehicles accomplishes its
intended purpose without undo hardships on the public and the
states that must implement the law.
Sincerely,
Mari Miller,
Manager, Program Services.
____
Wisconsin Department of Transportation,
Madison, WI, April 14, 1999.
Linda Lewis,
AAMVA, Arlington, VA.
Dear Linda: I'm writing on behalf of the Wisconsin Division
of Motor Vehicles to respond to your request for comments on
the bill titled ``Salvaged and Damaged Motor Vehicle
Information Disclosure Act'' (S. 678) introduced by Senator
Feinstein.
Our concerns with this bill are:
definitions
It applies to all motor vehicles; no limit on age or value.
Flood damage definition is water-line based like the Lott
bill, but it doesn't go on to specify that electronic
components must actually have been damaged.
The whole concept of ``major damage'' being defined
strictly as a dollar amount ($3,000) with no provision for
rising prices seems problematic. A late model luxury car
could have very minimal damage with $3,000 repair costs,
while an old economy car could be considered nonrepairable
with $3,000 damage.
Like the Lott bill, salvage is defined both as a percentage
of fair market value (65% in S. 678 and 75% in S. 655) and
anything an insurance company pays a claim on and acquires
ownership of. The Lott bill excludes theft recoveries unless
damaged 75%. When we worked on Wisconsin's title branding
law, insurance companies were very upset at salvage-branding
what they called ``convenience totals.'' The insurance
industry will probably object to that in these bills, too.
disclosure
S. 678 requires: written disclosure on secure paper of
salvage, flood, nonrepairable or major damage (plus a
description of each occurrence--attached to the title. Each
reassignment needs its own disclosure statement. We've been
trying to avoid attachments to the title and make all
required disclosures on the title itself.
It looks like the disclosure statement could be made in the
title assignment area if the format conforms with federal
regulations (when they are promulgated).
It appears we'd need to have the attached disclosures
whether or not there is something to disclose, which could
mean lots of go-backs for incomplete applications.
rebuilding and inspection
The restrictions imposed by this bill would seem to
significantly reduce interest in rebuilding flood or salvage
vehicles. The rebuilder is also the inspector in this bill
and he or she must: Sign and attach to the title, a secure
inspection certificate attesting that ``original manufacturer
established repair procedures or specifications'' were
followed in making the repairs and inspections; affix a decal
to the door jamb or other conspicuous place; follow
``regulations promulgated'' describing qualifications and
equipment required to do inspection certifications; follow
``regulations promulgated'' that establish minimum steps for
inspection; and post up to a $250,000 bond (if required) to
protect the public against unsafe or inadequate repairs or
improper inspection certification.
So, the person who repairs a flood or salvage vehicle also
inspects it for safety and quality of repair--but not anti-
theft. There doesn't seem to be a provision for anti-theft
inspection.
nonrepairable vehicles
Nonrepairable vehicles can't be registered and can only be
transferred to an insurance company, automotive recycler or
dismantler--and only for the purpose of dismantling or
crushing.
So, the owner of a classic car that's damaged more than 90%
of its fair market value has no choice but to have it
dismantled or crushed--even if willing to pay whatever it
costs to get it back to legal operating condition.
penalties
A civil penalty of up to $2,000 may be charged for ``a
violation''--the violation doesn't have to be ``knowingly and
willfully'' performed.
However, if it is ``knowingly and willfully'' performed,
the penalty is the $2,000 fine, or three years in prison, or
both.
miscellaneous
We'd have to revise any of our laws that are inconsistent
with this. We would be able to keep our other brands
(manufacturer buyback, police, taxi, non-USA standard and
insurance claim--if we revised the percentage to 30-65%
damage).
Thank you for this opportunity to offer comments on the
``Salvaged and Damaged Motor Vehicle Information Disclosure
Act.'' On behalf of the Wisconsin DMV, I hope our ideas prove
useful. Please do not hesitate to contact me or Carson
Frazier (with our Bureau of Vehicle Services at 608-266-7857)
if you have any questions.
Sincerely,
Roger D. Cross,
Administrator.
____
State of Alabama,
Department of Revenue,
Montgomery, AL, April 14, 1999.
Ms. Linda Lewis,
Public and Legislative Affairs, AAMVA,
Arlington, VA.
Dear Ms. Lewis: Pursuant to President Beam's memo of March
31, 1999, we have reviewed S. 678 to ascertain its possible
effects on Alabama. Below is a listing of problems observed.
1. The bill establishes a 65% threshold for salvage
vehicles. Alabama has a 75% threshold to determine when a
vehicle is declared salvage. In addition, the proposed
legislation states that ``if the full cost of the damages
suffered in 1 incident is attributable only to cosmetic
damages, those damages shall not constitute major damage.''
Alabama has no such exemption for cosmetic damage when
determining whether a vehicle qualifies as a salvage vehicle.
2. The bill has a specific definition for a ``flood
vehicle.'' Alabama law does not distinguish between salvage
vehicles that have been declared salvage due to flood damage
and vehicles that have been declared salvage due to other
events. Vehicles that suffer flood damage in Alabama are
subject to the 75% threshold for a salvage vehicle and
receive a salvage title if damage to the vehicle is equal to
or greater than 75% of the retail value for the vehicle.
Alabama law does not require a vehicle to be branded as a
``flood vehicle.''
3. The bill provides a definition for a leased vehicle that
differentiates the vehicle from a non-leased motor vehicle.
Alabama law makes no such distinction.
4. The written disclosure requirements mandated by the bill
would be difficult to comply with when transfers involves
repossessions, disposal of an abandoned motor vehicles,
situations where ownership passes as a result of the death of
an owner, non-voluntary transfers by operation of law and
other situations where the transferor may not have personal
knowledge of previous vehicle damage.
5. The bill's prescribed use of a secure power of attorney
could prove to be burdensome in situations where there was a
transfer between individuals who do not have access to the
secure document.
6. The bill would be an unfunded mandate that would require
a costly re-design of the Alabama certificate of title and
the design and implementation of a new secure power of
attorney document and secure inspection form. Additional
costs would include: training costs for designated agents and
reprogramming costs for county offices, automobile dealers,
financial institutions, and insurance companies.
7. The disclosure requirements in the bill do not address
vehicle damage that occurred prior to the proposed
implementation date of the legislation. Therefore, it is
unlikely that this information would not be readily
accessible to transferor of the vehicle for a subsequent
disclosure statement.
8. The bill does not clearly specify who is responsible for
conducting a rebuilt salvage vehicle inspection.
In summary, the bill would be an administrative nightmare
for the State of Alabama to implement. In addition, based
upon the past experience of implementing the federal truth in
mileage act, the gains in uniformity among states would be
minimal for a substantial period of time and the costs would
be both immediate and significant. If additional input is
desired, please feel free to contact me at the address listed
below or at telephone (334) 242-9013.
Sincerely,
Mike Gamble,
Assistant Supervisor, Motor Vehicle
Division/Title Section.
____________________