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105th Congress                                            Rept. 105-285
                        HOUSE OF REPRESENTATIVES

1st Session                                                   Part 1
_______________________________________________________________________


 
     NATIONAL SALVAGE MOTOR VEHICLE CONSUMER PROTECTION ACT OF 1997

                                _______
                                

 September 30, 1997.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1839]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Commerce, to whom was referred the bill 
(H.R. 1839) to establish nationally uniform requirements 
regarding the titling and registration of salvage, 
nonrepairable, and rebuilt vehicles, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     1
Purpose and Summary..............................................     9
Background and Need for Legislation..............................     9
Hearings.........................................................    13
Committee Consideration..........................................    14
Rollcall Votes...................................................    14
Committee Oversight Findings.....................................    14
Committee on Government Reform and Oversight.....................    14
New Budget Authority and Tax Expenditures........................    14
Committee Cost Estimate..........................................    14
Congressional Budget Office Estimate.............................    15
Federal Mandates Statement.......................................    18
Advisory Committee Statement.....................................    18
Constitutional Authority Statement...............................    19
Applicability to Legislative Branch..............................    19
Committee Correspondence.........................................    19
Section-by-Section Analysis of the Legislation...................    20
Changes in Existing Law Made by the Bill, As Reported............    27
Dissenting Views.................................................    42

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``National Salvage Motor Vehicle 
Consumer Protection Act of 1997''.

SEC. 2. MOTOR VEHICLE TITLING AND DISCLOSURE REQUIREMENTS.

  (a) Amendment to Title 49, United States Code.--Subtitle VI of title 
49, United States Code, is amended by inserting a new chapter at the 
end:

   ``CHAPTER 333--AUTOMOBILE SAFETY AND TITLE DISCLOSURE REQUIREMENTS

``Sec.
``33301. Definitions.
``33302. Passenger motor vehicle titling.
``33303. Disclosure and label requirements on transfer of rebuilt 
salvage vehicles.
``33304. Report on funding.
``33305. Petitions for extensions of time.
``33306. Effect on State law.
``33307. Civil and criminal penalties.
``33308. Actions by States.

``Sec. 33301. Definitions

  ``For the purposes of this chapter:
          ``(1) Passenger motor vehicle.--The term `passenger motor 
        vehicle' shall have the same meaning given such term by section 
        32101(10), except, notwithstanding section 32101(9), it shall 
        include a multipurpose passenger vehicle (constructed on a 
        truck chassis or with special features for occasional off-road 
        operation), or a truck, other than a truck referred to in 
        section 32101(10)(B), when that vehicle or truck is rated by 
        the manufacturer of such vehicle or truck at not more than 
        10,000 pounds gross vehicle weight, and except further, it 
        shall only include a vehicle manufactured primarily for use on 
        public streets, roads, and highways.
          ``(2) Salvage vehicle.--The term `salvage vehicle' means any 
        passenger motor vehicle which--
                  ``(A) is a late model vehicle which has been wrecked, 
                destroyed, or damaged, to the extent that the total 
                cost of repairs to rebuild or reconstruct the passenger 
                motor vehicle to its condition immediately before it 
                was wrecked, destroyed, or damaged, and for legal 
                operation on the roads or highways, exceeds 80 percent 
                of the retail value of the passenger motor vehicle;
                  ``(B) is a late model vehicle which has been wrecked, 
                destroyed, or damaged, and to which an insurance 
                company acquires ownership pursuant to a damage 
                settlement (except in the case of a settlement in 
                connection with a recovered stolen vehicle, unless such 
                vehicle sustained damage sufficient to meet the damage 
                threshold prescribed by subparagraph (A)); or
                  ``(C) the owner wishes to voluntarily designate as a 
                salvage vehicle by obtaining a salvage title, without 
                regard to the level of damage, age, or value of such 
                vehicle or any other factor, except that such 
                designation by the owner shall not impose on the 
                insurer of the passenger motor vehicle or on an insurer 
                processing a claim made by or on behalf of the owner of 
                the passenger motor vehicle any obligation or 
                liability.
          ``(3) Salvage title.--The term `salvage title' means a 
        passenger motor vehicle ownership document issued by the State 
        to the owner of a salvage vehicle. A salvage title shall be 
        conspicuously labeled with the word `salvage' across the front.
          ``(4) Rebuilt salvage vehicle.--The term `rebuilt salvage 
        vehicle' means--
                  ``(A) any passenger motor vehicle which was 
                previously issued a salvage title, has passed State 
                anti-theft inspection, has been issued a certificate 
                indicating that the passenger motor vehicle has passed 
                the required anti-theft inspection, has passed the 
                State safety inspection in those States requiring a 
                safety inspection pursuant to section 33302(b)(8), has 
                been issued a certificate indicating that the passenger 
                motor vehicle has passed the required safety inspection 
                in those States requiring such a safety inspection 
                pursuant to section 33302(b)(8), and has a decal 
                stating `Rebuilt Salvage Vehicle--Anti-theft and Safety 
                Inspections Passed' affixed to the driver's door jamb; 
                or
                  ``(B) any passenger motor vehicle which was 
                previously issued a salvage title, has passed a State 
                anti-theft inspection, has been issued a certificate 
                indicating that the passenger motor vehicle has passed 
                the required anti-theft inspection, and has, affixed to 
                the driver's door jamb, a decal stating `Rebuilt 
                Salvage Vehicle--Anti-theft Inspection Passed/No Safety 
                Inspection Pursuant to National Criteria' in those 
                States not requiring a safety inspection pursuant to 
                section 33302(b)(8).
          ``(5) Rebuilt salvage title.--The term `rebuilt salvage 
        title' means the passenger motor vehicle ownership document 
        issued by the State to the owner of a rebuilt salvage vehicle. 
        A rebuilt salvage title shall be conspicuously labeled either 
        with the words `Rebuilt Salvage Vehicle--Anti-theft and Safety 
        Inspections Passed' or `Rebuilt Salvage Vehicle--Anti-theft 
        Inspection Passed/No Safety Inspection Pursuant to National 
        Criteria,' as appropriate, across the front.
          ``(6) Nonrepairable vehicle.--The term `nonrepairable 
        vehicle' means any passenger motor vehicle which is incapable 
        of safe operation for use on roads or highways and which has no 
        resale value except as a source of parts or scrap only or which 
        the owner irreversibly designates as a source of parts or 
        scrap. Such passenger motor vehicle shall be issued a 
        nonrepairable vehicle certificate and shall never again be 
        titled or registered.
          ``(7) Nonrepairable vehicle certificate.--The term 
        `nonrepairable vehicle certificate' means a passenger motor 
        vehicle ownership document issued by the State to the owner of 
        a nonrepairable vehicle. A nonrepairable vehicle certificate 
        shall be conspicuously labeled with the word `Nonrepairable' 
        across the front.
          ``(8) Secretary.--The term `Secretary' means the Secretary of 
        Transportation.
          ``(9) Late model vehicle.--The term `Late Model Vehicle' 
        means any passenger motor vehicle which--
                  ``(A) has a manufacturer's model year designation of 
                or later than the year in which the vehicle was 
                wrecked, destroyed, or damaged, or any of the six 
                preceding years; or
                  ``(B) has a retail value of more than $7,500.
        The Secretary shall adjust such retail value on an annual basis 
        in accordance with changes in the consumer price index.
          ``(10) Retail value.--The term `retail value' means the 
        actual cash value, fair market value, or retail value of a 
        passenger motor vehicle as--
                  ``(A) set forth in a current edition of any 
                nationally recognized compilation (to include automated 
                databases) of retail values; or
                  ``(B) determined pursuant to a market survey of 
                comparable vehicles with regard to condition and 
                equipment.
          ``(11) Cost of repairs.--The term `cost of repairs' means the 
        estimated retail cost of parts needed to repair the vehicle or, 
        if the vehicle has been repaired, the actual retail cost of the 
        parts used in the repair, and the cost of labor computed by 
        using the hourly labor rate and time allocations that are 
        reasonable and customary in the automobile repair industry in 
        the community where the repairs are to be performed.

``Sec. 33302. Passenger motor vehicle titling

  ``(a) Carry-Forward of Information on a Newly Issued Title Where the 
Previous Title for the Vehicle Was Not Issued Pursuant to New 
Nationally Uniform Standards.--For any passenger motor vehicle, the 
ownership of which is transferred on or after the date that is 1 year 
from the date of the enactment of this chapter, each State 
participating in the National Motor Vehicle Title Information System 
established under chapter 305 of subtitle VI of this title, in 
licensing such vehicle for use, shall disclose in writing on the 
certificate of title whenever records readily accessible to the State 
indicate that the passenger motor vehicle was previously issued a title 
that bore any word or symbol signifying that the vehicle was `salvage', 
`unrebuildable', `parts only', `scrap', `junk', `nonrepairable', 
`reconstructed', `rebuilt', or any other symbol or word of like kind, 
or that it has been damaged by flood.
  ``(b) Nationally Uniform Title Standards and Control Methods.--Not 
later than 18 months after the date of the enactment of this chapter, 
the Secretary shall by rule require each State participating in the 
National Motor Vehicle Title Information System established under 
chapter 305 of subtitle VI of this title, in licensing any passenger 
motor vehicle where ownership of such passenger motor vehicle is 
transferred more than 2 years after publication of such final rule, to 
apply uniform standards, procedures, and methods for the issuance and 
control of titles for motor vehicles and for information to be 
contained on such titles. Such titling standards, control procedures, 
methods, and information shall include the following requirements:
          ``(1) A State shall conspicuously indicate on the face of the 
        title or certificate for a passenger motor vehicle, as 
        applicable, if the passenger motor vehicle is a salvage 
        vehicle, a nonrepairable vehicle, or a rebuilt salvage vehicle 
        and whether such vehicle was damaged by flood.
          ``(2) Such information concerning a passenger motor vehicle's 
        status shall be conveyed on any subsequent title, including a 
        duplicate or replacement title, for the passenger motor vehicle 
        issued by the original titling State or any other State.
          ``(3) The title documents, the certificates, and decals 
        required by section 33301(4), and the issuing system shall meet 
        security standards minimizing the opportunities for fraud.
          ``(4) The certificate of title shall include the passenger 
        motor vehicle make, model, body type, year, odometer 
        disclosure, and vehicle identification number.
          ``(5) The title documents shall maintain a uniform layout, to 
        be established in consultation with the State or an 
        organization representing them.
          ``(6) A passenger motor vehicle designated as nonrepairable 
        shall be issued a nonrepairable vehicle certificate and shall 
        not be retitled.
          ``(7) No rebuilt salvage title shall be issued to a salvage 
        vehicle unless, after the salvage vehicle is repaired or 
        rebuilt, it complies with the requirements for a rebuilt 
        salvage vehicle pursuant to section 33301(4). Any State 
        inspectionprogram operating under this paragraph shall be 
subject to continuing review by and approval of the Secretary. Any such 
anti-theft inspection program shall include the following:
                  ``(A) A requirement that the owner of any passenger 
                motor vehicle submitting such vehicle for an anti-theft 
                inspection provide a completed document identifying the 
                vehicle's damage prior to being repaired, a list of 
                replacement parts used to repair the vehicle, and proof 
                of ownership of such replacement parts, as may be 
                evidenced by bills of sale, invoices, or, if such 
                documents are not available, other proof of ownership 
                for the replacement parts. The owner shall also include 
                an affirmation that the information in the declaration 
                is complete and accurate and that, to the knowledge of 
                the declarant, no stolen parts were used during the 
                rebuilding.
                  ``(B) A requirement to inspect the passenger motor 
                vehicle or any major part or any major replacement part 
                required to be marked under section 33102 for signs of 
                such mark or vehicle identification number being 
                illegally altered, defaced, or falsified. Any such 
                passenger motor vehicle or any such part having a mark 
                or vehicle identification number that has been 
                illegally altered, defaced, or falsified, and that 
                cannot be identified as having been legally obtained 
                (through bills of sale, invoices, or other ownership 
                documentation), shall be contraband and subject to 
                seizure. The Secretary, in consultation with the 
                Attorney General, shall, as part of the rule required 
                by this section, establish procedures for dealing with 
                those parts whose mark or vehicle identification number 
                is normally removed during industry accepted 
                remanufacturing or rebuilding practices, which parts 
                shall be deemed identified for purposes of this section 
                if they bear a conspicuous mark of a type, and applied 
                in such a manner, as designated by the Secretary 
                indicating that they have been rebuilt or 
                remanufactured. With respect to any vehicle part, the 
                Secretary's rule, as required by this section, shall 
                acknowledge that a mark or vehicle identification 
                number on such part may be legally removed or altered 
                as provided for in section 511 of title 18, United 
                States Code, and shall direct inspectors to adopt such 
                procedures as may be necessary to prevent the seizure 
                of a part from which the mark or vehicle identification 
                number has been legally removed or altered.
          ``(8) The Secretary shall establish nationally uniform safety 
        inspection criteria to be used in those States requiring such a 
        safety inspection. A State may determine whether to conduct 
        such safety inspection itself, contract with one or more third 
        parties, or permit self-inspection by a person licensed by such 
        State in an automotive-related business, all subject to 
        criteria promulgated by the Secretary hereunder. Any State 
        inspection program operating under this paragraph shall be 
        subject to continuing review by and approval of the Secretary. 
        A State requiring such safety inspection may require the 
        payment of a fee for the privilege of such inspection or the 
        processing thereof.
          ``(9) No duplicate or replacement title shall be issued 
        unless the word `duplicate' is clearly marked on the face 
        thereof and unless the procedures for such issuance are 
        substantially consistent with Recommendation three of the Motor 
        Vehicle Titling, Registration and Salvage Advisory Committee.
          ``(10) A State shall employ the following titling and control 
        methods:
                  ``(A) If an insurance company is not involved in a 
                damage settlement involving a salvage vehicle or a 
                nonrepairable vehicle, the passenger motor vehicle 
                owner shall apply for a salvage title or nonrepairable 
                vehicle certificate, whichever is applicable, before 
                the passenger motor vehicle is repaired or the 
                ownership of the passenger motor vehicle is 
                transferred, but in any event within 30 days after the 
                passenger motor vehicle is damaged.
                  ``(B) If an insurance company, pursuant to a damage 
                settlement, acquires ownership of a passenger motor 
                vehicle that has incurred damage requiring the vehicle 
                to be titled as a salvage vehicle or nonrepairable 
                vehicle, the insurance company or salvage facility or 
                other agent on its behalf shall apply for a salvage 
                title or nonrepairable vehicle certificate within 30 
                days after the title is properly assigned by the owner 
                to the insurance company and delivered to the insurance 
                company or salvage facility or other agent on its 
                behalf with all liens released.
                  ``(C) If an insurance company does not assume 
                ownership of an insured's or claimant's passenger motor 
                vehicle that has incurred damage requiring the vehicle 
                to be titled as a salvage vehicle or nonrepairable 
                vehicle, the insurance company shall notify the owner 
                of the owner's obligation to apply for a salvage title 
                or nonrepairable vehicle certificate for the passenger 
                motor vehicle and notify the State passenger motor 
                vehicle titling office that a salvage title or 
                nonrepairable vehicle certificate should be issued for 
                the vehicle, except to the extent such notification is 
                prohibited by State insurance law.
                  ``(D) If a leased passenger motor vehicle incurs 
                damage requiring the vehicle to be titled as a salvage 
                vehicle or nonrepairable vehicle, the lessor shall 
                apply for a salvage title or nonrepairable vehicle 
                certificate within 21 days after being notified by the 
                lessee that the vehicle has been so damaged, except 
                when an insurance company, pursuant to a damage 
                settlement, acquires ownership of the vehicle. The 
                lessee of such vehicle shall inform the lessor that the 
                leased vehicle has been so damaged within 30 days after 
                the occurrence of the damage.
                  ``(E) Any person acquiring ownership of a damaged 
                passenger motor vehicle that meets the definition of a 
                salvage or nonrepairable vehicle for which a salvage 
                title or nonrepairable vehicle certificate has not been 
                issued, shall apply for a salvage title or 
                nonrepairable vehicle certificate, whichever is 
                applicable. This application shall be made before the 
                vehicle is further transferred, but in any event, 
                within 30 days after ownership is acquired. The 
                requirements of this subparagraph shall not apply to 
                any scrap metal processor which acquires a passenger 
                motor vehicle for the sole purpose of processing it 
                into prepared grades of scrap and which so processes 
                such vehicle.
                  ``(F) State records shall note when a nonrepairable 
                vehicle certificate is issued. No State shall issue a 
                nonrepairable vehicle certificate after 2 transfers of 
                ownership.
                  ``(G) When a passenger motor vehicle has been 
                flattened, baled, or shredded, whichever comes first, 
                the title or nonrepairable vehicle certificate for the 
                vehicle shall be surrendered to the State within 30 
                days. If the second transferee on a nonrepairable 
                vehicle certificate is unequipped to flatten, bale, or 
                shred the vehicle, such transferee shall, at the time 
                of final disposal of the vehicle, use the services of a 
                professional automotive recycler or professional scrap 
                processor who is hereby authorized to flatten, bale, or 
                shred the vehicle and to effect the surrender of the 
                nonrepairable vehicle certificate to the State on 
                behalf of such second transferee. State records shall 
                be updated to indicate the destruction of such vehicle 
                and no further ownership transactions for the vehicle 
                will be permitted. If different than the State of 
                origin of the title or nonrepairable vehicle 
                certificate, the State of surrender shall notify the 
                State of origin of the surrender of the title or 
                nonrepairable vehicle certificate and of the 
                destruction of such vehicle.
                  ``(H) When a salvage title is issued, the State 
                records shall so note. No State shall permit the 
                retitling for registration purposes or issuance of a 
                rebuilt salvage title for a passenger motor vehicle 
                with a salvage title without a certificate of 
                inspection, which complies with the security and 
                guideline standards established by the Secretary 
                pursuant to paragraphs (3), (7), and (8), as 
                applicable, indicating that the vehicle has passed the 
                inspections required by the State. This subparagraph 
                does not preclude the issuance of a new salvage title 
                for a salvage vehicle after a transfer of ownership.
                  ``(I) After a passenger motor vehicle titled with a 
                salvage title has passed the inspections required by 
                the State, the inspection official will affix the 
                secure decal required pursuant to section 33301(4) to 
                the driver's door jamb of the vehicle and issue to the 
                owner of the vehicle a certificate indicating that the 
                passenger motor vehicle has passed the inspections 
                required by the State. The decal shall comply with the 
                permanency requirements established by the Secretary.
                  ``(J) The owner of a passenger motor vehicle titled 
                with a salvage title may obtain a rebuilt salvage title 
                or vehicle registration, or both, by presenting to the 
                State the salvage title, properly assigned, if 
                applicable, along with the certificate that the vehicle 
                has passed the inspections required by the State. With 
                such proper documentation and upon request, a rebuilt 
                salvage title or registration, or both, shall be issued 
                to the owner. When a rebuilt salvage title is issued, 
                the State records shall so note.
          ``(11) A seller of a passenger motor vehicle that becomes a 
        salvage vehicle due to damage by flood shall, at or prior to 
        the time of transfer of ownership, give the buyer a written 
        notice that the vehicle has been damaged by flood.
          ``(12) In the case of a leased passenger motor vehicle, the 
        lessee, within 15 days of the occurrence of the event that 
        caused the vehicle to become a salvage vehicle due to damage by 
        flood, shall give the lessor written disclosure that the 
        vehicle is a salvage vehicle due to damage by flood.
          ``(13) Ownership of a passenger motor vehicle may be 
        transferred on a salvage title, however, a passenger motor 
        vehicle for which a salvage title has beenissued shall not be 
registered for use on the roads or highways unless it has been issued a 
rebuilt salvage title.
          ``(14) Ownership of a passenger motor vehicle may be 
        transferred on a rebuilt salvage title, and a passenger motor 
        vehicle for which a rebuilt salvage title has been issued may 
        be registered for use on the roads and highways.
          ``(15) Ownership of a passenger motor vehicle may only be 
        transferred 2 times on a nonrepairable vehicle certificate. A 
        passenger motor vehicle for which a nonrepairable vehicle 
        certificate has been issued can never be titled or registered 
        for use on roads or highways.

``Sec. 33303. Disclosure and label requirements on transfer of rebuilt 
                    salvage vehicles

  ``(a) Written Disclosure Requirements.--
          ``(1) General rule.--Under regulations prescribed by the 
        Secretary of Transportation, a person transferring ownership of 
        a rebuilt salvage vehicle shall give the transferee a written 
        disclosure that the vehicle is a rebuilt salvage vehicle when 
        such person has actual knowledge of the status of such vehicle.
          ``(2) False statement.--A person making a written disclosure 
        required by a regulation prescribed under paragraph (1) of this 
        subsection may not make a false statement in the disclosure.
          ``(3) Completeness.--A person acquiring a rebuilt salvage 
        vehicle for resale may accept a disclosure under paragraph (1) 
        only if it is complete.
          ``(4) Regulations.--The regulations prescribed by the 
        Secretary shall provide the way in which information is 
        disclosed and retained under paragraph (1).
  ``(b) Label Requirements.--
          ``(1) In general.--The Secretary shall by regulation require 
        that a label be affixed to the windshield or window of a 
        rebuilt salvage vehicle before its first sale at retail 
        containing such information regarding that vehicle as the 
        Secretary may require. The label shall be affixed by the 
        individual who conducts the applicable State antitheft 
        inspection in a participating State.
          ``(2) Removal, alteration, or illegibility of required 
        label.--No person shall willfully remove, alter, or render 
        illegible any label required by paragraph (1) affixed to a 
        rebuilt salvage vehicle before the vehicle is delivered to the 
        actual custody and possession of the first retail purchaser.

``Sec. 33304. Report on funding

  ``The Secretary shall, contemporaneously with the issuance of a final 
rule pursuant to section 33302(b), report to appropriate committees of 
Congress whether the costs to the States of compliance with such rule 
can be met by user fees for issuance of titles, issuance of 
registrations, issuance of duplicate titles, inspection of rebuilt 
vehicles, or for the State services, or by earmarking any moneys 
collected through law enforcement action to enforce requirements 
established by such rule.

``Sec. 33305. Petitions for extensions of time

  ``The Secretary may grant a State, for good cause shown, an extension 
of time to comply with the requirements established in section 
33302(a). No such extension shall remain in effect on or after the 
compliance date established pursuant to section 33302(b).

``Sec. 33306. Effect on State law

  ``(a) In General.--Effective on the date the rule promulgated 
pursuant to section 33302 becomes effective, the provisions of this 
chapter shall preempt all State laws in States participating in the 
National Motor Vehicle Title Information System established under 
chapter 305 of subtitle VI of this title, to the extent they are 
inconsistent with the provisions of this chapter or the rule 
promulgated pursuant to section 33302, which--
          ``(1) set forth the form of the passenger motor vehicle 
        title;
          ``(2) define, in connection with a passenger motor vehicle 
        (but not in connection with a passenger motor vehicle part or 
        part assembly separate from a passenger motor vehicle), any 
        term defined in section 33301 or the terms `salvage', `junk', 
        `reconstructed', `nonrepairable', `unrebuildable', `scrap', 
        `parts only', `rebuilt', `flood', or any other symbol or word 
        of like kind, or apply any of those terms to any passenger 
        motor vehicle (but not to a passenger motor vehicle part or 
        part assembly separate from a passenger motor vehicle); or
          ``(3) set forth titling, recordkeeping, anti-theft 
        inspection, or control procedures in connection with any 
        salvage vehicle, rebuilt salvage vehicle, or nonrepairable 
        vehicle.
The requirements described in paragraph (3) shall not be construed to 
affect any State consumer law actions that may be available to 
residents of the State for violations of this chapter.
  ``(b) Construction.--Additional disclosures of a passenger motor 
vehicle's title status or history, in addition to the terms defined in 
section 33301, shall not be deemed inconsistent with the provisions of 
this chapter. Such disclosures shall include disclosures made on a 
certificate of title. When used in connection with a passenger motor 
vehicle (but not in connection with a passenger motor vehicle part or 
part assembly separate from a passenger motor vehicle), any definition 
of a term defined in section 33301 which is different than the 
definition in that section or any use of any term listed in subsection 
(a), but not defined in section 33301, shall be deemed inconsistent 
with the provisions of this chapter. Nothing in this chapter shall 
preclude a State from disclosing on a rebuilt salvage title that a 
rebuilt salvage vehicle has passed a State safety inspection which 
differed from the nationally uniform criteria to be promulgated 
pursuant to section 33302(b)(8).

``Sec. 33307. Civil and criminal penalties

  ``(a) Prohibited Acts.--It shall be unlawful for any person knowingly 
and willfully to--
          ``(1) make or cause to be made any false statement on an 
        application for a title (or duplicate title) for a passenger 
        motor vehicle or any disclosure made pursuant to section 33303;
          ``(2) fail to apply for a salvage title when such an 
        application is required;
          ``(3) alter, forge, or counterfeit a certificate of title (or 
        an assignment thereof), a nonrepairable vehicle certificate, a 
        certificate verifying an anti-theft inspection or an anti-theft 
        and safety inspection, a decal affixed to a passenger motor 
        vehicle pursuant to section 33302(b)(10)(I), or any disclosure 
        made pursuant to section 33303;
          ``(4) falsify the results of, or provide false information in 
        the course of, an inspection conducted pursuant to section 
        33302(b)(7) or (8);
          ``(5) offer to sell any salvage vehicle or nonrepairable 
        vehicle as a rebuilt salvage vehicle;
          ``(6) fail to make any disclosure required by section 33303, 
        except when the person lacks actual knowledge of the status of 
        the rebuilt salvage vehicle;
          ``(7) violate a regulation prescribed under this chapter; or
          ``(8) conspire to commit any of the acts enumerated in 
        paragraphs (1), (2), (3), (4), (5), (6), or (7).
  ``(b) Civil Penalty.--Any person who commits an unlawful act as 
provided in subsection (a) of this section shall be fined a civil 
penalty of up to $2,000 per offense. A separate violation occurs for 
each passenger motor vehicle involved in the violation.
  ``(c) Criminal Penalty.--Any person who commits an unlawful act as 
provided in subsection (a) of this section shall be fined up to $50,000 
or sentenced to up to 3 years imprisonment or both, per offense.

``Sec. 33308. Actions by States

  ``(a) In General.--Whenever an attorney general of any State has 
reason to believe that the interests of the residents of that State 
have been or are being threatened or adversely affected because any 
person has violated or is violating section 33302 or 33303, the State, 
as parens patriae, may bring a civil action on behalf of its residents 
in an appropriate district court of the United States or the 
appropriate State court to enjoin such violation or to enforce the 
civil penalties under section 33307 or may enforce the criminal 
penalties under section 33307.
  ``(b) Notice.--The State shall serve prior written notice of any 
civil or criminal action under subsection (a) or (e)(2) upon the 
Attorney General and provide the Attorney General with a copy of its 
complaint, except that if it is not feasible for the State to provide 
such prior notice, the State shall serve such notice immediately upon 
instituting such action. Upon receiving a notice respecting a civil or 
criminal action, the Attorney General shall have the right--
          ``(1) to intervene in such action;
          ``(2) upon so intervening, to be heard on all matters arising 
        therein; and
          ``(3) to file petitions for appeal.
  ``(c) Construction.--For purposes of bringing any civil or criminal 
action under subsection (a), nothing in this Act shall prevent an 
attorney general from exercising the powers conferred on the attorney 
general by the laws of such State to conduct investigations or to 
administer oaths or affirmations or to compel the attendance of 
witnesses or the production of documentary and other evidence.
  ``(d) Venue; Service of Process.--Any civil or criminal action 
brought under subsection (a) in a district court of the United States 
may be brought in the district in which the defendant is found, is an 
inhabitant, or transacts business or wherever venue is proper under 
section 1391 of title 28, United States Code. Process in such an action 
may be served in any district in which the defendant is an inhabitant 
or in which the defendant may be found.
  ``(e) Actions by State Officials.--
          ``(1) Nothing contained in this section shall prohibit an 
        attorney general of a State or other authorized State official 
        from proceeding in State court on the basis of an alleged 
        violation of any civil or criminal statute of such State.
          ``(2) In addition to actions brought by an attorney general 
        of a State under subsection (a), such an action may be brought 
        by officers of such State who are authorized by the State to 
        bring actions in such State on behalf of its residents.''.
  (b) Conforming Amendment.--The table of chapters for part C at the 
beginning of subtitle VI of title 49, United States Code, is amended by 
inserting at the end the following new item:

  333.  AUTOMOBILE SAFETY AND TITLE DISCLOSURE REQUIREMENTS       33301

SEC. 3. AMENDMENTS TO CHAPTER 305.

  (a) Definitions.--
          (1) Amend section 30501(4) of title 49, United States Code, 
        to read as follows:
          ``(4) `nonrepairable vehicle', `salvage vehicle', and 
        `rebuilt salvage vehicle' shall have the same meanings given 
        those terms in section 33301 of this title.''.
          (2) Strike paragraph (7) of section 30501 of title 49, United 
        States Code, and renumber the succeeding sections accordingly.
  (b) National Motor Vehicle Title Information System.--
          (1) Amend section 30502(d)(3) of title 49, United States 
        Code, to read as follows:
          ``(3) whether an automobile known to be titled in a 
        particular State is or has been a nonrepairable vehicle, a 
        rebuilt salvage vehicle, or a salvage vehicle;''.
          (2) Amend section 30502(d)(5) of title 49, United States 
        Code, to read as follows:
          ``(5) whether an automobile bearing a known vehicle 
        identification number has been reported as a nonrepairable 
        vehicle, a rebuilt salvage vehicle, or a salvage vehicle under 
        section 30504 of this title.''.
  (c) State Participation.--Amend section 30503 of title 49, United 
States Code, to read as follows:

``Sec. 30503. State participation

  ``(a) State Participation.--No State may participate in the National 
Motor Vehicle Title Information System established under section 30502 
of this title unless such State complies with the requirements of 
chapter 333 of this subtitle and the rule promulgated pursuant to 
section 33302 of this title.
  ``(b) State Information.--Each participating State shall make titling 
information maintained by that State available for use in operating the 
National Motor Vehicle Title Information System established or 
designated under section 30502 of this title.
  ``(c) Verification Checks.--Each participating State shall establish 
a practice of performing an instant title verification check before 
issuing a certificate of title to an individual or entity claiming to 
have purchased an automobile from an individual or entity in another 
State. The check shall consist of--
          ``(1) communicating to the operator--
                  ``(A) the vehicle identification number of the 
                automobile for which the certificate of title is 
                sought;
                  ``(B) the name of the State that issued the most 
                recent certificate of title for the automobile; and
                  ``(C) the name of the individual or entity to whom 
                the certificate of title was issued; and
          ``(2) giving the operator an opportunity to communicate to 
        the participating State the results of a search of the 
        information.
  ``(d) Grants to States.--
          ``(1) In cooperation with the States and not later than 
        January 1, 1994, the Attorney General shall--
                  ``(A) conduct a review of systems used by the States 
                to compile and maintain information about the titling 
                of automobiles; and
                  ``(B) determine for each State the cost of making 
                titling information maintained by that State available 
                to the operator to meet the requirements of section 
                30502(d) of this title.
          ``(2) The Attorney General may make reasonable and necessary 
        grants to participating States to be used in making titling 
        information maintained by those States available to the 
        operator.
  ``(e) Report to Congress.--Not later than October 1, 1998, the 
Attorney General shall report to Congress on which States have met the 
requirements of this section. If a State has not met the requirements, 
the Attorney General shall describe the impediments that have resulted 
in the State's failure to meet the requirements.''.
  (d) Reporting Requirements.--Section 30504 of title 49, United States 
Code, is amended by striking ``junk automobiles or salvage 
automobiles'' every place it appears and inserting ``nonrepairable 
vehicles, rebuilt salvage vehicles, or salvage vehicles''.

                          Purpose and Summary

    The legislation will reduce motor vehicle titling fraud and 
improve consumer protection by establishing nationally uniform 
definitions and procedures for the titling, registration, and 
transfer of salvage, rebuilt salvage, and nonrepairable 
vehicles. H.R. 1839 conditions a State's participation in the 
National Motor Vehicle Title Information System (NMVTIS), a 
Federal computer system designed to assist States in locating 
information about automobile titling documents issued by other 
States, on a State's adoption of uniform definitions and 
procedures for the titling and registration of salvage, 
nonrepairable, and rebuilt automobiles. By participating in the 
NMVTIS, the State adopts the uniform definitions of salvage 
vehicle, nonrepairable vehicle, rebuilt salvage vehicle, and 
other terms, as well as procedures for issuing those titling 
documents.

                  Background and Need for Legislation

    Automobile theft and fraud continue to be problems for law 
enforcement, dealers, insurers, and others associated with the 
sale, service, and regulation of automobiles. However, first 
and foremost, automobile theft and fraud are problems for 
consumers. Consumers are hurt not just through the immediate 
loss of their means of transportation through theft, but 
through higher insurance premiums, registration fees, and the 
danger of not knowing whether a used vehicle may have once been 
totaled in an accident.
    Frequently, motor vehicles suffer major damage in 
accidents. Those motor vehicles are rebuilt and resold to 
consumers. States vary in how they define the amount of damage 
that must be sustained before a motor vehicle will be 
considered salvage. Once it is determined that a motor vehicle 
has been damaged enough to be considered a salvage vehicle, 
States vary on how the title for that motor vehicle should 
reflect this fact.
    As a result of the differing State laws, two problems have 
developed. First, the Committee heard testimony that consumers 
are unknowingly purchasing rebuilt wrecks and they are 
overpaying for motor vehicles that may not be safe and that may 
require extensive repairs. Second, critics have charged that 
under current conditions, thieves have every incentive to steal 
motor vehicles. Some thieves steal motor vehicles and easily 
obtain duplicate titles and new vehicle identification numbers 
(``VINs''), a process known as title washing. Other thieves 
prefer to strip the stolen motor vehicle and sell the parts. In 
both scenarios, consumers face increasing possibilities that 
their motor vehicles will be stolen and States exacerbate the 
problem through their lack of uniform titling and registration 
procedures.
    Among the provisions added to the Anti-Car Theft Act of 
1992 (P.L. 102-519) by the Committee on Energy and Commerce was 
a provision which mandated that a Motor Vehicle Titling, 
Registration and Salvage Advisory Committee (``Salvage 
Committee'') be developed to study the motor vehicle issue. 
That advisory committee was comprised of members from a wide 
range of backgrounds including Federal transportation 
officials; Federal, State, and local law enforcement officials; 
State motor vehicle officials; motor vehicle manufacturers, 
dealers, and recyclers; salvage yard operators and scrap 
processors; insurers; and others. On February 10, 1994, the 
Salvage Committee issued its recommendations.
    The Salvage Committee concluded that Federal legislation is 
necessary to rectify the problems caused by the lack of 
uniformity in State laws and made eight recommendations. Among 
the recommendations of the Salvage Committee were 
recommendations that there be nationally uniform definitions of 
titling terms, that the title and body of a salvage motor 
vehicle carry a brand, that the vehicle identification numbers 
of destroyed motor vehicles be recorded into a national data 
base, that rebuilt salvage vehicles be inspected, and that all 
exporters of motor vehicles be required to show proof of 
ownership.
    The first time in which the Committee examined the issue of 
nationally uniform titling of salvage vehicles after the 
Salvage Committee issued its report was during the 103rd 
Congress, when the Subcommittee on Commerce, Consumer 
Protection, and Competitiveness held a hearing on H.R. 3713, 
the Salvage Vehicle Title Reform and Highway Safety Act, on 
September 21, 1994 (Serial No. 103-158). While no action was 
taken on H.R. 3713, Representative White introduced H.R. 2900, 
the National Motor Vehicle Safety, Anti-Theft, Title Reform, 
and Consumer Protection Act, during the 104th Congress. H.R. 
2900 was written to implement many of the recommendations of 
the Salvage Committee, and was the subject of a hearing held by 
the Subcommittee on Commerce, Trade, and Hazardous Materials on 
September 12, 1996 (Serial No. 104-112).
    While there was widespread support from State motor vehicle 
administrators, automobile dealers, salvage yard operators, and 
others for a bill which imposed nationally uniform definitions 
and procedures for the registration of salvage, nonrepairable, 
and rebuilt salvage vehicles, that hearing served to identify 
several issues which required further discussion. They included 
the definitions of salvage vehicle and nonrepairable vehicle, 
and the constitutionality of the approach taken by the 
legislation in the wake of several recent Supreme Court 
decisions. The Committee deliberated these issues extensively 
during its consideration of the legislation.
    Perhaps no issue was as difficult to resolve as defining 
the term salvage vehicle. On one side, consumer advocates and 
others sought a low, percentage-based threshold so that 
consumers could benefit from having the maximum amount of 
information about a vehicle's damage history as possible. On 
the other side, insurers wanted a definition which balanced the 
vehicle's fair market value and its salvage value against the 
cost of repairs before branding it as a salvage vehicle. 
Although the Salvage Committee was not unified in its position, 
a majority of the members voted to recommend a 75 percent 
damage threshold before a vehicle would be branded as salvage.
    The Committee believes that the definition eventually 
adopted by the Committee--damage occurring no more than 6 model 
years after the model year of the vehicle (unless the vehicle 
had a retail value in excess of $7,500) and exceeding 80 
percent of its retail value--represents a fair balance between 
the need to disclose information to consumers about major 
damage and the consequences of covering vehicles which could be 
branded as salvage with little or no damage.
    While the Committee recognized that under ideal 
circumstances, it would be preferable to cover all vehicles 
regardless of value or age, it also recognized that cars 
depreciate significantly over time, while the cost of repairs 
remains relatively constant. The effect of branding a vehicle 
as a salvage vehicle or a rebuilt salvage vehicle is to 
depreciate its value even further. The net result of expanding 
the definition to include older vehicles is to increase the 
likelihood of a low-value vehicle being branded as a salvage 
vehicle solely because of cosmetic damage or damage otherwise 
irrelevant to the safety of the vehicle. As the size of the 
fleet of vehicles with air bags increases, this problem will 
become even more pronounced.
    The problem presented to the consumer by a salvage brand is 
two-fold. First, there is the very real consideration that when 
a vehicle is not insured against collision losses, as is the 
case with many low-value vehicles, a rebuilt or salvage brand 
significantly diminishes the owner's equity in that vehicle. 
The consequence to the owner is that he or she then has a 
vehicle worth significantly less than before the damage, 
meaning that the ability to purchasenew, more reliable 
transportation is equally diminished. This is an important 
consideration, particularly for low-income people whose single major 
asset may be a vehicle.
    Second, the effect on automobile insurance premiums cannot 
be ignored. In the majority of cases where an insured's vehicle 
will be branded as salvage or rebuilt salvage, the insured will 
demand that the insurer declare the vehicle a total loss and 
pay him or her for the pre-accident value of the vehicle. If 
the insurer hopes to retain that customer in the future, they 
have little choice but to accede to that customer's wishes. 
That means that insurers would be forced to total more vehicles 
than they do currently, the cost of which will be passed on to 
all insureds.
    In order to address the concerns of some Committee Members, 
the Committee lowered the threshold for a high-value vehicle 
from $10,000 to $7,500 in order to ensure that more high-value 
vehicles were covered by the legislation. While recognizing 
that it is not a perfect solution, the Committee believes that 
the overall consumer benefits derived from the legislation 
outweigh the marginal difficulties presented by this particular 
definition.
    Another major issue which confronted the Committee was 
whether or not to change the definition of a ``nonrepairable 
vehicle'' from the definition in the legislation--the 
definition recommended by the Salvage Committee--to one which 
utilized a percentage threshold, much like the definition of 
salvage vehicle. Advocates of this position felt that a 
percentage-based definition of nonrepairable would reduce the 
opportunity for automobile thieves to transfer VINs from badly 
damaged vehicles to stolen vehicles and would improve 
automobile safety by removing badly damaged vehicles from 
service. Opponents pointed out that in the small minority of 
States which have adopted similar definitions for nonrepairable 
vehicles, automobile theft has either gone up or fell at a 
significantly slower rate than the national average. Further, 
under a percentage-based definition, consumers face a problem 
similar to that faced under an expanded definition of salvage 
vehicle--lower-value vehicles could meet the definition with 
relatively small amounts of damage. In the case of a 
nonrepairable vehicle, however, the consequence for the 
consumer is even more drastic than having a vehicle branded as 
salvage: instead of owning a vehicle significantly depreciated 
in value, the consumer faces the prospect of having the vehicle 
removed from the roadways altogether.
    Given the prospect of an uncertain benefit and the 
possibility of a drastic side-effect, the Committee chose not 
to subject the nation's consumers to this standard used in a 
small minority of States. Some of the States currently using 
that particular approach asked that the Committee 
``grandfather'' their existing statutes. While States have the 
option of not subjecting themselves to the legislation's 
salvage regime by choosing not to participate in the National 
Motor Vehicle Title Information System, permitting individual 
States to have definitions different than those in the 
legislation would defeat the purpose of the bill and undermine 
the Salvage Committee's single biggest recommendation--
nationally uniform definitions. Thus, the Committee believed 
that the benefits from national uniformity outweighed the 
arguable benefit enjoyed by any one of a minority of States 
using a percentage-based definition of a nonrepairable vehicle.
    Many Members of the Committee were concerned about H.R. 
1839 s failure to require mandatory safety inspections for 
rebuilt salvage vehicles according to nationally uniform 
inspection criteria. While a mandatory safety inspection was 
not included due to concerns about the possibility of imposing 
an unfunded mandate on the States, the Committee notes that, as 
a matter of policy, it believes that rebuilt salvage vehicles 
should be subject to a safety inspection prior to being 
registered for use and encourages States to adopt safety 
inspection programs for those vehicles.
    The final issue which needed to be addressed by the 
Committee was the legislation's constitutionality in light of 
several recent decisions by the Supreme Court. H.R. 1839, as 
introduced, mandated that States adopt the legislation's 
uniform definitions and procedures for salvage, nonrepairable, 
and rebuilt salvage vehicles. The Committee was advised in an 
October 18, 1996, memorandum from the Congressional Research 
Service's (CRS's) American Law Division that such an approach 
``may be subject to challenge as the kind of imposition upon 
States disapproved by the Supreme Court in New York v. United 
States [505 U.S. 144 (1992)].'' Given the CRS opinion and the 
Court's recent ruling in Printz v. United States, 1997 U.S. 
Lexis 4044 (1997) (overturning key provisions of the ``Brady 
Bill'' and upholding New York), the Committee was forced to 
look for another approach that would be consistent with the 
Court's holding in New York.
    The basic premise of New York is that Congress cannot force 
the States, through their own legislatures and officials, to 
execute programs properly administered by the Federal 
government through its authority to regulate interstate 
commerce. The only way that the Federal government could 
constitutionally enlist a State to administer a Federal program 
is through the use of incentives, which, under New York, may 
take any number of different forms. When the Court in New York 
upheld so-called ``access incentives'' as being constitutional, 
it endorsed the option of giving States the choice of 
regulating according to Federal standards or denying them 
access to Federal benefits.
    The amendments adopted by the Committee are structured in 
the same fashion as the incentives upheld in New York. In order 
to address the Court's opinion, the legislation simply 
conditions participation in a Federal computer database 
designed to track motor vehicle titling information, the 
NMVTIS, on the State's acceptance of the uniform titling 
procedures and definitions. NMVTIS is a wholly Federal 
creation: it is administered under the supervision of the 
United States Department of Justice in consultation with the 
Department of Transportation, and, although it is operated with 
the assistance of the States, its fundamental purpose is to 
regulate interstate commerce. The Department of Transportation, 
in correspondence with the Committee, argued that nationally 
uniform definitions were necessary in order for the NMVTIS to 
function (See H. Rpt. 104-618).
    Given the significant benefit to consumers, law enforcement 
officials, automobile dealers and others, the Committee hopes 
that States find those benefits and the opportunity to 
participate in the NMVTIS a sufficient incentive to accept the 
uniform definitions and procedures put in place by the 
legislation.

                                Hearings

    The Subcommittee on Telecommunications, Trade, and Consumer 
Protection held a hearing on H.R. 1839 on June 26, 1997. The 
Subcommittee received testimony from the following witnesses: 
Mr. Richard C. Morse, representing the National Highway Traffic 
Safety Administration; Mr. Larry Greenberg, representing the 
American Association of Motor Vehicle Administrators; Mr. 
Richard Strauss, representing the National Automobile Dealers 
Association; Ms. Peg Echols, representing the State Farm 
Insurance Companies; Ms. Marcia McCallister, representing the 
American Salvage Pool Association; Mr. Bernard Brown, 
representing the Consumer Federation of America; and Mr. Bill 
Brauch, representing the National Association of Attorneys 
General.

                        Committee Consideration

    On July 16, 1997, the Subcommittee on Telecommunications, 
Trade, and Consumer Protection met in an open markup session 
and approved H.R. 1839 for Full Committee consideration, 
amended, by a voice vote. On July 23, 1997, the Committee on 
Commerce met in an open markup session and ordered H.R. 1839 
reported to the House, amended, by a voice vote.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 1839 
reported or in adopting the amendment. An en bloc amendment 
offered by Mr. White to make technical and clarifying changes 
and to condition participation in the National Motor Vehicle 
Title Information System on compliance with the bill was 
adopted by a voice vote. A motion by Mr. Bliley to order H.R. 
1839 reported to the House, amended, was agreed to by a voice 
vote, a quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Committee held a legislative 
hearing and made findings that are reflected in this report.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

               New Budget Authority and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives, the Committee finds that 
H.R 1839, the National Salvage Motor Vehicle Consumer 
Protection Act of 1997, would result in no new or increased 
budget authority or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 403 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 403 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, August 8, 1997.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1839, the National 
Salvage Motor Vehicle Consumer Protection Act of 1997.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kristen 
Layman (for federal costs); Karen McVey (for the state and 
local impact); and Lesley Frymier (for the private-sector 
impact).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 1839--National Salvage Motor Vehicle Consumer Protection Act of 
        1997

    Summary: Assuming appropriation of the necessary amounts, 
CBO estimates that enacting H.R. 1839 would result in 
additional discretionary spending of approximately $700,000 by 
the Department of Transportation (DOT) over the next five 
fiscal years. We also estimate discretionary savings of 
approximately $15 million in spending by the Department of 
Justice (DOJ), assuming that full funding for the National 
Motor Vehicle Title Information System (NMVTIS) would otherwise 
have been appropriated from 1998 through 2002.
    The legislation could affect direct spending and receipts; 
therefore, pay-as-you-go procedures would apply. CBO estimates 
that any such effects would be insignificant. H.R. 1839 
contains a private-sector mandate as defined in the Unfunded 
Mandates Reform Act of 1995 (UMRA). The final committee version 
of H.R. 1839, incorporating the technical amendments made after 
July 23, 1997, contains no intergovernmental mandates as 
defined in UMRA. It would, however, place additional 
requirements on states that choose to participate in NMVTIS.
    Description of the bill's major provisions: H.R. 1839 would 
establish uniform national standards for titling and 
registering salvage, nonrepairable, and rebuilt vehicles. For 
states that choose to participate in NMVTIS, the bill lists 
information that must be included on a vehicle title in 
addition to procedures that must be followed to minimize the 
opportunity for fraud. NMVTIS is an information network that 
will seek to provide all participants with instant and reliable 
access to information maintained by the states related to 
automobile titling.
    The legislation would require that all rebuilt salvage 
vehicles pass a state anti-theft inspection, and lists 
procedures that should be included in an anti-theft inspection. 
For those states that choose to require a safety inspection of 
rebuilt salvage vehicles, H.R. 1839 would direct the Secretary 
of Transportation to establish nationally uniform safety 
inspection criteria. The legislation would establish civil and 
criminal penalties for individuals who knowingly provide false 
information on disclosures made pursuant to its provisions, or 
who violate its vehicle titling and disclosure requirements.
    H.R. 1839 stipulates that no state may participate in 
NMVTIS unless it complies with the uniform titling standards in 
the bill and standards detailed in chapter 305 of Title 49 of 
the U.S. Code. The legislation would permit the Attorney 
General to make reasonable and necessary grants to 
participating states to assist the state in becoming part of 
NMVTIS.
    Estimated cost to the Federal Government: CBO estimates 
that implementing H.R. 1839 would affect discretionary spending 
by both the Department of Transportation and the Department of 
Justice. The Anti-Car Theft Improvements Act of 1995 (Public 
Law 104-152) transferred federal authority over the title 
information system from the Secretary of Transportation to the 
Attorney General. The Secretary of Transportation retains 
responsibility for the formulation and monitoring of federal 
regulations that establish uniform safety and titling criteria.

DOT Spending subject to appropriation

    CBO estimates that DOD would spend approximately $700,000 
over the 1998-2002 period to implement H.R. 1839, assuming the 
availability of appropriated funds.
    DOT expects to contact out the task of writing a rule that 
specifies uniform safety provisions for states that choose to 
require safety inspections. The total cost of writing such a 
rule would be approximately $75,000, and it would cost 
approximately $250,000 to determine whether user fees would 
cover state costs of developing uniform safety and titling 
provisions. This includes the cost of surveying each state and 
formulating a report to be presented to appropriate committees 
of the Congress. In addition, DOT estimates that it will need 
to hire one full-time employee to review safety and titling 
programs of individual states. The new position would likely be 
at the GS-15 level, resulting in costs for compensation and 
expenses totaling about $350,000 over the 1998-2002 period. The 
only requirements this legislation would impose on DOT are 
likely to have negligible costs.

DOJ spending subject to appropriation

    DOJ is responsible for administering and funding NMVTIS, 
and CBO expects that enactment of H.R. 1839 would reduce the 
department's costs for establishing the system. Under current 
law, CBO expects that all states would participate in NMVTIS. 
Based on information from the American Association of Motor 
Vehicle Administrators, we anticipate that this effort would 
require federal grants of about $300,000 per titling 
jurisdiction (the 50 states and Washington, D.C.) and $6 
million for network development and staff coordination 
expenses, for a total cost of $21 million over the next five 
years.
    If H.R. 1839 is enacted, states would have to comply with 
uniform titling provisions to be eligible for federal grants. 
CBO expects that stricter titling standards would cause state 
participation in NMVTIS to fall well short of 100 percent. 
Instead, we expect that under the bill, only about a quarter of 
the states would choose to participate in NMVTIS. As a result, 
fewer grants to states would be made under H.R. 1839. CBO 
estimates that implementing the bill would result in a net 
savings to DOJ of approximately $15 million over the 1998-2002 
period, assuming that necessary funds would otherwise have been 
appropriated.

Direct spending and revenues

    Imposing the new civil and criminal fines specified by H.R. 
1839 could cause an increase in government receipts, but CBO 
estimates that any such increase would likely be less than 
$500,000 annually. Criminal fines are deposited in the Crime 
Victims Fund and spent in the following year. Thus, any 
increase in revenues from criminal fines would be matched by an 
increase in direct spending, with a one-year lag.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act of 1985 specifies pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts through 2007. Imposing the new civil and criminal 
fines contained in H.R. 1839 could result in an increase in 
both governmental receipts and direct spending, but CBO 
estimates that any such changes would be less than $500,000 a 
year.
    Estimated impact on State, local, and tribal governments: 
H.R. 1839, as ordered reported with subsequent technical 
amendments, contains no intergovernmental mandates as defined 
in UMRA. It would, however, place additional requirements on 
states that choose to participate in NMVTIS. A state choosing 
to participate in the system would face additional costs if its 
existing regulations and procedures for salvage and rebuilt 
vehicles differ from the federal standards. CBO expects that, 
because of the stringency of conditions established by the 
bill, only about a quarter of the states would choose to 
participate in NMVTIS and thus would have to comply with the 
new requirements for regulating federal salvage and rebuilt 
vehicles. Based on information from state, federal, and 
industry representatives, CBO estimates that compliance costs 
would total no more than $10 million to $20 million per year.
    Every state has different procedures currently in place for 
regulating salvage and rebuilt vehicles and each would face 
different costs depending on the extent to which it needed to 
modify its system to conform to the federal standards. For some 
states, the changes would be mostly administrative and would 
involve activities such as modifying the position of 
information on vehicle titles, printing new forms, and adopting 
and notifying people of changes to definitions and procedures 
for handling titles. These states would face modest one-time 
costs to bring their regulations and procedures into 
conformance. Costs in states that need to establish new 
procedures or systems would be higher and would include both 
these one-time costs and new annual operating expenses. For 
example, many states do not issue titles to nonrepairable, or 
junk, vehicles and would have to begin doing so to be eligible 
to participate in NMVTIS. Some states would have to expand 
their anti-theft inspection programs to meet the new 
requirement. Costs in these states could reach into the 
millions of dollars, and it is unclear whether states would be 
able to use the grant money available to them for NMVTIS to 
help offset these costs.
    Estimated impact on the private sector: H.R. 1839 would 
impose a new federal private-sector mandate on sellers of 
rebuilt salvage vehicles and would change an existing mandate 
on junk yard operators, salvage yard operators, and insurance 
carriers. The bill also would impose new requirements of the 
private sector in states choosing to participate in the NMVTIS. 
Based on information provided by government and industry 
sources, CBO estimates that the direct costs of these private-
sector mandates would not exceed the annual threshold ($100 
million in 1996, adjusted annually for inflation) established 
in UMRA in any year over the next five years.
    H.R. 1839 would require persons transferring ownership of 
rebuilt salvage vehicles to give the transfer a written 
disclosure that the vehicle is a rebuilt salvage vehicle, when 
such person has actual knowledge of the status of the vehicle. 
CBO estimates that the costs of this new mandate would be 
minimal.
    H.R. 1839 would modify an existing mandate on junk yard 
operators, salvage yard operators, and insurance carriers. 
Under current law, these entities are required to include an 
inventory of junk and salvage automobiles in their monthly 
reports to the operator of the NMVTIS. Under H.R. 1839, they 
would be required to include an inventory of salvage, 
nonrepairable, and rebuilt salvage vehicles in their reports. 
Based on information provided by the private sector, CBO 
estimates that the direct costs of the new mandate would 
probably be less than the costs of the existing mandate.
    In addition, the bill outlines requirements for states that 
choose to participate in the NMVTIS. If states choose to 
participate in the program, additional mandates would be 
imposed on the private sector related to the titling and 
labeling of rebuilt salvage vehicles, the certification of 
nonrepairable vehicles, and the disclosure of damage to salvage 
vehicles. CBO estimates that the direct costs of these mandates 
also would fall well below the threshold established in UMRA.
    Estimate prepared by: Federal Costs: Kristen Layman. Impact 
on State, Local, and Tribal Governments: Karen McVey. Impact on 
the Private Sector: Lesley Frymier.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                        Committee Correspondence

                          House of Representatives,
                                Committee on the Judiciary,
                                Washington, DC, September 26, 1997.
Hon. Tom Bliley,
Chairman, Committee on Commerce, House of Representatives, Rayburn 
        House Office Building, Washington, DC.
    Dear Chairman Bliley: I write with respect to H.R. 1839, 
the ``National Salvage Motor Vehicle Consumer Protection Act of 
1997,'' which the Committee on Commerce ordered reported on 
July 23, 1997. As you know, the legislation amends portions of 
Subtitle VI of Title 49, United States Code, to establish 
nationally uniform requirements regarding the titling and 
registration of salvage, nonrepairable, and rebuilt vehicles. 
Specifically, the bill establishes uniform standards for anti-
theft inspections for rebuilt salvage vehicles, and includes 
additional provisions regarding the National Motor Vehicle 
Title Information System (NMVTIS).
    The Judiciary Committee received a joint referral on H.R. 
1839 upon introduction because several matters fall within the 
jurisdiction of this Committee pursuant to its authority under 
Rule X of the Rules of the House of Representatives. Those 
provisions include the legislation's requirement for anti-theft 
inspections for rebuilt salvage vehicles, language establishing 
criminal penalties, and language giving state officials 
authority to enforce the legislation in federal court.
    The Committee on Commerce also added amendments which 
conditioned a State's participation in NMVTIS on the adoption 
of the uniform definitions and procedures outlined in section 2 
of the legislation. As you know, NMVTIS is a national database 
of motor vehicle titling information established jointly by our 
two Committees as part of the Anti-Car Theft Act Amendments of 
1992 (P.L. 102-519) which will permit state law enforcement and 
motor vehicle officials to access important information about 
the title history of motor vehicles registered in other states. 
The Judiciary Committee was concerned that the provisions added 
by the Commerce Committee might have the unintended consequence 
of discouraging States from participating in NMVTIS and 
hampering the overall effectiveness of the system. I appreciate 
your commitment to address these concerns in a manager's 
amendment when this bill is considered by the full House.
    Due to your Committee's desire to bring this legislation 
expeditiously before the House of Representatives, and because 
of your willingness to accommodate our concerns the Committee 
on the Judiciary is willing to be discharged from further 
consideration of this bill. This action in no way alters the 
Committee on the Judiciary's jurisdiction over the provisions 
in question and the Committee will seek the appointment of 
conferees in the event of a House-Senate conference on H.R. 
1839. I would appreciate your including this letter as a part 
of your Committee's report on H.R. 1839 and as part of the 
record during consideration of this bill by the House.
    Thank you for your cooperation in this matter and I look 
forward to working with the Committee on Commerce when this 
bill reaches the House floor.
            Sincerely,
                                           Henry J. Hyde, Chairman.
                                ------                                

                          House of Representatives,
                                     Committee on Commerce,
                                Washington, DC, September 26, 1997.
Hon. Henry J. Hyde,
Chairman, House Committee on the Judiciary, Rayburn House Office 
        Building, Washington, DC.
    Dear Chairman Hyde: Thank you for your September 26, 1997, 
letter regarding H.R. 1839, the National Salvage Motor Vehicle 
Consumer Protection Act, which was ordered reported by the 
Committee on Commerce on July 23, 1997.
    Our Committees have had a long history of working together 
on automobile anti-theft and titling issues, such as those 
addressed by H.R. 1839. I appreciate your cooperation in 
working to address those issues of mutual concern and 
expediting consideration of this important legislation by the 
full House. As we have discussed, we will address those issues 
prior to the House's consideration of the legislation. Your 
letter and this response will be included as part of the 
Committee's report on H.R. 1839. Further, should this 
legislation ever be the subject of a House-Senate conference, I 
will support your request for conferees on those provisions 
within your Committee's jurisdiction.
    Thank you for your cooperation and assistance in moving 
this legislation forward. I remain,
            Sincerely,
                                              Tom Bliley, Chairman.

             Section-by-Section Analysis of the Legislation

                         SECTION 1. SHORT TITLE

    This section provides the short title of the bill, the 
``National Salvage Motor Vehicle Consumer Protection Act of 
1997.''

      SECTION 2. MOTOR VEHICLE TITLING AND DISCLOSURE REQUIREMENTS

    Subsection (a) of this section amends title 49, United 
States Code, by inserting a new chapter, chapter 333, 
``Automobile Safety and Title Disclosure Requirements'' at the 
end. Subsection (b) makes a conforming amendment to the United 
States Code. Chapter 333 is comprised of eight sections:

Section 33301--Definitions

    Section 33301 establishes several new definitions for the 
purposes of chapter 333. Paragraph (1) defines the term 
``passenger motor vehicle'' the same way as section 32101(10), 
title 49, United States Code, except, notwithstanding the 
definition of ``multipurpose passenger vehicle'' contained in 
section 32101(9), it includes a multipurpose passenger vehicle 
or a truck, other than a truck referred to in section 
32101(10)(B), when that vehicle or truck is rated by the 
manufacturer not more than 10,000 pounds gross vehicle weight 
and such vehicle is primarily manufactured for use on public 
streets, roads, and highways.
    Paragraph (2) defines the term ``salvage vehicle'' as any 
passenger motor vehicle which (A) is a late model vehicle, 
which has been wrecked, destroyed, or damaged to the extent 
that the total estimated or actual cost of repairs to rebuild 
or reconstruct that vehicle to its roadworthy condition 
immediately before it was wrecked, destroyed, or damaged 
exceeds 80 percent of the retail value of the vehicle; (B) is 
acquired by an insurance company after it was wrecked, 
destroyed, or damaged, and was acquired pursuant to a damage 
settlement (except in the case of a settlement in connection 
with a recovered stolen automobile, unless such automobile was 
damaged enough to meet the threshold in subparagraph (A)); or 
(C) is voluntarily designated by the owner as a salvage 
vehicle. Paragraph (3) defines the term ``salvage title'' as a 
passenger motor vehicle ownership document issued by a State to 
the owner of a salvage vehicle and is conspicuously labeled 
with the word ``salvage'' across the front. The Committee 
intends that vehicles that are designated by States as 
``historic'' or ``antique'' be considered salvage vehicles if 
they would otherwise meet the criteria for such a designation.
    Paragraph (4) defines the term ``rebuilt salvage vehicle'' 
as a passenger motor vehicle which was previously issued a 
salvage title, has passed a State anti-theft inspection, and 
has been issued a certificate stating so. In States which 
require safety inspections for rebuilt salvage vehicles, the 
rebuilt salvage vehicle must pass such inspection, be issued a 
certificate stating so, and have a decal stating that it is a 
``Rebuilt Salvage Vehicle--Anti-theft and Safety Inspections 
Passed.'' In States which do not require safety inspections, 
the rebuilt salvage vehicle must have a decal stating that it 
is a ``Rebuilt Salvage Vehicle--Anti-theft Inspection Passed / 
No Safety Inspection Pursuant to National Criteria.'' Paragraph 
(5) defines a ``rebuilt salvage title'' as apassenger motor 
vehicle ownership document issued to the owner of a rebuilt salvage 
vehicle and is conspicuously labeled with words indicating that it is a 
rebuilt salvage vehicle and whether or not it has passed a safety 
inspection pursuant to national criteria.
    Paragraph (6) defines the term ``nonrepairable vehicle'' as 
any passenger motor vehicle which is incapable of safe 
operation on the roads and highways and which has no resale 
value except as a source of parts or scrap, or which the owner 
irreversibly designates as a source of parts or scrap. 
Nonrepairable vehicles are issued nonrepairable vehicle 
certificates, which are defined in paragraph (7) as an 
ownership document issued by the State to the owner of a 
nonrepairable vehicle, and may never again be retitled.
    Paragraph (8) defines the term ``Secretary'' as meaning the 
Secretary of Transportation.
    Paragraphs (9) through (11) define several terms used in 
the determination of whether a vehicle is a salvage vehicle 
under paragraph (2). Paragraph (9) defines the term ``late 
model vehicle'' as any passenger motor vehicle which has a 
manufacturer s model year designation of or later than the year 
in which the vehicle was wrecked, destroyed, or damaged, or any 
of the six preceding years, or has a retail value of more than 
$7,500. The Secretary is required to adjust the retail value 
figure annually in accordance with changes in the consumer 
price index. Paragraph (10) defines the term ``retail value'' 
as the actual cash value, fair market value, or retail value of 
a passenger motor vehicle as either (A) set forth in the 
current edition of any nationally recognized compilation of 
retail values, which may include automated databases, or (B) as 
determined by conducting a market comparison of vehicles with 
like equipment and in a similar condition. Finally, paragraph 
(11) defines ``cost of repairs'' as the estimated or actual 
cost of the parts used in the repairs plus the reasonable and 
customary labor charges in the community where the repairs are 
to be performed.

Section 33302--Passenger motor vehicle titling

    The provisions of section 33302 apply to any State which 
participates in the National Motor Vehicle Title Information 
System established under chapter 305 of title 49, United States 
Code (49 U.S.C. 30501 et seq.).
    Subsection (a) requires that participating States ``carry 
forward'' any brand on a title from another State signifying 
that the vehicle was previously issued a title that bore any 
word or symbol indicating that the vehicle was ``salvage,'' 
``unrebuildable,'' ``parts only,'' ``scrap,'' ``junk,'' 
``nonrepairable,'' ``reconstructed,'' ``rebuilt,'' that it has 
been damaged by flood, or any other similar word or symbol, by 
disclosing such status on the new certificate of title. States 
are required to begin carrying forward other States brands no 
later than one year after the date of enactment.
    Subsection (b) contains the bulk of requirements for 
participating States. This subsection requires the Secretary to 
issue a rule no later than 18 months after the date of 
enactment requiring participating States apply uniform 
standards, procedures, and methods of control for the issuance 
and control of titles for motor vehicles and for information 
contained in such titles. States will have two years from the 
date on which the Secretary issues the final rule to comply. 
The rule issued by the Secretary is to have the following 
components described in paragraphs (1) through (12).
    Paragraph (1) requires the participating State to 
conspicuously indicate on the face of a title whether the 
vehicle is a salvage vehicle, a nonrepairable vehicle, or a 
rebuilt salvage vehicle and whether such vehicle was damaged by 
flood.
    Paragraph (2) requires that such information be carried 
forward by the State or any other participating State.
    Paragraph (3) requires that any titling documents, decals, 
certificates, or issuing systems used by participating States 
must meet security standards which minimize the opportunity for 
fraud.
    Paragraph (4) requires that the certificate of title issued 
by a participating State shall include the passenger motor 
vehicle make, model, body type, year, odometer disclosure, and 
vehicle identification number.
    Paragraph (5) requires that titling documents issued by the 
participating State are required to be in a uniform layout, 
either established with the participating State or an 
organization representing participating States. In issuing the 
rule required under this section, the Committee intends that 
the Secretary take necessary steps to minimize the burden on 
States in adopting titling documents with a uniform layout, 
including giving States sufficient opportunity to use any 
existing inventory of titling documents.
    Paragraph (6) requires that nonrepairable vehicles shall be 
issued nonrepairable vehicle certificates by participating 
States and shall not again be retitled.
    Paragraph (7) stipulates that a salvage vehicle may not be 
issued a rebuilt salvage title by a participating State unless, 
after it is repaired or rebuilt, it complies with the 
requirements for a rebuilt salvage vehicle pursuant to section 
33301(4). Any State inspection program for rebuilt salvage 
vehicles shall, subject to continuing review by and approval of 
the Secretary, include: (A) a requirement that the owner of a 
passenger motor vehicle submitting the vehicle for an anti-
theft inspection provide documentation identifying the 
vehicle's damage prior to being repaired, a list of replacement 
parts used, and proof of ownership of such parts; and (B) a 
requirement to conduct a thorough inspection of parts required 
to be marked under section 33102 for signs that such part has 
been illegally altered, defaced, or falsified. The owner shall 
affirm that all information is complete, true, and that no 
stolen parts were used to rebuild the vehicle. Any part found 
to be illegally altered, defaced, or falsified and that cannot 
be identified as having been legally obtained shall be 
contraband and subject to seizure. The Secretary is required, 
in consultation with the Attorney General, to establish 
procedures for dealing with parts with a mark or vehicle 
identification number normally removed during industry accepted 
rebuilding or remanufacturing practices and which parts, if 
they bear a mark indicating that they were rebuilt or 
remanufactured, shall be deemed identified for purposes of this 
section. The Secretary s rule is required to include procedures 
to prevent the seizure of parts from which the mark or vehicle 
identification number has been legally removed pursuant to 
section 511 of title 18, United States Code.
    Paragraph (8) requires the Secretary to adopt nationally 
uniform safety inspection criteria for rebuilt salvage vehicles 
for use by States requiring a safety inspection. States will be 
permitted to conduct inspections themselves, contract with one 
or more third parties, or permit self-inspection by a person 
licensed by the State in an automotive related business, 
subject to the criteria promulgated by the Secretary. The 
Secretary is required to continually review and approve such 
programs and States are permitted to require the payment of a 
fee for the privilege of receiving or the processing of such 
inspection.
    Paragraph (9) stipulates that no participating State may 
issue a duplicate title unless it is conspicuously labeled as 
such and the State adopts procedures recommended by the Motor 
Vehicle Titling, Registration, and Salvage Advisory Committee.
    Paragraph (10) requires participating States to employ the 
titling and control methods described in subparagraphs (A) 
through (J). Subparagraph (A) requires the owner of a passenger 
motor vehicle which becomes a salvage or nonrepairable vehicle 
(other than an insurance company) to apply for a salvage title 
or a nonrepairable vehicle certificate before the vehicle is 
repaired, ownership transferred, or within 30 days after the 
passenger motor vehicle is damaged, whichever comes first.
    Subparagraph (B) states that when an insurance company 
becomes the owner of a passenger motor vehicle meeting the 
definition of a salvage vehicle or nonrepairable vehicle, the 
insurance company or salvage facility, or other agent operating 
on the insurance company s behalf, is required to apply for a 
salvage title or nonrepairable vehicle certificate within 30 
days after title to the vehicle is properly assigned by the 
owner to the insurance company and delivered to the insurance 
company or its agent with all liens released.
    Subparagraph (C) declares that, in a case where an 
insurance company does not assume ownership of an insured s 
salvage or nonrepairable vehicle, the insurance company is 
required to notify the owner of his or her obligation to apply 
for the salvage title or nonrepairable vehicle certificate and 
notify the State passenger motor vehicle titling office of the 
same, except to the extent that such a notification would be 
contrary to existing State insurance law. This exception is 
intended by the Committee to prevent potential conflicts 
between this Act and preexisting State unfair claims practices 
laws which might otherwise limit the kinds of notification that 
an insurer may send an insured when settling a claim.
    Subparagraph (D) requires participating States to require 
lessors to apply for a salvage title or nonrepairable vehicle 
certificate when a leased passenger motor vehicle meets the 
definition of a salvage or nonrepairable vehicle within 21 days 
after being notified by the lessee that such vehicle has 
sustained sufficient damage, except in cases where an insurance 
company acquires ownership pursuant to a damage settlement. 
Subparagraph (E) requires participatingStates to require 
persons who acquire ownership of a salvage or nonrepairable vehicle 
that has not already received a salvage title or nonrepairable vehicle 
certificate to apply for such titling before the vehicle is further 
transferred or within 30 days after ownership is acquired, whichever 
comes first. This requirement does not apply to any scrap metal 
processor who acquires ownership of the salvage or nonrepairable 
vehicle solely for the purpose of converting it into scrap and who 
processes the vehicle accordingly.
    Subparagraph (F) requires participating States to note when 
a nonrepairable vehicle certificate is issued and refuse to 
issue a nonrepairable vehicle certificate after 2 transfers of 
ownership, while subparagraph (G) requires that the title or 
nonrepairable vehicle certificate be surrendered to the State 
within 30 days when a passenger motor vehicle is flattened, 
baled, or shredded, whichever comes first. If the second 
transferee of a nonrepairable vehicle is unequipped to flatten, 
bale, or shred such vehicle, then that person is required to 
engage the services of a professional automotive recycler or 
scrap processor to properly dispose of the vehicle and 
surrender the title to the State. Participating States are 
required to update their records to indicate the destruction of 
the vehicle and prohibit further ownership transactions, and 
notify the titling State of the destruction of the vehicle.
    Subparagraph (H) requires participating States to note when 
a salvage title is issued. Participating States are prohibited 
from retitling (except in the case of a transfer of ownership) 
or issuing a rebuilt salvage title to a salvage vehicle unless 
the owner submits the required proof of inspection required 
under paragraphs (3), (7), and (8) of this section. It also 
clarifies that the prohibition on the issuance of a rebuilt 
salvage title, except as provided for by the legislation, does 
not extend to the issuance of another salvage title for the 
vehicle. The Committee does not intend to inadvertently prevent 
reassignments of salvage titles consistent with current 
practice. Subparagraph (I) requires officials performing an 
inspection pursuant to Sec. 33301(4) to affix the appropriate 
decal to the driver's side door jamb and issue the appropriate 
certificates, while subparagraph (J) permits the owner of a 
salvage vehicle to obtain a rebuilt salvage title and vehicle 
registration by submitting the necessary documentation to the 
participating State.
    Paragraph (11) requires the seller of a passenger motor 
vehicle damaged by flood to disclose that fact in writing to 
the buyer and paragraph (12) requires that lessees give the 
same notice to lessors.
    Paragraph (13) permits States to transfer ownership of a 
vehicle on a salvage title, but prohibits the registration of 
the vehicle for use on the roads or highways unless it receives 
a rebuilt salvage title. Paragraph (14) explicitly permits the 
transfer and registration of rebuilt salvage vehicles, while 
paragraph (15) limits the transfer of nonrepairable vehicles 
and prohibits the registration of those vehicles for use on the 
roads and highways.

Section 33303--Disclosure and label requirements on transfer of rebuilt 
        salvage vehicles

    This section is intended to ensure that consumers are 
provided with adequate notice that they may be purchasing a 
rebuilt salvage vehicle. Subsection (a) requires the person 
transferring a rebuilt salvage vehicle to disclose that fact in 
writing to the person receiving the vehicle. Such written 
disclosures must be true, complete, and conform to regulations 
issued by the Secretary.
    Subsection (b) is meant to provide additional notice to 
consumers who are purchasing rebuilt salvage vehicles at their 
first retail sale after being rebuilt. This subsection requires 
that the person conducting an anti-theft inspection required 
under Sec. 33301(4) in a participating State affix a label to 
the window or windshield indicating that the vehicle is a 
rebuilt salvage vehicle and such other information as the 
Secretary may require. The label may not be removed, altered, 
or rendered illegible before the rebuilt salvage vehicle is 
delivered to the first retail purchaser.

Section 33304--Report on funding

    This section requires the Secretary to issue a report to 
Congress, contemporaneously with the issuance of the rule under 
Sec. 33302(b), on whether participating States could meet the 
costs of complying with that rule through user fees or the 
earmarking of revenues collected through law enforcement 
actions under the rule.

Section 33305--Petitions for extensions of time

    The Secretary may permit, for good cause, an extension for 
a participating State to comply with the provisions of 
Sec. 33302(a), although no extension will remain in effect 
after the rule issued under Sec. 33302(b) becomes effective.

Section 33306--Effect on State law

    Subsection (a) provides that, as of the effective date of 
the rule issued under Sec. 33302(b), the provisions of this 
legislation shall preempt all State laws in participating 
States to the extent that they are inconsistent with the 
provisions of the chapter or the rules issued thereunder, with 
respect to the form of the passenger motor vehicle titling 
document, definitions established under the legislation, or 
titling, recordkeeping, anti-theft inspection, or control 
procedures. The legislation specifically provides that 
preemptions are not to be construed as affecting any consumer 
law remedies which may be available to residents of the 
participating State for violations of the legislation. The 
Committee specifically notes that the preemption under this 
subsection is limited to the terms of the legislation. 
Therefore, terms and brands other than those specifically 
preempted by the legislation, such as a brand indicating that a 
vehicle was previously stolen, would not be preempted. Also, 
any vehicles which may be regulated by existing State statutes, 
but do not fall within the definition of passenger motor 
vehicle as defined by Sec. 33301(1), are not covered by the Act 
and existing State regulatory regimes applicable to those 
vehicles would remain intact. Likewise, the Committee intends 
that any State consumer law remedy that would apply to the 
class of vehicles regulated by the legislation, even if the 
term used to refer to those vehicles is preempted under 
subsection (b), would not be inconsistent with this chapter and 
would remain intact.
    Subsection (b) explicitly permits additional disclosures of 
a passenger motor vehicle's title status or history, including 
those made on the face of a title. It also permits disclosures 
that a rebuilt salvage vehicle passed a safety inspection that 
differed from the national criteria promulgated by the 
Secretary pursuant to Sec. 33302(b)(8). However, the 
legislation preempts any participating State's definition of 
any term defined in the legislation as applied to a passenger 
motor vehicle. The Committee intends to permit States that 
disclose major damage to passenger motor vehicles, other than 
through different thresholds for the terms defined in 
Sec. 33301, to continue to disclose that information, 
regardless of where the information appears.

Section 33307--Civil and criminal penalties

    Subsection (a) lists the acts which are prohibited by the 
legislation. Subsection (b) sets forth the civil penalties and 
clarifies that it is a separate violation for each passenger 
motor vehicle involved in the violation. Subsection (c) sets 
forth the criminal penalties.

Section 33308--Actions by States

    Subsection (a) permits a State to bring a civil or criminal 
action against any person believed to have violated or be 
violating sections 33302 or 33303 when the Attorney General of 
such State believes the interests of the residents of that 
State have been or are being threatened. That civil action may 
be brought either in the appropriate U.S. district court or the 
appropriate State court. When bringing a civil action, a State 
may seek either to enjoin the violations or to enforce the 
civil penalties under section 33307.
    Subsection (b) requires that the State serve prior or 
contemporaneous written notice on the Attorney General of the 
United States of any action brought under subsections (a) or 
(e)(2). After notification, the Attorney General shall have the 
right to intervene or appeal such action. Subsection (d) 
stipulates rules for venue and service of process.
    Subsections (c) and (e) clarify that nothing in the 
legislation prevents the Attorney General of a State, or other 
authorized official, from proceeding in State court on the 
basis of an alleged violation of a civil or criminal statute of 
the State. Further, nothing in the legislation prohibits a 
State's attorney general or other State official from 
exercising the investigative powers conferred on that official.

                  section 3. amendments to chapter 305

    Subsection (a) conforms the definitions in chapter 305 to 
replace the terms junk automobile and salvage automobile with 
the terms nonrepairable vehicle and salvage vehicle. It also 
adds the term rebuilt salvage vehicle and defines all of the 
terms as they are defined by section 33301.
    Subsection (b) conforms the requirements of the National 
Motor Vehicle Title Information System (``NMVTIS'') to conform 
the changes in definitions made in subsection (a) and require 
the tracking of rebuilt salvage vehicles.
    Subsection (c) amends section 30503 to prohibit any State 
which does not comply with uniform definitions and procedures 
for salvage, rebuilt salvage, and nonrepairable vehicles under 
chapter 333 and any rules promulgated thereunder from 
participating in the NMVTIS. It also makes certain changes 
necessary to conform the section to the new, voluntary nature 
of the program.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                      TITLE 49, UNITED STATES CODE

                            * * * * * * *

             SUBTITLE VI--MOTOR VEHICLE AND DRIVER PROGRAMS

                             PART A--GENERAL

Chapter                                                             Sec.
      MOTOR VEHICLE SAFETY.........................................30101
                            * * * * * * *

            PART C--INFORMATION, STANDARDS, AND REQUIREMENTS

      GENERAL......................................................32101
                              * * * * * * *
      AUTOMOBILE SAFETY AND TITLE DISCLOSURE REQUIREMENTS..........33301
                              * * * * * * *

      CHAPTER 305--NATIONAL MOTOR VEHICLE TITLE INFORMATION SYSTEM

                              * * * * * * *

Sec. 30501. Definitions

  In this chapter--
          (1) * * *
                              * * * * * * *
          [(4) ``junk automobile'' means an automobile that--
                  [(A) is incapable of operating on public 
                streets, roads, and highways; and
                  [(B) has no value except as a source of parts 
                or scrap.]
          (4) ``nonrepairable vehicle'', ``salvage vehicle'', 
        and ``rebuilt salvage vehicle'' shall have the same 
        meanings given those terms in section 33301 of this 
        title.
                             * * * * * * *
          [(7) ``salvage automobile'' means an automobile that 
        is damaged by collision, fire, flood, accident, 
        trespass, or other event, to the extent that its fair 
        salvage value plus the cost of repairing the automobile 
        for legal operation on public streets, roads, and 
        highways would be more than the fair market value of 
        the automobile immediately before the event that caused 
        the damage.]
          [(8)] (7) ``salvage yard'' means an individual or 
        entity engaged in the business of acquiring or owning 
        salvage automobiles for--
                  (A) resale in their entirety or as spare 
                parts; or
                  (B) rebuilding, restoration, or crushing.
          [(9)] (8) ``State'' means a State of the United 
        States or the District of Columbia.

Sec. 30502. National Motor Vehicle Title Information System

  (a) * * *
                          * * * * * * *
  (d) Information Requirements.--The System established or 
designated under subsection (a)(1) of this section shall permit 
a user of the System at least to establish instantly and 
reliably--
          (1) the validity and status of a document purporting 
        to be a certificate of title;
          (2) whether an automobile bearing a known vehicle 
        identification number is titled in a particular State;
          [(3) whether an automobile known to be titled in a 
        particular State is or has been a junk automobile or a 
        salvage automobile;]
          (3) whether an automobile known to be titled in a 
        particular State is or has been a nonrepairable 
        vehicle, a rebuilt salvage vehicle, or a salvage 
        vehicle;
          (4) for an automobile known to be titled in a 
        particular State, the odometer mileage disclosure 
        required under section 32705 of this title for that 
        automobile on the date the certificate of title for 
        that automobile was issued and any later mileage 
        information, if noted by the State; and
          [(5) whether an automobile bearing a known vehicle 
        identification number has been reported as a junk 
        automobile or a salvage automobile under section 30504 
        of this title.]
          (5) whether an automobile bearing a known vehicle 
        identification number has been reported as a 
        nonrepairable vehicle, a rebuilt salvage vehicle, or a 
        salvage vehicle under section 30504 of this title.
          * * * * * * *

[Sec. 30503. State participation

  [(a) State Information.--Each State shall make titling 
information maintained by that State available for use in 
operating the National Motor Vehicle Title Information System 
established or designated under section 30502 of this title.
  [(b) Verification Checks.--Each State shall establish a 
practice of performing an instant title verification check 
before issuing a certificate of title to an individual or 
entity claiming to have purchased an automobile from an 
individual or entity in another State. The check shall consist 
of--
          [(1) communicating to the operator--
                  [(A) the vehicle identification number of the 
                automobile for which the certificate of title 
                is sought;
                  [(B) the name of the State that issued the 
                most recent certificate of title for the 
                automobile; and
                  [(C) the name of the individual or entity to 
                whom the certificate of title was issued; and
          [(2) giving the operator an opportunity to 
        communicate to the participating State the results of a 
        search of the information.
  [(c) Grants to States.--(1) In cooperation with the States 
and not later than January 1, 1994, the Attorney General 
shall--
          [(A) conduct a review of systems used by the States 
        to compile and maintain information about the titling 
        of automobiles; and
          [(B) determine for each State the cost of making 
        titling information maintained by that State available 
        to the operator to meet the requirements of section 
        30502(d) of this title.
  [(2) The Attorney General may make reasonable and necessary 
grants to participating States to be used in making titling 
information maintained by those States available to the 
operator.
  [(d) Report to Congress.--Not later than October 1, 1998, the 
Attorney General shall report to Congress on which States have 
met the requirements of this section. If a State has not met 
the requirements, the Attorney General shall describe the 
impediments that have resulted in the State's failure to meet 
the requirements.]

Sec. 30503. State participation

  (a) State Participation.--No State may participate in the 
National Motor Vehicle Title Information System established 
under section 30502 of this title unless such State complies 
with the requirements of chapter 333 of this subtitle and the 
rule promulgated pursuant to section 33302 of this title.
  (b) State Information.--Each participating State shall make 
titling information maintained by that State available for use 
in operating the National Motor Vehicle Title Information 
System established or designated under section 30502 of this 
title.
  (c) Verification Checks.--Each participating State shall 
establish a practice of performing an instant title 
verification check before issuing a certificate of title to an 
individual or entity claiming to have purchased an automobile 
from an individual or entity in another State. The check shall 
consist of--
          (1) communicating to the operator--
                  (A) the vehicle identification number of the 
                automobile for which the certificate of title 
                is sought;
                  (B) the name of the State that issued the 
                most recent certificate of title for the 
                automobile; and
                  (C) the name of the individual or entity to 
                whom the certificate of title was issued; and
          (2) giving the operator an opportunity to communicate 
        to the participating State the results of a search of 
        the information.
  (d) Grants to States.--
          (1) In cooperation with the States and not later than 
        January 1, 1994, the Attorney General shall--
                  (A) conduct a review of systems used by the 
                States to compile and maintain information 
                about the titling of automobiles; and
                  (B) determine for each State the cost of 
                making titling information maintained by that 
                State available to the operator to meet the 
                requirements of section 30502(d) of this title.
          (2) The Attorney General may make reasonable and 
        necessary grants to participating States to be used in 
        making titling information maintained by those States 
        available to the operator.
  (e) Report to Congress.--Not later than October 1, 1998, the 
Attorney General shall report to Congress on which States have 
met the requirements of this section. If a State has not met 
the requirements, the Attorney General shall describe the 
impediments that have resulted in the State's failure to meet 
the requirements.

Sec. 30504. Reporting requirements

  (a) Junk Yard and Salvage Yard Operators.--(1) Beginning at a 
time established by the Attorney General that is not sooner 
than the 3d month before the establishment or designation of 
the National Automobile Title Information System under section 
30502 of this title, an individual or entity engaged in the 
business of operating a junk yard or salvage yard shall file a 
monthly report with the operator of the System. The report 
shall contain an inventory of all [junk automobiles or salvage 
automobiles] nonrepairable vehicles, rebuilt salvage vehicles, 
or salvage vehicles obtained by the junk yard or salvage yard 
during the prior month. The inventory shall contain--
          (A) * * *
                            * * * * * * *
  (2) Paragraph (1) of this subsection does not apply to an 
individual or entity--
          (A) required by State law to report the acquisition 
        of [junk automobiles or salvage automobiles] 
        nonrepairable vehicles, rebuilt salvage vehicles, or 
        salvage vehicles to State or local authorities if those 
        authorities make that information available to the 
        operator; or
          (B) issued a verification under section 33110 of this 
        title stating that the automobile or parts from the 
        automobile are not reported as stolen.
  (b) Insurance Carriers.--Beginning at a time established by 
the Attorney General that is not sooner than the 3d month 
before the establishment or designation of the System, an 
individual or entity engaged in business as an insurance 
carrier shall file a monthly report with the operator. The 
report may be filed directly or through a designated agent. The 
report shall contain an inventory of all automobiles of the 
current model year or any of the 4 prior model years that the 
carrier, during the prior month, has obtained possession of and 
has decided are [junk automobiles or salvage automobiles] 
nonrepairable vehicles, rebuilt salvage vehicles, or salvage 
vehicles. The inventory shall contain--
          (1) * * *
                           * * * * * * *

    CHAPTER 333--AUTOMOBILE SAFETY AND TITLE DISCLOSURE REQUIREMENTS

Sec.
33301. Definitions.
33302. Passenger motor vehicle titling.
33303. Disclosure and label requirements on transfer of rebuilt salvage 
                            vehicles.
33304. Report on funding.
33305. Petitions for extensions of time.
33306. Effect on State law.
33307. Civil and criminal penalties.
33308. Actions by States.

Sec. 33301. Definitions

  For the purposes of this chapter:
          (1) Passenger motor vehicle.--The term ``passenger 
        motor vehicle'' shall have the same meaning given such 
        term by section 32101(10), except, notwithstanding 
        section 32101(9), it shall include a multipurpose 
        passenger vehicle (constructed on a truck chassis or 
        with special features for occasional off-road 
        operation), or a truck, other than a truck referred to 
        in section 32101(10)(B), when that vehicle or truck is 
        rated by the manufacturer of such vehicle or truck at 
        not more than 10,000 pounds gross vehicle weight, and 
        except further, it shall only include a vehicle 
        manufactured primarily for use on public streets, 
        roads, and highways.
          (2) Salvage vehicle.--The term ``salvage vehicle'' 
        means any passenger motor vehicle which--
                  (A) is a late model vehicle which has been 
                wrecked, destroyed, or damaged, to the extent 
                that the total cost of repairs to rebuild or 
                reconstruct the passenger motor vehicle to its 
                condition immediately before it was wrecked, 
                destroyed, or damaged, and for legal operation 
                on the roads or highways, exceeds 80 percent of 
                the retail value of the passenger motor 
                vehicle;
                  (B) is a late model vehicle which has been 
                wrecked, destroyed, or damaged, and to which an 
                insurance company acquires ownership pursuant 
                to a damage settlement (except in the case of a 
                settlement in connection with a recovered 
                stolen vehicle, unless such vehicle sustained 
                damage sufficient to meet the damage threshold 
                prescribed by subparagraph (A)); or
                  (C) the owner wishes to voluntarily designate 
                as a salvage vehicle by obtaining a salvage 
                title, without regard to the level of damage, 
                age, or value of such vehicle or any other 
                factor, except that such designation by the 
                owner shall not impose on the insurer of the 
                passenger motor vehicle or on an insurer 
                processing a claim made by or on behalf of the 
                owner of the passenger motor vehicle any 
                obligation or liability.
          (3) Salvage title.--The term ``salvage title'' means 
        a passenger motor vehicle ownership document issued by 
        the State to the owner of a salvage vehicle. A salvage 
        title shall be conspicuously labeled with the word 
        ``salvage'' across the front.
          (4) Rebuilt salvage vehicle.--The term ``rebuilt 
        salvage vehicle'' means--
                  (A) any passenger motor vehicle which was 
                previously issued a salvage title, has passed 
                State anti-theft inspection, has been issued a 
                certificate indicating that the passenger motor 
                vehicle has passed the required anti-theft 
                inspection, has passed the State safety 
                inspection in those States requiring a safety 
                inspection pursuant to section 33302(b)(8), has 
                been issued a certificate indicating that the 
                passenger motor vehicle has passed the required 
                safety inspection in those States requiring 
                such a safety inspection pursuant to section 
                33302(b)(8), and has a decal stating ``Rebuilt 
                Salvage Vehicle--Anti-theft and Safety 
                Inspections Passed'' affixed to the driver's 
                door jamb; or
                  (B) any passenger motor vehicle which was 
                previously issued a salvage title, has passed a 
                State anti-theft inspection, has been issued a 
                certificate indicating that the passenger motor 
                vehicle has passed the required anti-theft 
                inspection, and has, affixed to the driver's 
                door jamb, a decal stating ``Rebuilt Salvage 
                Vehicle--Anti-theft Inspection Passed/No Safety 
                Inspection Pursuant to National Criteria'' in 
                those States not requiring a safety inspection 
                pursuant to section 33302(b)(8).
          (5) Rebuilt salvage title.--The term ``rebuilt 
        salvage title'' means the passenger motor vehicle 
        ownership document issued by the State to the owner of 
        a rebuilt salvage vehicle. A rebuilt salvage title 
        shall be conspicuously labeled either with the words 
        ``Rebuilt Salvage Vehicle--Anti-theft and Safety 
        Inspections Passed'' or ``Rebuilt Salvage Vehicle--
        Anti-theft Inspection Passed/No Safety Inspection 
        Pursuant to National Criteria,'' as appropriate, across 
        the front.
          (6) Nonrepairable vehicle.--The term ``nonrepairable 
        vehicle'' means any passenger motor vehicle which is 
        incapable of safe operation for use on roads or 
        highways and which has no resale value except as a 
        source of parts or scrap only or which the owner 
        irreversibly designates as a source of parts or scrap. 
        Such passenger motor vehicle shall be issued a 
        nonrepairable vehicle certificate and shall never again 
        be titled or registered.
          (7) Nonrepairable vehicle certificate.--The term 
        ``nonrepairable vehicle certificate'' means a passenger 
        motor vehicle ownership document issued by the State to 
        the owner of a nonrepairable vehicle. A nonrepairable 
        vehicle certificate shall be conspicuously labeled with 
        the word ``Nonrepairable'' across the front.
          (8) Secretary.--The term ``Secretary'' means the 
        Secretary of Transportation.
          (9) Late model vehicle.--The term ``Late Model 
        Vehicle'' means any passenger motor vehicle which--
                  (A) has a manufacturer's model year 
                designation of or later than the year in which 
                the vehicle was wrecked, destroyed, or damaged, 
                or any of the six preceding years; or
                  (B) has a retail value of more than $7,500.
        The Secretary shall adjust such retail value on an 
        annual basis in accordance with changes in the consumer 
        price index.
          (10) Retail value.--The term ``retail value'' means 
        the actual cash value, fair market value, or retail 
        value of a passenger motor vehicle as--
                  (A) set forth in a current edition of any 
                nationally recognized compilation (to include 
                automated databases) of retail values; or
                  (B) determined pursuant to a market survey of 
                comparable vehicles with regard to condition 
                and equipment.
          (11) Cost of repairs.--The term ``cost of repairs'' 
        means the estimated retail cost of parts needed to 
        repair the vehicle or, if the vehicle has been 
        repaired, the actual retail cost of the parts used in 
        the repair, and the cost of labor computed by using the 
        hourly labor rate and time allocations that are 
        reasonable and customary in the automobile repair 
        industry in the community where the repairs are to be 
        performed.

Sec. 33302. Passenger motor vehicle titling

  (a) Carry-Forward of Information on a Newly Issued Title 
Where the Previous Title for the Vehicle Was Not Issued 
Pursuant to New Nationally Uniform Standards.--For any 
passenger motor vehicle, the ownership of which is transferred 
on or after the date that is 1 year from the date of the 
enactment of this chapter, each State participating in the 
National Motor Vehicle Title Information System established 
under chapter 305 of subtitle VI of this title, in licensing 
such vehicle for use, shall disclose in writing on the 
certificate of title whenever records readily accessible to the 
State indicate that the passenger motor vehicle was previously 
issued a title that bore any word or symbol signifying that the 
vehicle was ``salvage'', ``unrebuildable'', ``parts only'', 
``scrap'', ``junk'', ``nonrepairable'', ``reconstructed'', 
``rebuilt'', or any other symbol or word of like kind, or that 
it has been damaged by flood.
  (b) Nationally Uniform Title Standards and Control Methods.--
Not later than 18 months after the date of the enactment of 
this chapter, the Secretary shall by rule require each State 
participating in the National Motor Vehicle Title Information 
System established under chapter 305 of subtitle VI of this 
title, in licensing any passenger motor vehicle where ownership 
of such passenger motor vehicle is transferred more than 2 
years after publication of such final rule, to apply uniform 
standards, procedures, and methods for the issuance and control 
of titles for motor vehicles and for information to be 
contained on such titles. Such titling standards, control 
procedures, methods, and information shall include the 
following requirements:
          (1) A State shall conspicuously indicate on the face 
        of the title or certificate for a passenger motor 
        vehicle, as applicable, if the passenger motor vehicle 
        is a salvage vehicle, a nonrepairable vehicle, or a 
        rebuilt salvage vehicle and whether such vehicle was 
        damaged by flood.
          (2) Such information concerning a passenger motor 
        vehicle's status shall be conveyed on any subsequent 
        title, including a duplicate or replacement title, for 
        the passenger motor vehicle issued by the original 
        titling State or any other State.
          (3) The title documents, the certificates, and decals 
        required by section 33301(4), and the issuing system 
        shall meet security standards minimizing the 
        opportunities for fraud.
          (4) The certificate of title shall include the 
        passenger motor vehicle make, model, body type, year, 
        odometer disclosure, and vehicle identification number.
          (5) The title documents shall maintain a uniform 
        layout, to be established in consultation with the 
        State or an organization representing them.
          (6) A passenger motor vehicle designated as 
        nonrepairable shall be issued a nonrepairable vehicle 
        certificate and shall not be retitled.
          (7) No rebuilt salvage title shall be issued to a 
        salvage vehicle unless, after the salvage vehicle is 
        repaired or rebuilt, it complies with the requirements 
        for a rebuilt salvage vehicle pursuant to section 
        33301(4). Any State inspection program operating under 
        this paragraph shall be subject to continuing review by 
        and approval of the Secretary. Any such anti-theft 
        inspection program shall include the following:
                  (A) A requirement that the owner of any 
                passenger motor vehicle submitting such vehicle 
                for an anti-theft inspection provide a 
                completed document identifying the vehicle's 
                damage prior to being repaired, a list of 
                replacement parts used to repair the vehicle, 
                and proof of ownership of such replacement 
                parts, as may be evidenced by bills of sale, 
                invoices, or, if such documents are not 
                available, other proof of ownership for the 
                replacement parts. The owner shall also include 
                an affirmation that the information in the 
                declaration is complete and accurate and that, 
                to the knowledge of the declarant, no stolen 
                parts were used during the rebuilding.
                  (B) A requirement to inspect the passenger 
                motor vehicle or any major part or any major 
                replacement part required to be marked under 
                section 33102 for signs of such mark or vehicle 
                identification number being illegally altered, 
                defaced, or falsified. Any such passenger motor 
                vehicle or any such part having a mark or 
                vehicle identification number that has been 
                illegally altered, defaced, or falsified, and 
                that cannot be identified as having been 
                legally obtained (through bills of sale, 
                invoices, or other ownership documentation), 
                shall be contraband and subject to seizure. The 
                Secretary, in consultation with the Attorney 
                General, shall, as part of the rule required by 
                this section, establish procedures for dealing 
                with those parts whose mark or vehicle 
                identification number is normally removed 
                during industry accepted remanufacturing or 
                rebuilding practices, which parts shall be 
                deemed identified for purposes of this section 
                if they bear a conspicuous mark of a type, and 
                applied in such a manner, as designated by the 
                Secretary indicating that they have been 
                rebuilt or remanufactured. With respect to any 
                vehicle part, the Secretary's rule, as required 
                by this section, shall acknowledge that a mark 
                or vehicle identification number on such part 
                may be legally removed or altered as provided 
                for in section 511 of title 18, United States 
                Code, and shall direct inspectors to adopt such 
                procedures as may be necessary to prevent the 
                seizure of a part from which the mark or 
                vehicle identification number has been legally 
                removed or altered.
          (8) The Secretary shall establish nationally uniform 
        safety inspection criteria to be used in those States 
        requiring such a safety inspection. A State may 
        determine whether to conduct such safety inspection 
        itself, contract with one or more third parties, or 
        permit self-inspection by a person licensed by such 
        State in an automotive-related business, all subject to 
        criteria promulgated by the Secretary hereunder. Any 
        State inspection program operating under this paragraph 
        shall be subject to continuing review by and approval 
        of the Secretary. A State requiring such safety 
        inspection may require the payment of a fee for the 
        privilege of such inspection or the processing thereof.
          (9) No duplicate or replacement title shall be issued 
        unless the word ``duplicate'' is clearly marked on the 
        face thereof and unless the procedures for such 
        issuance are substantially consistent with 
        Recommendation three of the Motor Vehicle Titling, 
        Registration and Salvage Advisory Committee.
          (10) A State shall employ the following titling and 
        control methods:
                  (A) If an insurance company is not involved 
                in a damage settlement involving a salvage 
                vehicle or a nonrepairable vehicle, the 
                passenger motor vehicle owner shall apply for a 
                salvage title or nonrepairable vehicle 
                certificate, whichever is applicable, before 
                the passenger motor vehicle is repaired or the 
                ownership of the passenger motor vehicle is 
                transferred, but in any event within 30 days 
                after the passenger motor vehicle is damaged.
                  (B) If an insurance company, pursuant to a 
                damage settlement, acquires ownership of a 
                passenger motor vehicle that has incurred 
                damage requiring the vehicle to be titled as a 
                salvage vehicle or nonrepairable vehicle, the 
                insurance company or salvage facility or other 
                agent on its behalf shall apply for a salvage 
                title or nonrepairable vehicle certificate 
                within 30 days after the title is properly 
                assigned by the owner to the insurance company 
                and delivered to the insurance company or 
                salvage facility or other agent on its behalf 
                with all liens released.
                  (C) If an insurance company does not assume 
                ownership of an insured's or claimant's 
                passenger motor vehicle that has incurred 
                damage requiring the vehicle to be titled as a 
                salvage vehicle or nonrepairable vehicle, the 
                insurance company shall notify the owner of the 
                owner's obligation to apply for a salvage title 
                or nonrepairable vehicle certificate for the 
                passenger motor vehicle and notify the State 
                passenger motor vehicle titling office that a 
                salvage title or nonrepairable vehicle 
                certificate should be issued for thevehicle, 
except to the extent such notification is prohibited by State insurance 
law.
                  (D) If a leased passenger motor vehicle 
                incurs damage requiring the vehicle to be 
                titled as a salvage vehicle or nonrepairable 
                vehicle, the lessor shall apply for a salvage 
                title or nonrepairable vehicle certificate 
                within 21 days after being notified by the 
                lessee that the vehicle has been so damaged, 
                except when an insurance company, pursuant to a 
                damage settlement, acquires ownership of the 
                vehicle. The lessee of such vehicle shall 
                inform the lessor that the leased vehicle has 
                been so damaged within 30 days after the 
                occurrence of the damage.
                  (E) Any person acquiring ownership of a 
                damaged passenger motor vehicle that meets the 
                definition of a salvage or nonrepairable 
                vehicle for which a salvage title or 
                nonrepairable vehicle certificate has not been 
                issued, shall apply for a salvage title or 
                nonrepairable vehicle certificate, whichever is 
                applicable. This application shall be made 
                before the vehicle is further transferred, but 
                in any event, within 30 days after ownership is 
                acquired. The requirements of this subparagraph 
                shall not apply to any scrap metal processor 
                which acquires a passenger motor vehicle for 
                the sole purpose of processing it into prepared 
                grades of scrap and which so processes such 
                vehicle.
                  (F) State records shall note when a 
                nonrepairable vehicle certificate is issued. No 
                State shall issue a nonrepairable vehicle 
                certificate after 2 transfers of ownership.
                  (G) When a passenger motor vehicle has been 
                flattened, baled, or shredded, whichever comes 
                first, the title or nonrepairable vehicle 
                certificate for the vehicle shall be 
                surrendered to the State within 30 days. If the 
                second transferee on a nonrepairable vehicle 
                certificate is unequipped to flatten, bale, or 
                shred the vehicle, such transferee shall, at 
                the time of final disposal of the vehicle, use 
                the services of a professional automotive 
                recycler or professional scrap processor who is 
                hereby authorized to flatten, bale, or shred 
                the vehicle and to effect the surrender of the 
                nonrepairable vehicle certificate to the State 
                on behalf of such second transferee. State 
                records shall be updated to indicate the 
                destruction of such vehicle and no further 
                ownership transactions for the vehicle will be 
                permitted. If different than the State of 
                origin of the title or nonrepairable vehicle 
                certificate, the State of surrender shall 
                notify the State of origin of the surrender of 
                the title or nonrepairable vehicle certificate 
                and of the destruction of such vehicle.
                  (H) When a salvage title is issued, the State 
                records shall so note. No State shall permit 
                the retitling for registration purposes or 
                issuance of a rebuilt salvage title for a 
                passenger motor vehicle with a salvage title 
                without a certificate of inspection, which 
                complies with the security and guideline 
                standards established by the Secretary pursuant 
                to paragraphs (3), (7), and (8), as applicable, 
                indicating that the vehicle has passed the 
                inspections required by the State. This 
                subparagraph does not preclude the issuance of 
                a new salvage title for a salvage vehicle after 
                a transfer of ownership.
                  (I) After a passenger motor vehicle titled 
                with a salvage title has passed the inspections 
                required by the State, the inspection official 
                will affix the secure decal required pursuant 
                to section 33301(4) to the driver's door jamb 
                of the vehicle and issue to the owner of the 
                vehicle a certificate indicating that the 
                passenger motor vehicle has passed the 
                inspections required by the State. The decal 
                shall comply with the permanency requirements 
                established by the Secretary.
                  (J) The owner of a passenger motor vehicle 
                titled with a salvage title may obtain a 
                rebuilt salvage title or vehicle registration, 
                or both, by presenting to the State the salvage 
                title, properly assigned, if applicable, along 
                with the certificate that the vehicle has 
                passed the inspections required by the State. 
                With such proper documentation and upon 
                request, a rebuilt salvage title or 
                registration, or both, shall be issued to the 
                owner. When a rebuilt salvage title is issued, 
                the State records shall so note.
          (11) A seller of a passenger motor vehicle that 
        becomes a salvage vehicle due to damage by flood shall, 
        at or prior to the time of transfer of ownership, give 
        the buyer a written notice that the vehicle has been 
        damaged by flood.
          (12) In the case of a leased passenger motor vehicle, 
        the lessee, within 15 days of the occurrence of the 
        event that caused the vehicle to become a salvage 
        vehicle due to damage by flood, shall give the lessor 
        written disclosure that the vehicle is a salvage 
        vehicle due to damage by flood.
          (13) Ownership of a passenger motor vehicle may be 
        transferred on a salvage title, however, a passenger 
        motor vehicle for which a salvage title has been issued 
        shall not be registered for use on the roads or 
        highways unless it has been issued a rebuilt salvage 
        title.
          (14) Ownership of a passenger motor vehicle may be 
        transferred on a rebuilt salvage title, and a passenger 
        motor vehicle for which a rebuilt salvage title has 
        been issued may be registered for use on the roads and 
        highways.
          (15) Ownership of a passenger motor vehicle may only 
        be transferred 2 times on a nonrepairable vehicle 
        certificate. A passenger motor vehicle for which a 
        nonrepairable vehicle certificate has been issued can 
        never be titled or registered for use on roads or 
        highways.

Sec. 33303. Disclosure and label requirements on transfer of rebuilt 
                    salvage vehicles

  (a) Written Disclosure Requirements.--
          (1) General rule.--Under regulations prescribed by 
        the Secretary of Transportation, a person transferring 
        ownership of a rebuilt salvage vehicle shall give the 
        transferee a written disclosure that the vehicle is a 
        rebuilt salvage vehicle when such person has actual 
        knowledge of the status of such vehicle.
          (2) False statement.--A person making a written 
        disclosure required by a regulation prescribed under 
        paragraph (1) of this subsection may not make a false 
        statement in the disclosure.
          (3) Completeness.--A person acquiring a rebuilt 
        salvage vehicle for resale may accept a disclosure 
        under paragraph (1) only if it is complete.
          (4) Regulations.--The regulations prescribed by the 
        Secretary shall provide the way in which information is 
        disclosed and retained under paragraph (1).
  (b) Label Requirements.--
          (1) In general.--The Secretary shall by regulation 
        require that a label be affixed to the windshield or 
        window of a rebuilt salvage vehicle before its first 
        sale at retail containing such information regarding 
        that vehicle as the Secretary may require. The label 
        shall be affixed by the individual who conducts the 
        applicable State antitheft inspection in a 
        participating State.
          (2) Removal, alteration, or illegibility of required 
        label.--No person shall willfully remove, alter, or 
        render illegible any label required by paragraph (1) 
        affixed to a rebuilt salvage vehicle before the vehicle 
        is delivered to the actual custody and possession of 
        the first retail purchaser.

Sec. 33304. Report on funding

  The Secretary shall, contemporaneously with the issuance of a 
final rule pursuant to section 33302(b), report to appropriate 
committees of Congress whether the costs to the States of 
compliance with such rule can be met by user fees for issuance 
of titles, issuance of registrations, issuance of duplicate 
titles, inspection of rebuilt vehicles, or for the State 
services, or by earmarking any moneys collected through law 
enforcement action to enforce requirements established by such 
rule.

Sec. 33305. Petitions for extensions of time

  The Secretary may grant a State, for good cause shown, an 
extension of time to comply with the requirements established 
in section 33302(a). No such extension shall remain in effect 
on or after the compliance date established pursuant to section 
33302(b).

Sec. 33306. Effect on State law

  (a) In General.--Effective on the date the rule promulgated 
pursuant to section 33302 becomes effective, the provisions of 
this chapter shall preempt all State laws in States 
participating in the National Motor Vehicle Title Information 
System established under chapter 305 of subtitle VI of this 
title, to the extent they are inconsistent with the provisions 
of this chapter or the rule promulgated pursuant to section 
33302, which--
          (1) set forth the form of the passenger motor vehicle 
        title;
          (2) define, in connection with a passenger 
motorvehicle (but not in connection with a passenger motor vehicle part 
or part assembly separate from a passenger motor vehicle), any term 
defined in section 33301 or the terms ``salvage'', ``junk'', 
``reconstructed'', ``nonrepairable'', ``unrebuildable'', ``scrap'', 
``parts only'', ``rebuilt'', ``flood'', or any other symbol or word of 
like kind, or apply any of those terms to any passenger motor vehicle 
(but not to a passenger motor vehicle part or part assembly separate 
from a passenger motor vehicle); or
          (3) set forth titling, recordkeeping, anti-theft 
        inspection, or control procedures in connection with 
        any salvage vehicle, rebuilt salvage vehicle, or 
        nonrepairable vehicle.
The requirements described in paragraph (3) shall not be 
construed to affect any State consumer law actions that may be 
available to residents of the State for violations of this 
chapter.
  (b) Construction.--Additional disclosures of a passenger 
motor vehicle's title status or history, in addition to the 
terms defined in section 33301, shall not be deemed 
inconsistent with the provisions of this chapter. Such 
disclosures shall include disclosures made on a certificate of 
title. When used in connection with a passenger motor vehicle 
(but not in connection with a passenger motor vehicle part or 
part assembly separate from a passenger motor vehicle), any 
definition of a term defined in section 33301 which is 
different than the definition in that section or any use of any 
term listed in subsection (a), but not defined in section 
33301, shall be deemed inconsistent with the provisions of this 
chapter. Nothing in this chapter shall preclude a State from 
disclosing on a rebuilt salvage title that a rebuilt salvage 
vehicle has passed a State safety inspection which differed 
from the nationally uniform criteria to be promulgated pursuant 
to section 33302(b)(8).

Sec. 33307. Civil and criminal penalties

  (a) Prohibited Acts.--It shall be unlawful for any person 
knowingly and willfully to--
          (1) make or cause to be made any false statement on 
        an application for a title (or duplicate title) for a 
        passenger motor vehicle or any disclosure made pursuant 
        to section 33303;
          (2) fail to apply for a salvage title when such an 
        application is required;
          (3) alter, forge, or counterfeit a certificate of 
        title (or an assignment thereof), a nonrepairable 
        vehicle certificate, a certificate verifying an anti-
        theft inspection or an anti-theft and safety 
        inspection, a decal affixed to a passenger motor 
        vehicle pursuant to section 33302(b)(10)(I), or any 
        disclosure made pursuant to section 33303;
          (4) falsify the results of, or provide false 
        information in the course of, an inspection conducted 
        pursuant to section 33302(b)(7) or (8);
          (5) offer to sell any salvage vehicle or 
        nonrepairable vehicle as a rebuilt salvage vehicle;
          (6) fail to make any disclosure required by section 
        33303, except when the person lacks actual knowledge of 
        the status of the rebuilt salvage vehicle;
          (7) violate a regulation prescribed under this 
        chapter; or
          (8) conspire to commit any of the acts enumerated in 
        paragraphs (1), (2), (3), (4), (5), (6), or (7).
  (b) Civil Penalty.--Any person who commits an unlawful act as 
provided in subsection (a) of this section shall be fined a 
civil penalty of up to $2,000 per offense. A separate violation 
occurs for each passenger motor vehicle involved in the 
violation.
  (c) Criminal Penalty.--Any person who commits an unlawful act 
as provided in subsection (a) of this section shall be fined up 
to $50,000 or sentenced to up to 3 years imprisonment or both, 
per offense.

Sec. 33308. Actions by States

  (a) In General.--Whenever an attorney general of any State 
has reason to believe that the interests of the residents of 
that State have been or are being threatened or adversely 
affected because any person has violated or is violating 
section 33302 or 33303, the State, as parens patriae, may bring 
a civil action on behalf of its residents in an appropriate 
district court of the United States or the appropriate State 
court to enjoin such violation or to enforce the civil 
penalties under section 33307 or may enforce the criminal 
penalties under section 33307.
  (b) Notice.--The State shall serve prior written notice of 
any civil or criminal action under subsection (a) or (e)(2) 
upon the Attorney General and provide the Attorney General with 
a copy of its complaint, except that if it is not feasible for 
the State to provide such prior notice, the State shall serve 
such notice immediately upon instituting such action. Upon 
receiving a notice respecting a civil or criminal action, the 
Attorney General shall have the right--
          (1) to intervene in such action;
          (2) upon so intervening, to be heard on all matters 
        arising therein; and
          (3) to file petitions for appeal.
  (c) Construction.--For purposes of bringing any civil or 
criminal action under subsection (a), nothing in this Act shall 
prevent an attorney general from exercising the powers 
conferred on the attorney general by the laws of such State to 
conduct investigations or to administer oaths or affirmations 
or to compel the attendance of witnesses or the production of 
documentary and other evidence.
  (d) Venue; Service of Process.--Any civil or criminal action 
brought under subsection (a) in a district court of the United 
States may be brought in the district in which the defendant is 
found, is an inhabitant, or transacts business or wherever 
venue is proper under section 1391 of title 28, United States 
Code. Process in such an action may be served in any district 
in which the defendant is an inhabitant or in which the 
defendant may be found.
  (e) Actions by State Officials.--
          (1) Nothing contained in this section shall prohibit 
        an attorney general of a State or other authorized 
        State official from proceeding in State court on the 
        basis of an alleged violation of any civil or criminal 
        statute of such State.
          (2) In addition to actions brought by an attorney 
        general of a State under subsection (a), such an action 
        may be brought by officers of such State who are 
        authorized by the State to bring actions in such State 
        on behalf of its residents.
                             * * * * * * *

                            DISSENTING VIEWS

    I support the goals of this legislation, but I have serious 
concerns about H.R. 1839, the National Salvage Motor Vehicle 
Consumer Protection Act of 1997.
    The anti-theft goals are laudable. We should definitely be 
doing what we can to prevent ``VIN switching'' and ``Title 
Washing,'' but I think we need to be very careful not to 
preempt state laws which protect consumers.
    Even though significant progress has been made to increase 
the number of cars covered by this bill I still fear that the 
ordinary consumer who purchases a used car will not benefit. 
Already almost every state and the District of Columbia have 
laws on the books defining what is a salvaged vehicle. Some 
states are better than others at protecting consumers and I am 
concerned that this bill will effectively require states to 
rewrite any of their consumer protection laws which use the 
terms ``salvage vehicle,'' and ``rebuilt salvage vehicle'' et 
al. My fear is that this will cause confusion for some people 
who are already familiar with those terms as they are used in 
their states, and that some states will not take the time to 
enact new laws.
    I am also very concerned that as we enter the area of auto 
titling law, which is traditionally under the sole purview of 
the states, that we be very explicit in declaring the 
narrowness of the extent to which we intend to preempt state 
law. My fear is that without specific language to the contrary, 
a federal titling bill could be misinterpreted as a federal 
preemption of all state laws pertaining to the transfer of 
damaged automobiles, and will be used as a defense against 
civil suits in state court. I see no reason that we cannot use 
plain language to state that the bill shall not have any 
preemptory affect on any causes of action available under state 
law.
    Finally, I agree the Motor Vehicle Titling, Registration 
and Salvage Advisory Committee which reported that ``its 
recommendations will not stem the problem of auto theft and 
fraud unless penalties for noncompliance are significant. To 
that end, the [Committee] recommends that: investigative 
authority and sanctions against violators of the [Committee] 
recommendations, once enacted, parallel those currently 
contained in Title IV of the Motor Vehicle Information and Cost 
Savings Act.'' That refers to the federal odometer law which 
has private rights of action with trebled damages, and 
attorney's fees. Without a way for citizens to bring suit the 
bill offers very little deterrence if it can only be enforced 
by the Department of Justice and the state attorney's general, 
and I would point out that the National Associations of 
Attorneys General also recommend private rights of action.

                                                         Ron Klink.