5740 Federal Register / Vol. 74, No. 19 / Friday, January 30, 2009 / Rules and Regulations 

1Brands are descriptive labels regarding the 

status of a motor vehicle, such as ‘‘junk,’’ ‘‘salvage,’’ 

and ‘‘flood’’ vehicles. 

2There are currently 13 states participating fully 

in NMVTIS: Arizona, Florida, Indiana, Iowa, 

Kentucky, Massachusetts, New Hampshire, Nevada, 

Ohio, South Dakota, Virgina, Washington, and 

Wisconsin. Fourteen states are providing regular 

data updates to NMVTIS: Alabama, California, 

Delaware, Georgia, Idaho, Louisiana, Nebraska, New 

Jersey, New York, North Carolina, Pennsylvnia, 

Tennesses, Texas, and Wyoming. Ten states are 

actively taking steps to provide data or participate 

fully: Arkansas, Michigan, Minnesota, Missouri, 

Montaina, New Mexico, Oklahoma, South Carolina, 

Vermont, and West Virginia. See www.NMVTIS.gov 

for a map of current participation status. 

DEPARTMENT OF JUSTICE 

28 CFR Part 25 

[Docket No. FBI 117; AG Order No. 3042– 

2009] 

RIN 1110–AA30 

National Motor Vehicle Title 

Information System (NMVTIS) 

AGENCY: Department of Justice. 

ACTION: Final rule. 

SUMMARY: The National Motor Vehicle 

Title Information System (NMVTIS) has 

been established pursuant to 49 U.S.C. 

30502 and has the participation, or 

partial participation, of at least 36 states. 

The purpose of NMVTIS is to assist in 

efforts to prevent the introduction or 

reintroduction of stolen motor vehicles 

into interstate commerce, protect states 

and individual and commercial 

consumers from fraud, reduce the use of 

stolen vehicles for illicit purposes 

including fundraising for criminal 

enterprises, and provide consumer 

protection from unsafe vehicles. This 

rule implements the NMVTIS reporting 

requirements imposed on junk yards, 

salvage yards, and insurance carriers 

pursuant to 49 U.S.C. 30504(c). This 

rule also clarifies the process by which 

NMVTIS will be funded and clarifies 

the various responsibilities of the 

operator of NMVTIS, states, junk yards, 

salvage yards, and insurance carriers 

regarding NMVTIS. 

DATES: Effective Date: This rule is 

effective March 2, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Alissa Huntoon, 810 7th Street, NW., 

Washington, DC 20531, 202–616–6500, 

www.NMVTIS.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The Anti-Car Theft Act of 1992, 

Public Law No. 102–519, 106 Stat. 3384, 

required the Department of 

Transportation (DOT) to establish an 

information system intended to enable 

states and others to access automobile 

titling information. As part of the AntiCar Theft Act of 1992, DOT was 

authorized to designate a third party to 

operate the system. Since 1992, the 

American Association of Motor Vehicle 

Administrators (AAMVA) has acted in 

the capacity of the operator of the 

system. AAMVA is a nonprofit, tax 

exempt, educational association 

representing U.S. and Canadian officials 

who are responsible for the 

administration and enforcement of 

motor vehicle laws. The requirements of 

the Anti-Car Theft Act of 1992 were 

amended by Public Law 103–272 and 

the Anti-Car Theft Improvements Act of 

1996, Public Law No. 104–152, 110 Stat. 

1384. The Anti-Car Theft Improvements 

Act of 1996 renamed the automobile 

titling system the ‘‘National Motor 

Vehicle Title Information System’’ and 

transferred responsibility for 

implementing the system from DOT to 

the Department of Justice (DOJ). 

Hereinafter, the Anti-Car Theft Act of 

1992 and the revisions made by Public 

Law 103–272 and the Anti-Car Theft 

Improvements Act of 1996, codified at 

49 U.S.C. 30501–30505, are collectively 

referred to as the ‘‘Anti-Car Theft Act’’or 

the ‘‘Act.’’ 

While the overall purpose of the AntiCar Theft Act is to prevent and deter 

auto theft, title II of the Act, which 

authorizes NMVTIS, is intended to 

address automobile title fraud. 

Accordingly, the primary purpose of 

NMVTIS is to prevent various types of 

theft and fraud by providing an 

electronic means for verifying and 

exchanging title, brand, theft, and other 

data among motor vehicle 

administrators, law enforcement 

officials, prospective and current 

purchasers (individual or commercial), 

and insurance carriers.1 Currently, 37 

states are actively involved with 

NMVTIS, representing nearly 75% of 

the U.S. motor vehicle population. 

Specifically, 13 states are participating 

fully in NMVTIS, 14 states are regularly 

providing data to the system, and an 

additional 10 states are actively taking 

steps to provide data or participate 

fully.2 States that participate fully in the 

system provide data to the system on a 

daily or real-time basis and make 

NMVTIS inquiries before issuing a new 

title on a vehicle from out of state and 

preferably before every title verification, 

regardless of its origin or reason. 

Participating states also pay user fees to 

support the system and the services 

provided to the state. 

In 2006, the Integrated Justice 

Information Systems (IJIS) Institute, a 

nonprofit membership organization 

made up of technology companies, was 

asked by Department of Justice’s Bureau 

of Justice Assistance (BJA) to conduct a 

full review of the NMVTIS system 

architecture to identify any 

technological barriers to NMVTIS 

implementation and to determine if any 

potential cost savings was available 

through emerging technology. The IJIS 

Institute report found that ‘‘the NMVTIS 

program provides an invaluable benefit 

to state vehicle administrators and the 

public community as a whole. 

Advantages of the program include 

improving the state titling process, as 

well as providing key information to 

consumers and law enforcement 

agencies.’’ In addition to this study, the 

Government Accountability Office 

(GAO) also found NMVTIS to hold 

benefit potential for states, and a private 

cost-benefit study also determined that 

NMVTIS could provide benefits in the 

range of $4 to $11 billion dollars 

annually if fully implemented. NMVTIS 

and its benefits to states, law 

enforcement, consumers, and others 

have been widely touted by motor 

vehicle or auto-industry organizations 

including AAMVA and the National 

Automobile Dealers Association 

(NADA), by law enforcement 

organizations such as the International 

Association of Chiefs of Police and the 

National Sheriffs Association, by the 

North American Export Committee 

(NAEC), and by the International 

Association of Auto Theft Investigators. 

NMVTIS’s benefits have also been 

recognized by national consumer 

advocacy organizations, and by 

industry-affiliated groups including the 

National Salvage Vehicle Reporting 

Program and many others, as identified 

in the public comments. 

NMVTIS is a powerful tool for state 

titling agencies. Fully participating state 

titling agencies are able to use NMVTIS 

to prevent fraud by verifying the motor 

vehicle and title information, 

information on brands applied to a 

motor vehicle, and information on 

whether the motor vehicle has been 

reported stolen—all prior to the titling 

jurisdiction issuing a new title. In order 

to perform this check, these states run 

the vehicle identification number (VIN) 

against a national pointer file, which 

provides the last jurisdiction that issued 

a title on the motor vehicle and requests 

details of the motor vehicle from that 

jurisdiction. Using a secure connection, 

states then receive all required 

information or the complete title of 

record from the state of record. States 

can then use this information to verify 

information on the paper title being 

presented. 

Verification of this data allows fully 

participating states to reduce the 

issuance of fraudulent titles and reduce 


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odometer fraud. Once the inquiring 

jurisdiction receives the information, a 

state is able to decide whether to issue 

a title. For states fully participating 

through integrated, online access, if a 

new title is issued, NMVTIS notifies the 

last titling jurisdiction that another 

jurisdiction has issued a title. The old 

jurisdiction then can inactivate its title 

record. This action allows fully 

participating jurisdictions to identify 

and purge inactive titles on a regular 

basis and eliminates the need for these 

agencies to conduct these processes 

manually. This service provides a 

measurable benefit to states in terms of 

cost savings. In 2007, over 18.4 million 

title-update transactions were initiated 

and over 45 million messages were 

generated via NMVTIS, which allows 

states to work and communicate 

securely and to perform electronic title 

transactions between states. 

NMVTIS also allows fully 

participating states to ensure that brands 

are not lost when a motor vehicle travels 

from state to state. As noted above, 

brands are descriptive labels regarding 

the status of a motor vehicle. Many 

brands, such as a flood vehicle brand, 

indicate that a motor vehicle may not be 

safe for use. Unfortunately, motor 

vehicles with brands on their titles can 

have their brands ‘‘washed’’ (i.e., 

removed ) from a title if the motor 

vehicle is retitled in another state that 

does not check with the state that issued 

the previous title and with other states 

that may have previously issued titles 

on the vehicle to determine if it has any 

existing brands not shown on the paper 

title. Because NMVTIS keeps a history 

of brands applied by any state to the 

motor vehicle at any time, it protects 

individual and corporate consumers by 

helping ensure full disclosure so that 

purchasers are not defrauded or placed 

at risk by purchasing an unsafe motor 

vehicle. Currently, there are 

approximately 300,000,000 VINs in 

NMVTIS with over 40,000,000 brands 

included. NMVTIS also prevents ‘‘clean 

title’’ vehicles that are actually a total 

loss or salvage from being used to 

generate a paper title that is later 

attached to a stolen vehicle that is 

‘‘cloned’’ to the destroyed ‘‘clean title’’ 

vehicle. Criminal enterprises seek these 

‘‘clean title’’ vehicles, which are low 

cost to them (because they are destroyed 

or salvage), because it increases their 

return when they sell a cloned stolen 

vehicle. It has been noted that criminal 

profits in such a case can more than 

quadruple if a ‘‘clean title’’ vehicle is 

used for cloning. Even worse, because 

these cloned vehicles are able to get into 

the titling systems of the nonparticipating states, they often continue 

to be sold to new and unsuspecting 

owners. There have been cases 

involving car dealers who had 

purchased stolen cloned vehicles and 

resold them to individual consumers. 

NMVTIS also provides protections from 

other types of related theft and fraud 

that ultimately place lives at risk and 

cost states, consumers, and the private 

sectors billions of dollars each year. The 

proceeds from these illicit activities 

support additional crime and fraud and 

even serious and violent crime. For 

more information on the benefits of 

NMVTIS, visit www.NMVTIS.gov. 

Discussion of Comments 

On September 22, 2008, the 

Department of Justice published a 

proposed rule to implement various 

requirements concerning NMVTIS. See 

National Motor Vehicle Title 

Information System (NMVTIS), 73 FR 

54544 (Sept. 22, 2008). The rule 

proposed the imposition of reporting 

requirements on junk yards, salvage 

yards, and insurance carriers. In 

addition, the rule clarified the funding 

process for NMVTIS and the 

responsibilities of the operator of 

NMVTIS, states, junk yards, salvage 

yards, and insurance carriers. The 

comments and the Department’s 

responses are discussed below: 

1. General Comments 

Comment: Several commenters 

suggested that NMVTIS will deter 

various types of crime and fraud and 

suggested that since the passage of the 

Anti-Car Theft Act, the types of crime 

and fraud, as well as the methods, have 

evolved. These commenters noted that 

the purpose of NMVTIS remains to 

address these types of crime and fraud. 

Response: DOJ agrees that since the 

passage of the Anti-Car Theft Act, 

crimes and crime techniques have 

evolved. DOJ, therefore, has updated the 

stated purpose of NMVTIS to be more 

reflective of the crime and expansive 

direct and indirect fraud NMVTIS was 

intended to address and is addressing 

today. 

Comment: The American Salvage Pool 

Association (ASPA) commented that 

junk and salvage yards have an 

exemption for reporting where and 

when a non-stolen verification is 

obtained under 49 U.S.C. 33110, which 

authorizes a system that has never been 

implemented. The ASPA commented 

that this exemption ‘‘is telling, however, 

in linking NMVTIS’[s] statutory purpose 

to theft prevention, as opposed to brand 

information.’’ 

Response: In addition to the fact that 

title II of the Anti-Car Theft Act 

addresses fraud, it is clear that brand 

information can be directly linked to 

vehicle theft in addition to fraud. Law 

enforcement investigations have 

repeatedly shown that ‘‘clean title’’ total 

loss vehicles are a preferred commodity 

among car cloning and car theft rings, as 

they bring a higher return on 

investment. The Anti-Car Theft Act 

exemption, which is in 49 U.S.C. 33111, 

provides that junk and salvage yards are 

not required to report on an automobile 

if they are issued a verification under 49 

U.S.C. 33110 stating that the automobile 

or parts from the automobile are not 

reported as stolen. 

2. Effectiveness 

Comment: Several submissions 

questioned the effectiveness of NMVTIS 

in eliminating or preventing fraud and 

theft. Several of these commenters 

suggested the need for quantitative 

proof of the system’s effectiveness 

before the law should be followed. At 

the same time, however, several 

submissions recognized the value of 

NMVTIS. As one commenter noted, 

‘‘NMVTIS would undoubtedly cut down 

on the number of rebuilt wreck fraud 

cases.’’ And the State of Texas 

Department of Transportation noted that 

‘‘[t]he system provides numerous 

obvious benefits to titling agencies, law 

enforcement[,] and vehicle sellers, as 

well as consumer protection to the 

buying public.’’ 

Response: The Anti-Car Theft Act’s 

participation requirements were 

established based on analyses presented 

at the time of the bill’s introduction and 

passing. Further, an extensive costbenefit analysis and a Government 

Accountability Office study both have 

independently determined that NMVTIS 

will produce a significant public benefit 

that greatly exceeds the costs of 

implementing the program. The costbenefit study found that the system is 

only as effective as the number of 

vehicles represented in the system. Nonparticipating states create ‘‘loopholes’’ 

where brands can be washed, allowing 

further fraud in any state—participating 

or not. Discussions with private-vehiclehistory-report providers and ongoing 

law enforcement investigations at the 

state, local, and federal levels have 

shown that non-participating states are 

targeted for exploitation because their 

vehicle titling information is not 

immediately shared with other states 

and because they have no efficient 

ability to inquire with all other states 

that may have previously titled the 

vehicle. 

Feedback from participating states 

points to other positive outcomes of the 

program. One state reports a 17% 


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decrease in motor vehicle thefts; another 

reports a 99% recovery rate on vehicles 

identified as stolen; three states have 

identified cloned vehicles by working 

together, prior to issuing new titles; and 

another state reports cracking a car theft 

ring responsible for cloning more than 

250 cars worth $8 million. Aside from 

these results, it is clear that if all states 

comply with the Anti-Car Theft Act 

requirements, brand washing in the way 

it is most commonly conducted today 

will be eliminated because there is no 

other way to title a vehicle other than 

going through a state titling process. The 

same goes for vehicle cloning, which 

would be virtually eliminated if every 

state participated as required. 

Moreover, Experian Automotive 

reported that in the first six months of 

2008 alone, there have already been 

more than 185,000 titles that initially 

were branded in one state, and were 

then transferred and re-titled in a 

second state in a way that resulted in a 

purportedly clean title. Given all these 

facts, we can be sure that NMVTIS will 

be effective in eliminating this type of 

fraud, preventing a significant number 

of crimes, and potentially saving the 

lives of citizens who would otherwise 

purchase unsafe vehicles. 

In addition to the system’s 

documented value in reducing theft and 

fraud in protecting consumers, the 

system also has been shown to create 

greater efficiencies within the titling 

process when the inquiry and response 

are integrated into the states’ titling 

processes. 

Comment: NAEC commented that 

‘‘the effectiveness [of NMVTIS] can only 

be truly measured [when] all 

jurisdictions are participating, because 

of the holes that are currently in the 

system due to lack of full participation.’’ 

The State of California Department of 

Motor Vehicles seemingly agreed with 

this comment when it noted that ‘‘these 

beneficial outcomes can only be 

achieved when all 50 states and the 

District of Columbia are participating.’’ 

The Virginia Department of Motor 

Vehicles commented that ‘‘the system 

provides a great value to participating 

states, and that value will exponentially 

increase as each jurisdiction begins fully 

participating.’’ 

Response: DOJ agrees in part with 

these assessments. As discussed above, 

partial participation creates loopholes 

that criminal organizations exploit, and, 

therefore, measuring the full benefit of 

a comprehensive NMVTIS is difficult 

without participation by all states. 

However, NMVTIS provides significant 

benefits to participating states even 

when state participation is not at 100%. 

Comment: One commenter asked if 

the information would have much 

‘‘practical utility,’’ or whether it would 

only serve as further documentation of 

a market that is only broadly related to 

secondary criminal enterprises. The 

commenter further noted that ‘‘the rule 

will only spur increased sophistication 

of organized crime. This increased 

sophistication must be balanced against 

the proposed benefits from the small 

contraction in the secondary criminal 

market that is assumed to occur under 

this rule. One of the benefits of the 

proposed rule is the documentation of 

salvage pool sales. But this benefit is 

limited: it will only require criminals to 

go through more steps, steps that require 

increased organizational skills. Hence, 

although the rule may push some 

criminals out of the market overall (the 

less sophisticated and organized), it will 

also indirectly spur increased 

sophistication and organization of the 

surviving criminal organizations. 

Although one of the primary goals of 

NMVTIS is theft deterrence, there is no 

data to support the conclusion that this 

portion of the criminal market will be 

affected by the proposed rule.’’ 

Response: DOJ disagrees with these 

comments. Substantial evidence, 

statements, and documentation indicate 

that NMVTIS will impact vehicle theft 

and fraud. 

Comment: Several commenters, 

including law enforcement, consumer 

advocates, industry associations, and 

state motor vehicle administrators, 

including California’s, noted that 

NMVTIS is needed and will be effective 

in addressing the threats of auto theft, 

cloning, and fraud, and in providing 

protection for consumers against fraud. 

Response: DOJ agrees with these 

comments and notes that the expected 

benefits and positive outcomes of 

NMVTIS have been confirmed not only 

by government and private research, but 

also by multiple representatives of every 

stakeholder community affected by the 

system, including state titling agencies, 

state and local law enforcement, 

consumers, insurance carriers, and junkor salvage-yard operators. 

Comment: The NAEC commented that 

law enforcement successes to date can 

validate the benefits and costs 

associated with NMVTIS and that ‘‘the 

NAEC is solid in its belief that NMVTIS 

is a fundamentally sound approach to 

‘title washing,’ title fraud, vehicle 

theft[,] and public safety related to the 

‘branding’ of un-road worthy vehicles in 

this Country.’’ The NAEC provided data 

from one state that uses NMVTIS and, 

as a result, has identified and recovered 

hundreds of stolen vehicles. The NAEC 

further commented that to suggest that 

the system should be cancelled 

‘‘demonstrates a lack of understanding 

[of] the magnitude of the vehicle theft 

problem in North America and Public 

Safety issues surrounding ‘branded’ 

vehicles.’’ 

Response: DOJ agrees with the 

NAEC’s assessment of NMVTIS. 

Comment: The State of Illinois Motor 

Vehicle Administration commented that 

other services have become available 

since the Anti-Car Theft Act was passed 

and that NMVTIS should ‘‘be put on 

hold’’ while an analysis on the need for 

NMVTIS can be conducted. The Maine 

Bureau of Motor Vehicles suggested that 

NMVTIS was not needed because 

‘‘consumers have other options for 

checking vehicle title status prior to 

purchase.’’ 

Response: While other fee-based 

options for checking vehicle title status 

are available for consumers, the ability 

of consumers to check NMVTIS for 

vehicle title status is required by federal 

law and a federal court order. When 

fully implemented, NMVTIS will 

provide assurances that no other option 

can provide—complete and timely 

information on all vehicles in the U.S. 

The Anti-Car Theft Act provided no 

flexibility for states, insurance carriers, 

or junk or salvage yards to filter 

information shared with NMVTIS; thus 

NMVTIS will be the most-reliable 

source of information once fully 

implemented. Several providers of 

vehicle history information have agreed 

to make NMVTIS data available as a 

way of enhancing their products, 

demonstrating that NMVTIS does have 

unique value. DOJ is not in a position 

to put NMVTIS on hold, as recent 

litigation was based on the complaint 

that DOJ had waited too long to issue 

NMVTIS regulations. A court has 

ordered DOJ to publish these regulations 

by January 30, 2009. See Public Citizen, 

Inc. v. Mukasey, No. 3:08–cv–00833– 

MHP, 2008 WL 4532540 (N.D. Cal. Oct. 

9, 2008). 

Comment: One commenter noted that 

‘‘it is beyond the scope of the NMVTIS 

regulations to reform the process by 

which insurers assign title designations; 

however having the sales reported in a 

timely fashion, and by including 

appropriate identification of both 

international, domestic (out of state) and 

domestic (in state) buyers, it will help 

the Law Enforcement Community in its 

effort to control crime and protect the 

public.’’ 

Response: It is beyond the scope of 

NMVTIS and DOJ’s intentions to alter 

insurance carrier policies and 

procedures in terms of title 

designations. While transfers of vehicles 

from insurance carriers to others would 


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likely be captured in the NMVTIS 

reporting process due to subsequent 

reporting by junk and salvage yards, it 

is unlikely that the names of buyers will 

be reported or captured in the system 

because this is not a required data field. 

Requiring the name of such buyers is of 

significant value to law enforcement for 

preventing and investigating automobile 

theft and fraud. Additionally, as is 

pointed out elsewhere in these 

comments, establishing a ‘‘chain of 

possession or custody’’ is important for 

effective and efficient law enforcement 

investigations. 

Comment: One commenter noted that 

‘‘[a]ccording to Experian Automotive, 

(PR Newswire August 25, 2008 

Experian, Schaumburg, IL), in the first 

6 months of 2008 alone, there have 

already been more than 185,000 titles 

that initially were branded in the first 

state, and were then transferred and retitled in a second state in a way that 

resulted in a ‘clean’ title. This situation 

cannot be addressed without much 

stronger controls and full reporting. 

There is a great deal of abuse of the title 

system and we regularly observe 

severely damaged units that have been 

given clean title designations to vehicles 

that have massive damage. As a result, 

criminals regularly buy these vehicles 

for the paper, and steal a like vehicle 

and engage in cloning or VIN 

swapping.’’ 

Response: Once all states comply with 

the law, NMVTIS will protect against 

these types of abuses by creating a brand 

history (a record of the various brands 

associated with a particular VIN) for 

every vehicle, which will prevent a 

future title-issuing agent from being 

unaware of a vehicle’s brand history and 

will eliminate the possibility of a 

vehicle being titled in more than one 

state (a common occurrence today). 

Comment: Maine Bureau of Motor 

Vehicles commented that Maine 

‘‘already has procedures in place to 

check for stolen status prior to issuing 

a title and for carrying forward out-ofstate brands.’’ 

Response: NMVTIS is designed to 

provide more than a simple stolenvehicle check. Further, neither carrying 

forward out-of-state brands based on 

paper titles presented, nor checking the 

paper documentation against a thirdparty data provider, eliminates brand 

washing. Washed brands may not 

appear on paper or in third-party 

databases. Because states are required to 

report title transactions to NMVTIS and 

to check NMVTIS prior to issuing a new 

title, NMVTIS is the only system that 

can eliminate such brand washing when 

fully implemented. No state, except 

those participating in NMVTIS when 

fully implemented, has any ability to 

fully verify brand histories and carry 

forward out-of-state brands without 

manually contacting every state and the 

District of Columbia prior to issuing a 

new title. 

Comment: One commenter noted that 

‘‘the benefits of NMVTIS are also not 

illogical simply because concrete figures 

do not exist concerning its limited 

implementation.’’ ‘‘Given NMVTIS’[s] 

[implementation] status, any figures 

outlining the benefits would prove 

highly conservative even if found. It is 

not difficult to imagine though that 

illegal reselling of salvaged vehicles 

takes advantage [of] reporting gaps by 

moving across state lines. Statistics 

concerning such operations are welldocumented even if the benefits of 

NMVTIS are not.’’ ‘‘Being able to verify 

the success and results of NMVTIS thus 

depends critically on the provision of 

information from all states.’’ 

Response: DOJ agrees with this 

comment. 

Comment: The Missouri Department 

of Revenue commented that the system 

is only as good as the number of 

jurisdictions participating, and in light 

of current participation levels, the state 

is expending resources for data that may 

not be inclusive or accurate. 

Response: As of December 2008, 

NMVTIS includes nearly 75% of the 

U.S. vehicle population. At the same 

time, several states are actively working 

towards participation in NMVTIS, 

which will take NMVTIS closer to 100% 

participation. With the inclusion of 

insurance and junk- and salvage-yard 

information, and given that many states 

report to NMVTIS in ‘‘real time,’’ 

NMVTIS is likely to be as inclusive as 

any vehicle title history database 

available, even before 100% state 

participation. As for accuracy, the 

system currently includes only data 

from state motor vehicle 

administrations, and DOJ is aware of no 

errors in NMVTIS. As stated in this rule, 

procedures and safeguards will be put 

into place to ensure identification and 

correction of any errors identified. Nonparticipating states, on the other hand, 

are expending their resources based on 

fraudulent information when they issue 

titles in many situations. 

3. Need and Purpose 

Comment: One commenter asked ‘‘To 

what extent is consumer protection and 

the prevention of fraud in the secondary 

car market domestically and 

internationally a high priority for the 

agency?’’ 

Response: The prevention of fraud 

that affects U.S. citizens, whether it be 

here or abroad, and consumer protection 

are priorities for DOJ and for NMVTIS. 

DOJ’s Strategic Plan includes in its 

second goal ‘‘Strategic Objective 2.5: 

Combat public and corporate 

corruption, fraud, economic crime, and 

cybercrime.’’ U.S. Department of Justice 

Strategic Plan, Fiscal Years 2007–2012. 

Comment: One commenter noted that 

states often sell their vehicle history 

records to private, third-party 

organizations who then resell the data. 

The commenter requested that the final 

rule spell out that the states own the 

data and that the operator of the system 

may not resell the data to other 

providers without authorization of the 

states. 

Response: While NMVTIS may 

contain a subset of data on vehicles 

titled within the U.S., it does not 

include all of the information a state 

motor vehicle administration may 

possess. DOJ agrees that the statemaintained vehicle history databases are 

the province of the states, and that the 

intent of the Anti-Car Theft Act was not 

to create a database of information for 

bulk resale. The operator of the system, 

therefore, will not resell the NMVTIS 

database in its entirety to anyone. Two 

key goals of the Anti-Car Theft Act, 

however, are consumer access to the 

data and a self-funded system. For these 

reasons, the operator will be allowed to 

charge consumers for use. 

Comment: The State of Illinois motor 

vehicle administration questioned how 

NMVTIS will interface with law 

enforcement data systems within the 

state that are used to identify and ‘‘flag’’ 

stolen vehicles. 

Response: NMVTIS is not expected to 

‘‘interface’’ with law enforcement 

systems within the state. Information in 

NMVTIS related to a vehicle’s ‘‘theft 

status’’ or history emanates from one of 

two places—state brands and the theft 

file of the National Insurance Crime 

Bureau (NICB), which is derived from 

the FBI’s National Crime Information 

Center (NCIC). Law enforcement 

systems will be able to link or connect 

to the NMVTIS law enforcement access 

site, however, which will include all 

NMVTIS information without 

restriction. NCIC will always be the 

primary repository of active theft files 

for law enforcement. Stolen vehicle 

information in NMVTIS is provided 

only for state titling purposes for those 

states that cannot access NCIC or statebased law enforcement systems. 

4. Prospective Purchaser Inquiries 

Comment: The Idaho Transportation 

Department commented that the 

proposed rules included several data 

elements in the requirement for 

prospective-purchaser inquiry responses 


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or consumer access reports that would 

effectively eliminate the need for an 

actual state record to be requested by a 

consumer or prospective purchaser, 

thereby reducing state revenues realized 

from the sale of motor vehicle records. 

Response: At a minimum, NMVTIS 

will provide the following pieces of 

information in response to an inquiry, if 

that data is present in NMVTIS: (a) The 

current state of title; (b) the brand 

history of the vehicle; (c) the latest 

reported odometer reading; and (d) 

information about the vehicle’s reported 

appearance in the inventory of a 

covered junk or salvage yard or on any 

insurance carrier determination of total 

loss related to that vehicle. There are 

several reasons, however, why states are 

likely to continue to experience demand 

for their full title records. First, states 

often possess additional information 

that is not anticipated to be within 

NMVTIS but that is of interest to many 

purchasers. This information may 

include ownership information, lienholder information, registration 

information, safety-inspection data, and 

other details that the states may have 

but are not required to report to 

NMVTIS. Second, by providing 

consumers with the current state of title, 

NMVTIS actually serves as a nationwide 

pointer that will result in an increase in 

requests for state records. And DOJ will 

direct the operator to ensure that all 

consumer access portal providers 

provide consumers with a link to the 

state’s site or to the state’s designated 

vehicle history report access point, 

enabling consumers to purchase the full 

state record. Third, states are eligible to 

become portal providers, thereby 

capturing an opportunity to increase 

revenues by providing access to 

NMVTIS data and to the states’ records 

for a state-determined fee. 

Comment: The State of Nevada 

Department of Motor Vehicles 

commented that ‘‘Nevada will not allow 

the unauthorized release of the title data 

we send to NMVTIS. Nevada statutes 

limit what data can be released and to 

whom. Will AAMVA have the 

capability and assume the responsibility 

of prescreening those who want to 

access Nevada title data to ensure the 

disclosure complies with Nevada 

statutes? Will AAMVA have the 

capability of collecting and forwarding 

the fees currently charged for accessing 

and receiving Nevada’s title records 

without Nevada becoming a third 

party?’’ 

Response: Neither NMVTIS nor the 

operator will be releasing any state’s 

vehicle title records. The information 

that will be shared via NMVTIS is not 

a state’s vehicle title record and is 

generated from the index maintained by 

NMVTIS, with limited information on 

the identified vehicle, as authorized and 

directed by the Anti-Car Theft Act. This 

federal statute provides the necessary 

authorization and direction concerning 

what information will be shared, how it 

will be shared, and to whom it can be 

shared. After providing the NMVTIS 

information in response to a consumer 

inquiry, NMVTIS, through the thirdparty portal providers, will offer 

consumers the ability to be directed to 

the state of record’s Web site in order to 

purchase the state’s full vehicle title 

record from the current state of record. 

Once that ‘‘handoff’’ occurs, any 

decision by consumers to purchase the 

state’s title record will be governed by 

applicable state statutes, policies, and 

processes, and by the state’s vehiclehistory-report provider’s policies and 

processes. NMVTIS prospective 

purchaser inquiry was designed in this 

way in an effort to point consumers to 

state Web sites for state vehicle title 

histories from that state should they be 

desired and available, thus enabling 

consumers to purchase the full record 

and generating revenues for the states. 

Comment: Several motor vehicle 

administration agencies and other 

organizations commented that if 

personal information is released by 

NMVTIS to non-government 

organizations, it may be in conflict with 

the provisions of the Driver’s Privacy 

Protection Act of 1994 (DPPA). Several 

of these commenters recommended that 

this information only be available to law 

enforcement or government 

organizations, while others indicated 

that they would be prohibited from 

sharing personal information with 

prospective purchasers. 

Response: According to the DPPA, 18 

U.S.C. 2721(b)(2), permitted uses of 

information protected by the DPPA 

include ‘‘[f]or use in connection with 

matters of motor vehicle or driver safety 

and theft; motor vehicle emissions; 

motor vehicle product alterations, 

recalls, or advisories; performance 

monitoring of motor vehicles, motor 

vehicle parts and dealers; motor vehicle 

market research activities, including 

survey research; and removal of nonowner records from the original owner 

records of motor vehicle 

manufacturers.’’ In addition, 18 U.S.C. 

2721(b)(3) provides additional 

authorizations ‘‘[f]or use in the normal 

course of business by a legitimate 

business or its agents, employees, [or] 

contractors.’’ These exceptions include 

sufficient authorization for states to 

provide access to personal identifying 

information, and many commenters 

agreed. Nonetheless, NMVTIS includes 

personal information primarily for the 

benefit of law enforcement agencies, 

including governmental regulatory and 

compliance-monitoring agencies that 

may not have immediate access to such 

data or to state motor vehicle-history 

files. NMVTIS will not provide personal 

information in the NMVTIS central file 

to individual prospective purchasers 

and may not provide access to any other 

type of user without securing DOJ 

approval of such access. 

Comment: Several commenters, 

notably from the consumer-advocacy 

community, encouraged DOJ to 

‘‘minimize, to the greatest extent 

possible[,] any cost to consumers for 

accessing the data base.’’ 

Response: By statute, the fees 

NMVTIS charges will not be more than 

the costs of operating the system. 

Although NMVTIS does not control 

what portal providers will charge for 

consumer access to the data, by making 

that data available to all potential portal 

providers at the same price, it will be 

difficult for any provider to charge too 

high a premium for access to that data. 

Comment: One commenter noted that 

NMVTIS will make it possible for users 

to understand either what a state-issued 

brand (i.e., statement of the condition or 

prior use of a vehicle) means or to 

which state they need to go to 

understand the brand’s meaning. ‘‘Even 

if in some circumstances NMVTIS can 

say nothing more than ‘branded in 

jurisdiction X,’ at least the NMVTIS user 

will know which [state] jurisdiction to 

consult.’’ 

Response: Because neither the AntiCar Theft Act nor NMVTIS creates 

universal brands, DOJ will direct the 

NMVTIS operator to ensure that 

consumer-access portal providers 

provide a link to brand definitions and 

any available related explanations, so 

that consumers can be aware of how 

brands may be defined. One of 

NMVTIS’s benefits is that it will 

identify which states have branded a 

vehicle, informing consumers of which 

jurisdiction to consult for further 

information. 

Comment: The State of Alaska 

commented that neither DOJ nor the 

NMVTIS operator should be permitted 

to discount transaction fees for volume 

purchasers. This commenter stated that 

not discounting the price will maximize 

revenue collected to offset NMVTIS 

operational costs, resulting in reduced 

rates charged to the states. 

Response: The volume discounts 

established by the current operator have 

been more effective in securing 

consumer-access portal providers than 

the non-discounted rates. DOJ will 

continue to monitor the fee structure to 


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ensure that it is effective in securing 

participating providers without 

increasing reliance on state fees. Fees 

generated through the portal providers 

will offset the financial impact on states. 

Comment: One commenter noted that 

the NMVTIS prospective-purchaser 

inquiry is redundant of similar services 

that already exist. 

Response: A significant number of 

consumer advocacy, law enforcement, 

and other organizations submitted 

comments arguing that NMVTIS’s 

prospective-purchaser inquiry is not 

redundant with existing services. For 

example, NMVTIS receives certain state 

data more frequently than some of the 

third-party databases, and the data 

NMVTIS receives includes information 

that some of the third-party databases 

do not have. 

Comment: The Institute of Scrap 

Recycling Industries, Inc. (ISRI) argued 

that the law does not give DOJ the 

authority to expand NMVTIS data 

collection to further the interests of a 

particular group of stakeholders. The 

ISRI expressed concern that certain 

stakeholders would promise smooth and 

easy implementation of the rule if DOJ 

were to demand collection of additional 

data for NMVTIS. 

Response: No individual or entity has 

made such claims or promises, and DOJ 

has not expanded the scope of data to 

be collected beyond that which was 

intended or demonstrated to be 

necessary to accomplish the program’s 

goals as set forth in statute. 

5. Privacy 

Comment: One commenter noted that 

‘‘[t]here are provisions in law in regards 

to privacy of individual identity that do 

not appear to be satisfactorily addressed 

in this document.’’ Another commenter 

noted that it will not send any names to 

NMVTIS because names do not validate 

a title and because of concerns over 

compliance with the DPPA. The 

Virginia Department of Motor Vehicles 

commented that NMVTIS was intended 

as a pointer system, and it is not 

necessary for that pointer system to 

include all data fields, particularly 

private information. AAMVA also 

recommended against requiring owner 

name in the NMVTIS central file for 

privacy and cost reasons. 

Response: DOJ takes these concerns 

very seriously and agrees that privacy 

interests must be protected. While 

names may not be needed to validate a 

title, names are relevant and necessary 

from a law enforcement perspective, 

and in certain other situations. To 

ensure the protection of privacy, 

however, DOJ has amended the rule to 

provide that no privacy fields shall be 

available without DOJ approval to any 

NMVTIS user, other than state-titling, 

law enforcement, or other government 

agency. Additionally, the operator shall 

ensure that no individual prospective 

purchaser has access to any personal 

information. DOJ will require that the 

operator of NMVTIS have an approved 

privacy policy in place that describes 

how the operator will ensure adequate 

privacy protections, consistent with the 

DPPA and other relevant statutes. 

Comment: NAEC noted that data 

privacy fields should be available for 

law enforcement purposes. 

Response: DOJ agrees with this 

comment. 

Comment: The Automotive Recyclers 

Association (ARA) and ISRI both 

emphasized that confidential business 

information, such as the number and 

type of automobiles processed by 

individual junk and salvage yards in a 

given period of time, the sources of 

those vehicles, and related information, 

should not be released to the public or 

other data providers. 

Response: The operator will not 

disseminate this type of information to 

any non-governmental entity or 

individual, and this information will 

not be available to prospective 

purchasers. DOJ will closely monitor 

this aspect of the system to ensure that 

access to sensitive or personal data only 

proceeds with DOJ approval. 

Comment: Several commenters 

requested clarification in the final rule 

on any liability or immunity for 

providing data to NMVTIS as the AntiCar Theft Act requires. 

Response: The Anti-Car Theft Act 

grants certain immunity for those 

reporting data to the system. The scope 

of this immunity is described in the Act 

at 49 U.S.C. 30502(f) and does not 

require clarification. 

Comment: Several commenters 

recommended maintaining provisions 

for accessing personal information to 

qualified DPPA commercial consumers, 

so that entities that currently work with 

the states to access this information 

could continue to do so, which would 

benefit the states and NMVTIS. 

Response: Providing continued access 

to these entities may facilitate effective 

and efficient service to the states, but 

such access may only occur with DOJ 

approval, and may also require 

compliance with state application and 

certification processes and procedures. 

In most cases, these entities will only 

use NMVTIS as a pointer to connect 

with and access the state’s data, 

including personal information, if the 

state provides for that access. 

6. Timely Reporting 

Comment: Several commenters, 

including several national consumeradvocacy organizations, requested that 

dispositions by insurance, junk, or 

salvage sales to other entities be 

reported at the time of the sale and 

include the identity of the buyer, which 

would support law enforcement 

investigations into fraud and theft. The 

National Salvage Vehicle Reporting 

Program also commented that salvage 

pools should be required to report sales 

within one business day of the sale in 

order to reduce fraud and theft. 

Response: The reporting of 

dispositional information is critical and 

needs to be timely, but the DOJ cannot 

require that the reporting be anything 

other than monthly in accordance with 

the requirements of the Anti-Car Theft 

Act. DOJ has added a requirement for 

such entities to report the name of the 

primary buyer of such vehicles. 

Comment: ARA and ISRI commented 

that junk- and salvage-yard operators 

have an interest in reporting efficiency 

and recommended that such entities be 

permitted to report the ultimate 

intended disposition of the vehicle at 

the time of initial reporting. ASPA also 

reported that requiring an entity to 

continuously report that a vehicle is in 

its inventory is inefficient and pointless. 

Response: In cases where the ultimate 

disposition is known with certainty, 

junk- and salvage-yard operators now 

will be permitted to report disposition 

in their initial report. The reporting 

entity is responsible for ensuring that 

the vehicle is disposed of in the manner 

reported or for filing an updated report 

to account for a different disposition. In 

response to concerns of reporting 

inefficiency, DOJ notes that entities 

report once when the vehicle enters the 

inventory and are only required to 

report again on that vehicle if they need 

to update the record. Should the 

disposition be known at the time of 

initial reporting (e.g., ‘‘sale’’), the entity 

would only be reporting once on each 

vehicle. 

Comment: One state motor vehicle 

administration and other commenters 

asked that insurance carriers report 

more frequently. That state motor 

vehicle administration noted that ‘‘if a 

vehicle is damaged on the 5th day of the 

month and the insurance carrier has 

already sent [its] file for the month, the 

state will not know of the damage until 

the following month’s update.’’ Several 

commenters representing nearly every 

stakeholder group noted that it was 

important for the reporting into 

NMVTIS to be timely, ideally in ‘‘real 

time.’’ Experian Automotive commented 


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that a monthly reporting requirement 

would be slower than the current 

industry practice for insurers. 

Response: The 16-year-old language of 

the Anti-Car Theft Act is no longer 

consistent with business practices in an 

electronic age. Nonetheless, the 

language of the Anti-Car Theft Act 

provides no flexibility with regard to 

this reporting requirement. DOJ does 

strongly encourage, however, that all 

reporters provide data to the system as 

quickly as possible, preferably within 24 

hours of acquisition, determination, or 

other reporting trigger. DOJ expects to 

highlight such reporting efficiencies and 

stakeholder participation on its official 

NMVTIS site, www.NMVTIS.gov. 

7. Third-Party Reporting and Reporting 

Exceptions 

Comment: Two commenters argued 

that an exception allowing junk- and 

salvage-yard reporting to occur through 

a state titling agency was flawed. One of 

these commenters suggested that all 

junk and salvage yards should be 

required to report directly into NMVTIS. 

The NADA also commented that 

allowing this exemption would only 

serve to create a loophole, particularly 

in cases of conflicting definitions among 

the states and between states and the 

Anti-Car Theft Act. Instead, NADA 

suggested allowing an exemption in 

cases where an insurance carrier reports 

to a third party that has no definitional 

restrictions, such as the NICB, that can 

transmit the information to NMVTIS 

without concern for conflicting 

definitions. 

Response: While DOJ will take steps 

to ensure data integrity and quality, it 

would be unreasonable to prevent thirdparty reporting. Ultimately, insurance 

carriers and junk and salvage yards are 

responsible for their compliance with 

the Act, including the reporting of 

required information. These reporters 

must ensure that they are compliant 

with the reporting requirements for 

every vehicle handled. If such reporters 

cannot be certain of a third party’s 

ability to provide the required 

information into NMVTIS, the reporter 

must report through a different thirdparty provider. Additionally, certain 

states require this reporting, and 

therefore, a duplicate reporting structure 

would continue to exist even if DOJ did 

not allow junk or salvage yards to report 

through states. For purposes of 

clarification, however, the Anti-Car 

Theft Act does not provide a specific 

exemption for insurance carriers to 

report through states, as it does for junkand salvage-yard operators. Instead, DOJ 

has provided an exemption for 

insurance carriers to report to NMVTIS 

through an identified third party that is 

approved by the system operator. DOJ 

and the operator have attempted to 

identify potential third parties that can 

report to NMVTIS who already receive 

this type of information from insurance 

carriers and junk- and salvage-yard 

operators. 

Comment: ARA commented that 

pursuant to the Act, ‘‘junk and salvage 

yard operators are not required to report 

on a vehicle when they are issued a 

verification stating that the automobile 

or parts from the automobile are not 

reported as stolen.’’ ARA argued against 

the exemption’s implement on the 

grounds that the exemption is 

‘‘completely unworkable’’ without time 

limits on the verification and other 

controls, and because the exemption 

creates a ‘‘significant loophole that 

could foster additional illegal activity.’’ 

Response: Pursuant to the Anti-Car 

Theft Act, a junk or salvage yard that is 

issued a verification under 49 U.S.C. 

33110 stating that an automobile or 

parts from that automobile are not 

reported as stolen is not required to 

report to NMVTIS. Therefore, the 

Department has retained this exemption 

from NMVTIS reporting in these 

regulations. 

Comment: The ARA commented that 

it appreciates attempts to exempt 

reporting by junk and salvage yards that 

already report to a third-party 

organization that is sharing its 

information with NMVTIS. The ARA 

further commented, however, that yards 

not currently participating with a 

cooperating third party will need a 

separate reporting mechanism that is 

labor efficient and economical in order 

to report NMVTIS information. 

Response: DOJ agrees. The operator 

will designate at least three third-party 

organizations that have expressed a 

willingness to share with NMVTIS 

information that they receive from 

insurers and junk and salvage yards. In 

addition, DOJ will endeavor to identify 

a reporting mechanism that is ‘‘sector’’ 

and ‘‘stakeholder’’ neutral. Third-party 

providers need to be identified who will 

provide the information to the 

stakeholders or allow such third-party 

providers to charge a nominal fee for 

collecting and reporting the information 

on behalf of junk and salvage yards. DOJ 

hopes to identify providers that do not 

charge fees, but this is difficult with 

sector-or stakeholder-neutral providers. 

Comment: Several state motor vehicle 

administrations commented on the 

third-party exemptions provided in the 

proposed rule. One state motor vehicle 

administration commented that it 

currently has some but not all of the 

information required for junk and 

salvage reporting. The state suggested 

that it does not have the resources 

available to accept and report all of the 

information required from junk and 

salvage yards. Another state motor 

vehicle administration made a similar 

point and stated that the requirements 

effectively establish an inefficient dualreporting requirement. Another 

suggested that the phrase ‘‘or cause to be 

provided on its behalf’’ be clarified so 

that it is clear that states do not have a 

responsibility to report insurance, junk, 

or salvage information to NMVTIS on 

behalf of these organizations. The State 

of New York commented that it receives 

reports from junk and salvage yards in 

paper, that it does not process all of the 

reports received, and that the processing 

time may be beyond the reporting 

timeframes required of junk and salvage 

yards. Another asked that entities 

reporting to states as their chosen 

method of compliance be required to 

certify that they are meeting their 

reporting requirements by reporting to a 

specific state or states. 

Response: A state’s willingness to 

make such alterations to accommodate 

third-party reporting is strictly 

voluntary. Junk and salvage yards in 

states that cannot accommodate thirdparty reporting as required by the AntiCar Theft Act and the rules will have 

other options for compliance reporting. 

While DOJ is committed to avoiding 

inefficient processes, DOJ is not able to 

eliminate data fields for the sake of 

efficiency alone and is not willing to 

impose additional requirements on the 

states to expand data collection and 

reporting on behalf of junk- and salvageyard operators. 

Comment: ASPA commented that 

while the proposed rule allows states to 

share junk and salvage information with 

NMVTIS, the inclusion of this data in 

state title information systems would be 

based on the state’s definition of 

‘‘salvage’’ and ‘‘junk’’ vehicles. ASPA 

questioned how the state would report 

data that it may not have because that 

state does not require submission of that 

data. 

Response: The rule requires that junkand salvage-yard reporting by or 

through states must include all of the 

data that junk- and salvage-yard 

operators are required to report. State 

definitions of ‘‘salvage’’ or ‘‘junk’’ do 

not alter a junk-or salvage-yard 

operator’s responsibility to report 

vehicles in its inventory. If junk- and 

salvage-yard operators are not reporting 

all of the required data to the state, or 

the state is not able to report all of the 

data to NMVTIS as required of the yard, 

the junk or salvage yard must report 

independently of the state. 


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Comment: ASPA contended that the 

provisions of the proposed rule with 

regard to the direct-reporting 

exemptions for junk or salvage yards 

that already report inventories to the 

states appear to conflict with the 

wording of the statute that ASPA 

described as ‘‘only requir[ing] the 

reporting of acquisition’’ of such 

vehicles. 

Response: The Act specifically spells 

out what information is to be reported 

by junk and salvage yards and requires 

junk and salvage yards to report more 

than the mere acquisition of the vehicle. 

8. Total Loss Definition/Fair Salvage 

Value 

Comment: One commenter expressed 

concern at the reference to ‘‘fair salvage 

value.’’ Any vehicle with a high salvage 

value will be totaled with a lower 

damage appraisal, and any vehicle with 

a low salvage value will be totaled with 

a high damage appraisal. The 

commenter noted that without 

uniformity as to the assignment of the 

salvage declaration, consumer 

protection cannot be guaranteed. The 

commenter argued for a more uniform 

definition of total loss that is not driven 

by the salvage value, noting that ‘‘[t]his 

proposed market assessment of the 

vehicle value can either make or break 

the rule.’’ Others commented positively 

on the use of a ‘‘value-based’’ definition. 

Response: DOJ used this reference 

because it was required by the Anti-Car 

Theft Act. DOJ understands that there 

are different ways or bases for 

determining total loss, and that different 

stakeholders may argue for different 

standards based on their interests. 

Comment: Nationwide Mutual 

Insurance Company commented that 

Congress specifically granted the DOJ 

authority to collect information from 

insurers on vehicles that such insurers 

have ‘‘obtained possession of’’ and 

determined to be ‘‘junk automobiles or 

salvage automobiles.’’ Nationwide 

further commented that ‘‘[i]t is not 

logical that declaring a vehicle a total 

loss should trigger reporting of the total 

loss automobiles as salvage and/or junk. 

The determination of [a] vehicle as a 

total loss can be based upon other 

economic considerations not reflective 

solely on the actual cost of reporting the 

vehicle. Therefore, we assert that the 

inclusion of total loss information in the 

proposed rule is inconsistent with our 

understanding of the intent of the 

statute.’’ 

Response: DOJ disagrees. DOJ is 

mandated to require reporting of 

‘‘salvage’’ vehicles, which DOJ has 

determined to include those vehicles 

determined to be a ‘‘total loss.’’ DOJ 

recognizes that, in certain 

circumstances, the decision to declare a 

vehicle a ‘‘total loss’’ may be based on 

other determinations, such as the fact 

that a vehicle has been stolen. To 

address this issue, insurance carriers are 

strongly encouraged to include with 

‘‘total loss’’ reporting the primary reason 

for the determination. Doing so not only 

would provide a better position for 

insurance carriers, but it also would 

allow the consumer to be aware of the 

specific circumstances for the 

determination. DOJ does not agree that 

‘‘obtained’’ should be defined in such a 

limited way to include only ownership. 

Comment: Nationwide Mutual 

Insurance Company commented that 

DOJ should clarify the definitions of 

junk and salvage by requiring insurers 

to report on those automobiles titled as 

‘‘junk’’ or ‘‘salvage’’ under the laws of 

the state where the insurer obtains title 

to the motor vehicle. 

Response: DOJ disagrees and notes 

that not even half of the states require 

such titles or brands (see Texas’s 

comment below). Such a definition, 

therefore, would create a significant 

loophole that would be counter to the 

consumer-protection intentions of the 

Anti-Car Theft Act. 

Comment: The State of Texas 

Department of Transportation 

commented that ‘‘ ‘Total loss’ is not a 

term used in Texas salvage motor 

vehicle law and has no bearing on 

whether a vehicle is determined to be a 

salvage vehicle. A vehicle can be 

considered a ‘total loss’ by an insurance 

company, but not be branded as salvage 

because the vehicle does not meet the 

definition of salvage in the title state. 

* * * Use of this term could be 

problematic if NMVTIS shows a vehicle 

as a total loss and the Texas records 

indicate nothing.’’ 

Response: The requirement for 

insurance carriers to report ‘‘total loss’’ 

information is put in place for exactly 

this reason—vehicles that are salvage 

may not be branded as salvage by many 

states. To resolve this discrepancy, 

NMVTIS blends reported information 

from multiple sources so that 

prospective purchasers are aware of the 

vehicle’s true history and can avoid 

being defrauded and placed in an unsafe 

vehicle. The presence of ‘‘total loss’’ 

information in the absence of a state 

salvage brand will need to be explained 

by portal providers, so that prospective 

purchasers (and others) are aware of 

what the apparent discrepancy means, 

and how it occurs. DOJ does not expect 

states to take any action based on this 

information that is not authorized in 

state law and does not believe that it 

was the intention of the Anti-Car Theft 

Act to require them to do so. 

Comment: Several insurance-related 

associations commented that ‘‘[t]he 

statute requires that insurers report junk 

and salvage automobiles, yet the 

regulation would require reporting of 

‘total losses,’ a term that would include 

some automobiles that are not junk or 

salvage. It is axiomatic that a regulation 

cannot expand the limits of a statute, 

and especially if in doing so, the 

regulation imposes added burdens and 

costs. Not only is such expansion 

inconsistent with the underlying statute 

but there is also nothing in the Court’s 

order in Public Citizen et al. v. Michael 

Mukasey that mandates or authorizes 

any such expansion of the statutory 

definition of automobiles to be 

reported.’’ 

These commenters further noted ‘‘that 

the statutory definitions of ‘junk’ and 

‘salvage’ in 49 U.S.C. 30501 are not used 

by most state or insurance carriers. To 

enable consistency with the existing 

state laws and data systems and thereby 

to expeditiously implement NMVTIS, 

we request that the last sentence of 

Section 25.55(a) be amended to read in 

the final regulation: ‘An insurance 

carrier shall report on any automobile 

that it has determined to be a junk or 

salvage automobile under the law of the 

applicable jurisdiction.’ This approach 

makes sense because since the Congress 

enacted this statute in 1992, most states 

have defined the meaning of ‘junk’ or 

‘salvage.’ These state laws represent the 

best understanding of these terms today. 

Requiring their use by regulation would 

implement the spirit of the law in a 

practical way. Data reported by insurers 

in this manner will also be consistent 

with data reported by the states.’’ 

Opposing this view, consumeradvocate litigators commented that 

‘‘[t]he Insurers comment that ‘any 

expansion via regulation of the 

categories of automobiles for which 

reporting is mandated * * * would be 

unauthorized. * * *’ However, they do 

not suggest that it is outside the scope 

of the Department’s authority to provide 

construction for such terms in the 

statutes. It is obviously the duty and the 

province of the Department to use its 

broad discretion in construing these 

terms.’’ The consumer-advocate 

litigators further commented that the 

rule’s enabling of electronic reporting 

through third parties that may already 

have access to the data addresses the 

need for reporting in the leastburdensome and least-costly fashion. 

These commenters further argued that 

‘‘[t]he Insurers take issue with the 

Department’s proposal to provide that a 

vehicle treated as a total loss is deemed 


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a salvage vehicle. However, it is 

squarely with the Department’s 

province to make the determination that 

the fact that a vehicle has been treated 

as a total loss indeed is evidence that it 

is a ‘salvage’ vehicle, and that both 

legally and practically the vehicle is a 

‘salvage’ vehicle. Similarly, it is 

necessary, in carrying out the clear 

protective purposes of the statutes, that 

this construction be given to these 

terms. * * * The Insurers next propose 

amending the last line of § 25.55(a) to 

state ‘An insurance carrier shall report 

on any automobile that it has 

determined to be a junk or salvage 

automobile under the law of the 

applicable jurisdiction.’ Such a change 

would incorporate the limitation they 

seek of disregarding total loss vehicles. 

It also appears to be an attempt to 

require that state definitions of ‘junk’ or 

‘salvage’ be substituted for the 

definitions in the statutes, rather than 

additional to and supplementary of 

them. That would be entirely improper, 

of course, defeating the central purpose 

of providing a national definition of 

‘salvage’ that sets a floor for reporting, 

not a ceiling.’’ These commenters 

further noted the ‘‘extraordinary 

patchwork of state laws regarding title 

‘brands’ and even the terms used for 

labeling ‘salvage’ or ‘total loss’ vehicles. 

The uniform minimal reporting 

standard provided by the NMVTIS 

statutes is of critical importance.’’ 

Response: DOJ agrees that it possesses 

authority and responsibility to provide 

the definition of these terms. 

Additionally, in order to meet the 

requirements of the Act with regard to 

providing prospective purchasers with 

the information needed to make an 

informed purchase decision, and in 

order to inform state title 

administrations and law enforcement of 

that vehicle’s history, full disclosure of 

total-loss information is needed 

regardless of a state’s action or inaction 

on that vehicle. 

Comment: Several insurance-related 

organizations and associations 

commented that ‘‘[s]ection 25.55(a) 

states that the insurer must report 

automobiles that it has obtained 

‘possession of and has decided are junk 

automobiles or salvage automobiles.’ 

The term possession is not clear. To be 

workable, ‘possession’ should be 

construed as ‘the titled owner’ as 

represented on the certificate of title, 

because insurers would only be able to 

report on those automobiles to which 

they are titled owners. Otherwise, they 

do not record ‘possession’ of 

automobiles and could not report 

them.’’ 

The insurance-related organizations 

further commented that ‘‘[r]eplacing 

‘possession’ in the regulation with 

‘titled owner’ would also be workable 

and consistent with the remainder of the 

sentence which requires that insurers 

must report automobiles which they 

possess and have decided they are junk 

or salvage automobiles. Both the 

‘possession’ and ‘decision’ are 

manifested by re-titling, which is 

reportable by insurers in an efficient 

manner. Therefore, the language would 

read, ‘a report that contains an 

inventory of all automobiles of the 

current model year or any of the four 

prior model years, that the carrier 

during the past month is the titled 

owner and has decided are junk 

automobiles or salvage automobiles.’ ’’ 

Opposing this view, several 

consumer-advocate litigators 

commented that while the term is not 

clear and needs construction in 

furtherance of the protective purposes of 

the statute, they disagreed with the 

insurers’ proposed substitution of ‘‘is 

the titled owner of’’ for ‘‘has obtained 

possession of’’ in section 25.55(a). These 

commenters further noted that the effect 

of the insurers’ comments would be to 

‘‘eliminate any reporting requirement of 

salvage vehicles by insurance carriers 

whatsoever for all but those vehicles 

that they do in fact actually title in their 

name. There are innumerable reasons 

why, and methods by which, they may 

legally in many instances not obtain 

titles to salvage vehicles in their names 

under the existing hole-laden patchwork 

of state laws. In addition, if this change 

were made, and if they blatantly 

violated a state law by failing to get a 

salvage title issued in their names, they 

would appear not to be in violation of 

the federal law by not reporting to 

NMVTIS, because they would not have 

been the ‘titled owner.’ The opposite 

construction of ‘possession’ is crucial. 

In fact, the very example they provide 

of a salvage vehicle that comes into their 

possession but that they do not title 

shows how NMVTIS should work to be 

effective: They should report such 

vehicles. If there are multiple reports on 

the same vehicle, there is no harm done; 

but if such salvage vehicles are not 

reported, there is every harm done.’’ 

Other consumer advocates commented 

that ‘‘possession’’ should be defined to 

include both actual and constructive 

possession and should include 

exercising control over an automobile 

directly or indirectly. 

Response: Limiting insurance 

reporting to those vehicles owned by 

insurance companies would create a 

large loophole through which total-loss 

or salvage vehicles would remain under 

‘‘clean title.’’ Such a loophole was 

clearly not intended to exist under 

NMVTIS, and in order to provide 

consumer protection against fraud, 

insurance carriers must be required to 

report on all vehicles that they 

determine to be a total loss. 

Comment: Several insurance-related 

organizations and associations 

commented that ‘‘[s]ection 25.55(b) sets 

forth the mandatory data elements. We 

believe that applying the following 

interpretations will allow a reporting 

system to be put in place that complies 

with all aspects of the statute, including 

the ‘least burdensome and costly’ 

directive and that can reasonably meet 

the Court’s deadline in Public Citizen et 

al. v. Mukasey. 

‘‘a. VIN. This can be reported. 

‘‘b. The date on which the automobile 

was obtained or designated as a junk or 

salvage automobile. Again, interpreting 

this requirement to mean the date on 

which the automobile was re-titled 

‘junk’ or ‘salvage’ comports with legal 

and practical considerations and would 

be most cost effective. 

‘‘c. The name of the individual or 

entity from whom the automobile was 

obtained or who possessed it when the 

automobile was designated as a junk or 

salvage automobile. Again, as set forth 

above, the only cost effective way for 

insurers to meet this obligation is to 

construe it to mean the name of the 

insurer when the automobile was retitled. Providing the name of the 

individual or entity from whom the 

automobile was obtained does not 

provide useful information to law 

enforcement or consumers. 

‘‘d. The name of the owner of the 

automobile at the time of the filing of 

the report. In most instances, this will 

be the buyer of the salvage or junk 

automobile, or the insurance company 

when the insurance company retains 

ownership, for instance to crush a junk 

vehicle.’’ 

Opposing this view, several 

consumer-advocate litigators 

commented that the insurers suggest 

‘that the regulations should provide that 

they do not have to report the name of 

the person from whom a salvage vehicle 

was obtained. This is directly contrary 

to 49 U.S.C. 30504(b)(3). The ownership 

trail of all of these vehicles is critical for 

law enforcement and consumer 

investigative purposes, and Congress 

noted that by writing it into law.’’’ 

The consumer-advocate litigators 

further commented that ‘‘[t]he Insurers 

also suggest that the ‘owner of the 

automobile at the time of the filing of 

the report’ would normally be the buyer 

of the salvage vehicle, and would only 

be the insurance carrier if it retained 


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ownership to crush a vehicle. I submit 

that it is important that both the buyer 

and the insurance carrier be identified 

under the regulations.’’ 

Response: DOJ agrees with the 

comments of the consumer-advocacy 

organizations and has retained the totalloss reporting requirements that were 

included in the proposed rule. 

Comment: Several commenters, 

including the NADA, ARA, Experian 

Automotive, the National Salvage 

Vehicle Reporting Program, insurance 

services organizations, consumer 

advocate attorneys, and others, 

expressed strong support for DOJ’s 

‘‘modernization and clarification of 

language found in the Anti-Car Theft 

Act related to salvage and junk vehicles, 

to include within this the requirement 

to report on all total loss vehicles, 

including those recognized by the state 

and those not recognized by the state 

but determined a total loss by an 

insurance carrier.’’ Several of these 

commenters also pointed out that many 

total-loss vehicles do not receive salvage 

brands due to varied and unreliable 

state definitions and criteria. Relying on 

state definitions of ‘‘salvage,’’ therefore, 

would be highly inconsistent, would 

perpetuate fraud and theft, and would 

fail to accomplish the objective. 

Comments submitted by Amica Mutual 

Insurance Co. underscore the need to 

collect ‘‘total loss’’ data. Such data 

provides additional consumer 

protection, potentially decreases 

fraudulent activity, and reduces the 

number of unsafe vehicles in the 

marketplace. 

Response: DOJ agrees with these 

comments. 

Comment: The NADA, ARA, National 

Salvage Vehicle Reporting Program, 

several national consumer-advocacy 

organizations, and other organizations 

commented that the proposed rules fail 

to require insurance carriers to report all 

vehicles that they declare a total loss, 

including those retained by insureds. 

Often, individuals who retain 

possession of their ‘‘total loss’’ vehicle 

can avoid disclosure, or they may not 

apply for salvage titles. The NADA 

commented that the final rule should be 

revised to eliminate the concept of 

possession and instead focus on those 

insured motor vehicles that the 

insurance company declares, or the 

applicable jurisdiction defines, to be a 

‘‘total loss.’’ 

Response: DOJ disagrees that the 

proposed rule puts such a limitation in 

place. DOJ requires that insurance 

carriers who declare a vehicle a total 

loss and allow the insured to retain the 

vehicle must still be required to report 

such declarations. 

Comment: The NADA commented 

that ‘‘total loss’’ should be defined 

broadly to capture all total-loss vehicles. 

‘‘The final rule should not define ‘total 

loss’ in Section 25.52, but rather should 

define ‘total loss motor vehicle’ as ‘those 

motor vehicles determined to be a total 

loss under the laws of the applicable 

jurisdictions and those designated as a 

total loss by each insurance company 

under the terms of its policies.’ ’’ 

Response: DOJ appreciates this 

clarification and agrees that ‘‘total loss’’ 

includes all total-loss vehicles. 

Comment: ASPA commented that 

‘‘[w]hen an automobile is classified as a 

total loss by an insurance company, it 

does not necessarily mean that the 

automobile is a ‘salvage automobile.’ On 

page 54546 of the Federal Register, in 

Section 2 ‘Insurance Carriers,’ the 

explanation of the Proposed Rule 

expands the definition of ‘salvage 

automobiles’ when it states: ‘For 

purposes of clarification, the 

Department of Justice has determined 

that this definition [salvage 

automobiles] includes all automobiles 

found to be a total loss under the laws 

of the applicable jurisdiction or 

designated as a total loss by the 

insurance carrier under the terms of its 

policies.’ ’’ 

‘‘In common usage, ‘salvage’ is not 

synonymous with ‘total loss.’ There are 

many circumstances in which an 

insurance company may declare a 

vehicle a ‘total loss,’ but the vehicle 

does not meet the ‘salvage’ definition of 

the relevant state. If a stolen vehicle is 

not recovered quickly, the insured may 

be paid for the missing vehicle. If the 

vehicle is later recovered in a largely 

undamaged condition, the vehicle, 

although a ‘total loss’ due to its late 

recovery, may not meet the relevant 

‘salvage’ definition and, often, is sold by 

the insurer with a ‘clear’ (i.e., not 

branded) title. The definition in the 

Proposed Rule lumps this undamaged 

theft recovery into the ‘salvage’ 

definition, thus devaluing the vehicle 

and, again, creating confusion about the 

applicability of the laws of the relevant 

state.’’ 

ASPA further commented that 

‘‘[m]ore generally, pursuant to 49 U.S.C. 

30501(7), ‘salvage automobile’ is clearly 

defined as ‘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.’ This definition is 

both clear and unambiguous on its face 

and, therefore, requires no 

‘clarification.’ ’’ 

‘‘In the Proposed Rule, the DOJ is 

attempting to expand the definition of 

salvage automobile ‘[f]or purposes of 

clarification’ to include automobiles 

determined to be a total loss under the 

law of the applicable jurisdiction or 

designated as a total loss by the insurer 

under the terms of its policies. We 

contend that this significant expansion 

of the definition is not necessary, and 

that the proposed definition actually 

contradicts accepted custom and usage 

within the insurance and salvage 

industries. 

‘‘The DOJ’s proposed amendment to 

the definition of salvage automobile 

would subject many clear title 

automobiles to the reporting 

requirements of NMVTIS. This is 

problematic, and is clearly not what 

Congress envisioned when it created the 

definition for salvage automobile. In 

Chevron U.S.A., Inc. v. Natural 

Resources Defense Council, Inc., 467 

U.S. 837 (1984), the Court implemented 

a two-part analysis to determine the 

appropriate standard of review towards 

a government agency that attempts to 

amend statutory language. Here, since 

the current definition of salvage 

automobile is not ambiguous, the 

proposed ‘clarification’ by the DOJ is 

not based on a permissible construction 

of the statute and should not be 

allowed.’’ 

Response: DOJ disagrees. Total-loss 

vehicles are just that—a total loss—at 

the time the determination is made. 

Total-loss vehicles fall within the 

definition of ‘‘salvage’’ and must be 

reported. In response to other 

comments, DOJ notes that insurance 

carriers are strongly encouraged by the 

final rule to report to NMVTIS the 

primary reason for the determination of 

total loss, addressing this commenter’s 

concerns specifically and providing 

much-improved disclosure for 

consumers. 

Comment: One submission argues for 

‘‘the necessity of all states to adhere to 

the Uniform Certificate of Title Act.’’ ‘‘If 

the state has a different definition of a 

Salvage vehicle the branding now 

becomes an arbitrary issue.’’ 

Response: The Uniform Certificate of 

Title Act and the benefits of uniform 

titling procedures aside, the Anti-Car 

Theft Act does not require States to 

adopt standard brand labels or 

definitions. NMVTIS has a process in 

place to record each state’s unique 

brand label and to relate it to one of the 

78 brand types used in the NMVTIS 

database. The state’s brand labels and 

definitions remain unchanged in 

NMVTIS. 


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9. Chain of Custody/Names of Those 

Who Provided/Those Who Purchased 

Comment: One commenter noted that 

‘‘[t]he reporting requirement of the junk 

and salvage yards may need some 

change. There are many different routes 

for a vehicle to come into a yard, very 

often it is not by the ‘owner of record’ 

or the titled owner. A more definitive 

approach to recording the information 

of the entity placing the vehicle into the 

salvage yard should be taken, more 

identifying information regarding the 

entity placing the vehicle into the 

salvage yard should be captured. * * * 

How does the system handle this in a 

manner that will notify the title State of 

a cancel record and provide a bona-fide 

chain of events leading to the yard?’’ 

Response: The reporting requirement 

for junk and salvage yards applies to 

every vehicle regardless of what ‘‘route’’ 

it took into the yard or who brought in 

the vehicle. Further, it is the 

responsibility of the junk or salvage 

yard to provide, among other data, the 

name of the individual or entity from 

whom the automobile was obtained. 

The NMVITIS reporting requirements 

do not affect existing state-level 

requirements for junk- and salvage-yard 

operators to provide states with a notice 

of title or record cancellation and any 

data fields required in such 

notifications. NMVTIS will not issue 

such notifications to states, but states 

will be able to view the reported 

salvage- or junk-yard status of any 

vehicle at any time. With the 

cumulative vehicle histories constructed 

in NMVTIS, states and law enforcement 

can identify the ‘‘chain of events’’ with 

reliability once there is full system 

participation. 

Comment: One commenter noted that 

‘‘stolen’’ designations or notifications 

sometimes are not made when a vehicle 

is first reported stolen. In these 

instances, the commenter suggested that 

law enforcement may receive a false 

negative response on a stolen check due 

to this delay. The commenter suggested 

that the system provide a notification to 

law enforcement officers filing a report 

on a stolen vehicle that a prior stop and 

‘‘stolen’’ check was made on the 

vehicle, providing notification and an 

investigative lead to the reporting officer 

of where the vehicle was stopped and 

who made the stolen inquiry. Another 

commenter noted that stolen-vehicle 

information is not required to be in 

NMVTIS, and nothing in the regulations 

requires a state to check NCIC before 

issuing a title. 

Response: NMVTIS is not intended or 

expected to replace the information or 

services available to law enforcement 

through NCIC. NCIC is and will remain 

the primary system used and relied 

upon by local law enforcement to check 

the ‘‘stolen’’ status of a vehicle. 

NMVTIS’s capturing of ‘‘stolen’’ status 

and history information is to inform 

state titling agencies and others who 

may not have access to NCIC that a 

vehicle was at one time reported as 

‘‘stolen.’’ Stolen vehicle information is 

included in NMVTIS via NICB so that 

states that do not have access to NCIC 

can be apprised of a vehicle’s 

questionable status before issuing a new 

title. 

Comment: The National Auto Auction 

Association commented that ‘‘NMVTIS 

should include lien holder names and 

license plate numbers’’ for various 

reasons. 

Response: While DOJ will authorize 

the operator to seek additional 

information for NMVTIS as may be 

necessary to accomplish program goals, 

DOJ will not require these data fields to 

be included in NMVTIS. 

Comment: The National Auto Auction 

Association commented that DOJ should 

clarify in the final rule whether data 

maintained in the NMVTIS central file 

is to be considered the official legal 

record of a jurisdiction’s data. 

Response: The official record for any 

vehicle will be determined by the state. 

However, NMVTIS is expected to be a 

reliable source of title information that 

users can rely on to make decisions. 

10. Brand Definitions 

Comment: One commenter asked, 

‘‘[h]ow is the branding procedure 

determined? Is there a preexisting 

national standard for what brands exist 

and how a vehicle is classified under 

such brands or is the determination 

made on a state-by-state basis? If the 

standard is national (which would make 

sense given the national objective), 

maybe a list of definitions of the 

applicable brands should be placed in 

the rule’s definition section.’’ Another 

commenter noted that the development 

of standardized definitions and brands 

for all states would be extremely 

beneficial in ensuring that the intent of 

NMVTIS is fully recognized. Several 

state motor vehicle administrations 

pointed out that the definitions of 

‘‘salvage’’ and ‘‘total loss’’ in the 

proposed rule are different from state 

definitions. Another commenter noted 

that to add information based on the 

definitions in the proposed rule will 

conflict with State definitions of brands, 

compromise the integrity of the 

NMVTIS database, and reduce the value 

of the information in the database. 

Response: NMVTIS does not affect 

state branding procedures, and the AntiCar Theft Act did not require a national 

standard for branding. Although 

differing definitions may create 

complexity in deciphering a vehicle’s 

brand history, NMVTIS will accept any 

official state brand and will share that 

brand with other states, thereby relating 

that brand to a brand type or ‘‘NMVTIS 

Brand.’’ Users of NMVTIS will notice 

state brands as well as a separate 

category for insurance, junk, and salvage 

information, if any is available. The 

differences in these reporting streams 

also will be defined so that users will 

know if a vehicle has been or is a junk 

or salvage automobile by virtue of a 

state brand indicating such, or by an 

insurer’s determination that the vehicle 

was a total loss. Consumers and others 

also will be advised if a vehicle has 

been in the possession of a junk or 

salvage yard. Information is reported by 

multiple data sources and is reported in 

a segregated fashion with links for 

explanations. 

Comment: ASPA provided the 

following example as evidence of the 

problems that would be created by the 

proposed rule: ‘‘Michigan’s salvage law 

covers current model year passenger 

vehicles and those of the preceding five 

model years. Therefore, a 2002 

passenger motor vehicle does not 

become a ‘salvage vehicle’ or a ‘scrap 

vehicle’ in Michigan, regardless of the 

fact that the vehicle has been damaged 

and ‘totaled’ by an insurance carrier. In 

this situation, Michigan, when reporting 

to NMVTIS, presumably would not 

include the car in the state’s branded 

title submissions. An insurance carrier 

reporting to NMVTIS presumably would 

not include the car because it is outside 

of the age limitations applicable to 

insurance carriers. However, a salvage 

yard or junk yard, using the definitions 

in the Proposed Rule, presumably 

would report the vehicle as a ‘salvage 

automobile’ or a ‘junk automobile,’ 

when reporting to NMVTIS. So, for a 

state or other inquirer of NMVTIS, 

NMVTIS will show that the vehicle has 

a salvage or junk history. This occurs 

regardless of the fact that the relevant 

state did not deem the vehicle salvage 

or scrap.’’ 

Response: This comment offers an 

excellent example of how NMVTIS 

reporting will fill the holes that 

currently allow salvage or junk vehicles 

to remain unbranded, creating 

opportunities for theft and consumer 

fraud. 

11. Brand Washing 

Comment: One commenter asked ‘‘if 

brand information is already collected 

by states, how exactly would brand 

‘washing’ occur? If the retitling state 


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checks the title of the previous state 

wouldn’t that information be included 

with the title?’’ Another commenter 

recommended that NMVTIS retain a 

prior state’s brand history even when a 

state does not accept a previous state’s 

brand. 

Response: Brand histories or 

designations are not always carried 

forward by the states. Retitling states do 

not necessarily check with the previous 

states before issuing a new title. In some 

states, the paper title from the previous 

state of record is accepted as the basis 

for the new title to be issued. Because 

of the reliance in some states on paper 

titles as evidence of prior titling history, 

and because not all states check with 

the prior states of record, brand washing 

occurs regularly. NMVTIS will create a 

nationwide brand history for every 

vehicle, requiring that all states check 

with NMVTIS rather than simply 

relying on paper documentation. Brand 

washing will be significantly reduced, if 

not eliminated. A state’s decision not to 

acknowledge a prior state’s branding 

will not affect the NMVTIS brand 

history. 

12. Self Insurers Included in the 

Definition 

Comment: Several commenters 

expressed disappointment that self 

insurers were left out of the rule. One 

commenter noted that the definitions 

should encompass a ‘‘self insurer,’’ be it 

a municipality, lease company, or large 

corporation, and that this is a current 

‘‘hole’’ in the system. 

Response: DOJ agrees that the AntiCar Theft Act’s definition of ‘‘insurance 

carrier’’ includes entities that 

underwrite their own insurance, such as 

certain rental car companies. The 

definition, however, excludes any 

organization that does not underwrite 

its own insurance. 

13. Salvage Automobile Defined 

Comment: One commentator noted 

that the definition of a ‘‘salvage 

automobile’’ should also include any 

automobile that an insurance company 

has taken ownership of in settlement of 

a claim and any vehicle that a state has 

issued a title to an insurer for. Another 

commenter noted that ‘‘[t]he 

responsibilities of the insurance carriers 

should include, in the area of the 

reporting, if the insurance company 

obtained a title from the state in their 

name, the state in which they obtained 

it and the type of title.’’ Several 

consumer-advocacy organizations 

commented that every automobile 

obtained by a salvage yard or junk yard 

that the salvage yard or junk yard 

knows, or has reason to know, has come 

from an insurance carrier, or from any 

person or entity in connection with the 

resolution of insurance claims, should 

be deemed as a salvage automobile or 

junk automobile and must be reported 

as such. These commenters suggested 

that the rules should provide for a 

presumption that any automobile 

obtained or sold by a salvage or junk 

yard, and that has known unrepaired 

wreck or flood damage, is either a 

salvage automobile or junk automobile, 

and that such a vehicle must be reported 

as such. Similarly, the rules should 

include a presumption that any 

automobile obtained or sold by a salvage 

yard or junk yard, without knowledge as 

to the automobile’s physical condition, 

is either a salvage automobile or junk 

automobile, and must be reported as 

such. This would prevent salvage yards 

or junk yards from maintaining an 

‘‘empty head’’ to avoid compliance. The 

commenters suggested that ‘‘these 

presumptions (as to automobiles not 

obtained from insurers) can be 

overcome if and only if the salvage or 

junk yard has qualified appraisal 

personnel employees or others acting 

solely on its behalf, entirely 

independent of any other persons or 

entities, perform a good-faith physical 

and value appraisal of the automobile 

and determine that the automobile does 

not meet the definition of ‘salvage’ or 

‘junk.’ ’’ 

Response: Based on the proposed 

rule, a ‘‘salvage auto’’ is defined as ’’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.’’ 49 

U.S.C. 30501(7). 

For purposes of clarification, the 

Department of Justice has determined 

that this definition includes all 

automobiles found to be a total loss 

under the laws of the applicable 

jurisdiction or designated as a total loss 

by the insurance carrier under the terms 

of its policies. By definition, this would 

mean that every automobile obtained by 

a salvage yard or junk yard that the 

salvage yard or junk yard knows, or has 

reason to know, has come from an 

insurance carrier, or from any person or 

entity in connection with the resolution 

of insurance claims, should be deemed 

as a salvage automobile or junk 

automobile and must be reported as 

such. DOJ does not agree that any 

automobile with unknown damage or 

any automobile obtained without 

knowledge of its physical condition 

should be considered a junk or salvage 

automobile. DOJ agrees that a junk or 

salvage yard may be excepted from 

reporting any vehicle that a qualified 

independent appraiser determines does 

not meet the definition of a salvage or 

junk automobile. This determination by 

the appraiser must be in writing and 

made after performing a good-faith 

physical and value appraisal. Although 

not required, the Department 

recommends that junk and salvage yards 

retain the reports and written appraisals 

for a period of ten years from the date 

of the report. Additionally, a salvage 

auction or salvage pool that does not 

handle any vehicles from or on behalf 

of insurance carriers is categorically 

exempted from this rule until such time 

as they may handle a vehicle from an 

insurance carrier. 

Comment: One commenter noted that 

the lack of common terms will 

undermine the clarity and usefulness of 

the information provided: ‘‘How will 

NMVTIS reconcile the differences in 

law as to what constitutes a ‘total loss?’ 

How will this undermine or effect 

achievement of NMVTIS’[s] goals? How 

will NMVTIS reconcile the differences 

amongst insurance company policies as 

to what constitutes a ‘total loss?’ How 

will this undermine or effect 

achievement of NMVTIS’[s] goals?’’ The 

West Virginia Department of 

Transportation also commented that the 

rule should establish a standard for 

establishing total loss as opposed to 

relying on the rules of insurance carriers 

and states. 

Response: NMVTIS will not attempt 

to ‘‘reconcile’’ differences in definitions. 

Rather, NMVTIS recognizes that 

different definitions and criteria are in 

place within different insurance 

companies and states. NMVTIS accepts 

these ‘‘native’’ determinations and 

notifies users that ‘‘X company’’ or ‘‘X 

state’’ has made a determination that the 

vehicle is a ‘‘total loss,’’ ‘‘salvage 

vehicle,’’ etc. NMVTIS will provide all 

users with full disclosure and 

explanation on the differences in 

definitions and determinations and how 

this may or may not affect a vehicle. 

NMVTIS’s mandate is to notify users of 

the determinations made in a vehicle’s 

history, not to make such 

determinations uniform or conforming. 

14. Junk Yard Definition 

Comment: ISRI commented that it 

objects to the presumption in the rule 

that vehicle recyclers operate only one 

of two things, a ‘‘junk yard’’ or a 

‘‘salvage yard,’’ and suggests that DOJ 

clarify the full scope of entities to be 

included under the general heading of 

‘‘junk or salvage yards.’’ 


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Response: While DOJ relied upon the 

language in the Anti-Car Theft Act to 

describe the category of required 

entities, DOJ acknowledges that the 

terms do not adequately reflect the 

professional and varied nature of the 

vehicle-recycling industry. In general 

terms, any entity that owns, controls, 

handles, or acquires salvage vehicles is 

included in the reporting requirements 

of this rule, which is consistent with 

current business practices. Similarly, 

scrap-vehicle shredders, scrap-metal 

processors, ‘‘pull- or pick-apart yards,’’ 

salvage pools, salvage auctions, and 

other types of auctions handling salvage 

vehicles (including vehicles declared a 

‘‘total loss’’) are included in the 

definition of ‘‘junk or salvage yards.’’ 

Comment: ISRI also requested that 

new definitions of ‘‘scrap vehicle,’’ 

‘‘scrap-vehicle shredder,’’ and ‘‘scrapmetal processor’’ be added to the rule to 

exclude these entities from the reporting 

requirement. 

Response: DOJ has clarified the rule, 

but rather than eliminate the reporting 

requirements for these entities, DOJ 

revised the regulations to establish an 

exemption that would cover prohibitive 

reporting circumstances that these 

entities face. 

Comment: One commenter argued 

that the definition of ‘‘junk yard’’ is too 

broad and may unnecessarily include 

used car dealers and others who may 

rebuild vehicles with the intention of 

reselling them. The commenter 

suggested that having such entities 

report these vehicles into NMVTIS 

would potentially label these vehicles as 

‘‘junk or salvage’’ and preclude the 

vehicles from being retitled in some 

states. 

Response: One of the main purposes 

of NMVTIS is to provide prospective 

purchasers and others with reliable 

histories of a vehicle’s previous and 

current condition as it relates to salvage 

and loss. Vehicles reported as having 

been in the possession of a ‘‘junk’’ or 

‘‘salvage yard’’ may not be viewed in the 

same way that vehicles with a ‘‘junk’’ or 

‘‘salvage’’ brand may be viewed in state 

titling processes. Each state will 

continue to make its own 

determinations regarding vehicle titling 

based on state law. Although any 

individual or business engaged in the 

business of acquiring ‘‘junk’’ or 

‘‘salvage’’ automobiles (which includes 

motor vehicles determined by an 

insurance carrier to be a ‘‘total loss’’) 

generally must by law report such 

vehicles to NMVTIS, there are two 

exceptions to this requirement. First, an 

automobile that is determined to not 

meet the definition of salvage or junk 

after a good-faith physical and value 

appraisal conducted by a qualified 

independent appraiser is not required to 

be reported. Second, DOJ has added a 

clarification that individuals and 

entities that handle less than five 

salvage or total-loss vehicles per year 

need not report under the salvage-yard 

requirements, which is consistent with 

existing standards that used car dealers 

are familiar with. 

Comment: Many commenters, 

including Iowa Attorney General 

Thomas J. Miller, noted that the 

inclusion of salvage pools in the 

reporting requirements for junk and 

salvage yards ‘‘will help close a 

significant loophole’’ and will ‘‘further 

deter fraudulent used car sales, vehicle 

theft,’’ and other crimes. 

Response: Requiring salvage pools or 

auto auctions to report on salvage or 

insurance claim vehicles will increase 

the effectiveness of the program, 

ensuring that consumers and others are 

not defrauded by sellers who conceal 

salvage or ‘‘total loss’’ histories. 

Comment: Several commenters, 

including the ISRI, the Virginia 

Department of Motor Vehicle 

Administrators, and other industry 

associations and representatives, 

commented that the proposed rules do 

not clearly indicate that scrap-metal 

processors, shredders, pull-apart yards, 

and others who often receive and 

demolish many end-of-life vehicles are 

included in the reporting requirements. 

Response: The regulations have been 

revised to clarify that the definition of 

junk and salvage yards includes not 

only salvage pools, but also scrap-metal 

processors, shredders, pull-apart yards, 

and others who handle or control totalloss, junk, or salvage automobiles, 

otherwise described as end-of-life 

vehicles. 

Comment: ASPA commented that DOJ 

should recognize that VIN inspections 

conducted in most states would make a 

salvage automobile an unattractive 

choice for criminals, and that cloning a 

salvage vehicle would result in the 

cloned vehicle having a ‘‘salvage’’ 

branded title. 

Response: DOJ recognizes that some 

states require vehicle inspections upon 

retitling, and some states place a 

‘‘brand’’ on salvage vehicles. In these 

states, a salvage vehicle may not make 

an attractive choice for VIN cloning. 

However, not every state has these 

requirements, and VIN inspections 

typically do not inspect or verify hidden 

VINs. As a result, cloned vehicles go 

undetected. Even electronic diagnostic 

modules that would otherwise display 

the VIN can be defeated, allowing the 

clone to be virtually undetectable. Most 

often, the criminal activity that DOJ 

referred to in the proposed rule is 

related to total-loss or ‘‘end-of-life’’ 

vehicles that are purchased because 

they have a ‘‘clean title’’ that is then 

fraudulently connected with a stolen 

vehicle, which ‘‘clones’’ the stolen 

vehicle to the non-stolen, ‘‘clean title’’ 

vehicle. Because the non-stolen vehicle 

was destroyed and sold to an 

individual, it no longer appears on the 

road and no notification of its 

destruction may be made to the current 

state of title. 

Comment: Copart, Inc. argued that 

because salvage pools do not own the 

vehicles sold at salvage pools or auto 

auctions, and therefore by definition do 

not ‘‘resell’’ them, they do not meet the 

definition of salvage yard and are 

therefore not required to report. Copart 

further contended that salvage pools 

should be required to report only those 

vehicles that they purchase for resale, 

and that any other interpretation goes 

beyond the plain language of the statute. 

Response: DOJ disagrees with this 

interpretation and notes that salvage 

pools do in fact handle and cause to be 

resold (on behalf of their current owner, 

who ‘‘bought’’ the vehicle from another) 

salvage and total-loss vehicles. 

Comment: Copart, Inc. argued that 

salvage pools do not typically have 

access to the information needed to 

determine whether a vehicle meets the 

NMVTIS definition of junk vehicle or 

salvage vehicle. Copart further 

contended that junk and salvage yards 

should only be required to report to 

NMVTIS those vehicles sold on a 

salvage or junk certificate under 

applicable state law. 

Response: Allowing junk and salvage 

yards to report only on vehicles with 

salvage titles would perpetuate the 

problems described elsewhere, 

including fraud and theft. Nonetheless, 

DOJ has addressed this issue in the 

definition of a ‘‘salvage auto’’ that now 

includes exceptions for vehicles that are 

not salvage, including total-loss 

vehicles. 

Comment: Copart, Inc. argued that 

requiring salvage pools to report to 

NMVTIS is wasteful and duplicative 

because they function as an 

intermediary between other entities that 

are required to report, such as insurance 

carriers, dismantlers, and scrap-metal 

processors. 

Response: Criminal organizations 

exploit salvage-pool services, 

purchasing total-loss vehicles with 

‘‘clean titles’’ to facilitate the cloning 

and resale of stolen vehicles. To address 

this issue, law enforcement and other 

organizations require information on the 

vehicles handled by salvage pools. 

Additionally, many if not most vehicles 


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sold by salvage pools do not end up in 

a junk or salvage yard, and not all 

vehicles sold by salvage pools, 

including those with significant 

damage, are determined to be a total loss 

by insurance carriers. For these reasons, 

it is essential that salvage pools report 

to NMVTIS. 

Comment: Copart, Inc. argued that 

DOJ should interpret ‘‘junk yard’’ and 

‘‘salvage yard’’ to include all vehicle 

auction companies so as not to 

discriminate against ‘‘salvage pools’’ 

that sell both clean-titled and salvage 

vehicles. 

Response: All vehicle auction 

companies should not be required to 

report on all vehicles handled or in their 

inventory. Instead, those organizations 

that handle or resell vehicles on behalf 

of insurance carriers after a 

determination of total loss, regardless of 

salvage title, should be required to 

report. This should hold true regardless 

of whether the entity operates as a 

‘‘salvage pool’’ or refers to itself as an 

‘‘auto auction,’’ ‘‘salvage auction,’’ 

‘‘abandoned-vehicle auction,’’ ‘‘tow-lot 

auction,’’ ‘‘scratch-and-dent’’ sale or 

auction, etc. As the National Salvage 

Vehicle Reporting Program noted, ‘‘the 

recommended guideline for determining 

that an entity is required to report * * * 

should be if the entity owns or acquires, 

[or handles] total loss/salvage vehicles 

in whole or in part.’’ Under such 

circumstances, it should be required to 

report all vehicles to NMVTIS. DOJ will 

clarify this requirement in the final rule. 

15. Salvage Brand 

Comment: One commenter noted that 

‘‘[i]f the NMVTIS project is to succeed 

it would be a reasonable assumption to 

require a uniform approach to the 

assignment of the ‘salvage’ brand by any 

member state. The system is only as 

good as the data in it, if the data is not 

applicable to uniform situations there 

will always be discrepancies.’’ 

Response: A uniform approach to 

branding would be advantageous in 

many respects. The Anti-Car Theft Act, 

however, does not provide the authority 

for DOJ to develop or mandate uniform 

branding, which would be a significant 

and potentially costly change for states 

to implement. As each state makes its 

own determinations, and NMVTIS 

relates state brands to an aggregated 

brand or brand category within 

NMVTIS, the non-uniform approach 

does not create an insurmountable 

problem. DOJ will ensure that those 

who access NMVTIS information have 

the opportunity to learn about the 

different state brands that exist and the 

impact of other reporting on these 

brands to create greater awareness and 

understanding of their meaning. 

16. Definition of Automobile 

Comment: NAEC argued that the rule 

should require the inclusion of ‘‘trucks, 

SUVs and other non-automobiles as 

prescribed by the Federal Anti-Car Theft 

Act for Parts Marking’’ because of their 

popularity with vehicle thieves. Other 

organizations, including the Idaho 

Transportation Department, contended 

that ‘‘NMVTIS records should also 

include all vehicles that a state may 

title, and not be limited to standard 

types of vehicles.’’ The Minnesota 

Department of Public Safety stated that 

if it is required to report on all vehicles 

in its database, ‘‘it might well grind to 

a halt,’’ and costs would increase 

considerably. 

Response: Although DOJ cannot 

extend the Act’s definition to include all 

motor vehicles, it is important to note 

that many states currently include such 

vehicles in their reporting to NMVTIS. 

DOJ strongly encourages this continued 

reporting practice in light of supporting 

comments, the value to law 

enforcement, and the need to protect 

citizens against fraud and theft. 

Moreover, it may be more costly or 

burdensome for states to filter out those 

vehicles not meeting the statutory 

requirement than to submit all motor 

vehicles to NMVTIS. 

Comment: One commenter 

recommended that DOJ clarify when a 

vehicle is no longer a vehicle for 

purposes of reporting, especially in junk 

or salvage yards that often do not 

receive a complete vehicle. 

Response: DOJ offers two 

clarifications in response to this 

comment. First, a vehicle is thought to 

be present for reporting purposes when 

a vehicle frame is present. Similarly, in 

cases where questions as to the ‘‘true 

VIN’’ of a vehicle arise, DOJ has 

determined that the true VIN for 

NMVTIS’s purposes is the VIN on the 

frame of the vehicle. 

State Responsibilities 

17. Start Dates 

Comment: In reference to the 

proposed June 1, 2009, start date for 

state reporting and inquiries into the 

system, several states and AAMVA 

noted that the states would have 

difficulty meeting this date. One state 

commented that ‘‘[t]he requirement to 

budget, upgrade and work to complete 

compliance requirements for NMVTIS 

cannot be met by this timeline—it is 

simply not doable even with the 

political will and funds available. To 

arbitrarily select a date that is not 

workable in any manner is unfair and 

unrealistic.’’ Other commenters noted 

that it would take time to accomplish 

the necessary statutory and regulatory 

changes that may be required, and that 

their states had not budgeted for 

NMVTIS and could not pay NMVTIS 

fees in light of current economic 

circumstances. AAMVA further 

commented that DOJ should establish a 

process for approving ‘‘temporary 

exemptions from the deadline where a 

reasonable timeline for compliance is 

presented and approved by the 

Department.’’ The State of California 

proposed a ‘‘phasing in’’ of participants. 

The dates proposed by states as 

alternative start dates ranged from 2010 

to ‘‘1 year from the date funding is 

secured’’ by the state. 

Response: Although DOJ has worked 

closely with the system operator to 

reduce the need for state system 

modifications, and although the 

requirements of the Act have been in 

place since 1992, DOJ understands that 

it will take time for states to implement 

some provisions of the regulation. To 

provide relief in this regard, DOJ has 

elected to extend the compliance date 

for states not yet participating to January 

1, 2010. By this date, all states and the 

District of Columbia will be required to 

provide daily title transaction updates 

to NMVTIS, make inquiries into 

NMVTIS before issuing a title on a 

vehicle coming in from out-of-state, and 

paying any user fees that may be billed 

by the operator. The Department 

believes that the states can comply by 

that date. Similarly, DOJ has decided 

against a ‘‘phasing in’’ approach to state 

participation commencement because 

there is no equitable way of selecting 

phasing dates and participants in each 

phase. DOJ points out that most of the 

provisions required to be implemented 

by January 1, 2010, are essentially the 

same requirements that have been a part 

of the Anti-Car Theft Act since either 

1992 or 1996, and states, therefore, have 

had at least 12 years to implement the 

provisions of the Act. Thirteen states 

have already done so without 

regulations in place. 

Comment: One commenter noted that 

the proposed start date is just prior to 

an AAMVA-announced decision to 

continue as the operator of the system 

and therefore creates a conflict for states 

should AAMVA decide not to continue 

as the operator. 

Response: AAMVA has assured DOJ 

that should a decision be made in 

August of 2009 to discontinue its role as 

the operator, AAMVA will continue to 

provide transition services and 

continuity until a new operator is 

identified and is able to assist states that 


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rely on NMVTIS in their daily 

operations. 

Comment: One commenter asked how 

the proposed start date had been 

determined and has requested 

justification for the date. The 

commented wrote that in the absence of 

this justification, the date appears 

arbitrary. The State of Illinois motor 

vehicle administration maintained that 

‘‘the proposed timeframe for 

implementing the NMVTIS program 

under these rules is unrealistic to the 

point of being absurd.’’ Although that 

Illinois agency conceded that the start 

date was likely driven by ongoing 

litigation and a court order, the 

commenter noted ‘‘that [the] order is 

either currently under appeal and a stay 

of enforcement should be sought 

pending appeal, or the Department of 

Justice [may have] chose[n] not to seek 

an appeal.’’ 

Response: The proposed start date 

was chosen after an analysis of 

historical timelines to provide batch 

data to the system, the number of states 

that currently have implementation 

funding from DOJ either directly or 

through AAMVA, the number of states 

that have indicated previously that they 

were working towards implementation 

already, and an expected release of 

stand-alone access to facilitate title 

verifications. As noted previously, 

however, the Anti-Car Theft Act has 

been in place for over 16 years, and 

many states have already implemented 

the provisions beyond the minimum 

specifications. Finally, the court order 

does not affect the state-implementation 

date in any way, and in fact is not even 

mentioned in that order. 

Comment: Several state motor vehicle 

administrations asked what penalties 

are in place for states that do not 

implement prior to the required start 

date and what provisions will be made 

for jurisdictions that are in process or 

intend to implement at a later date. 

Response: While DOJ will place its 

priority on supporting state 

implementation, DOJ would review 

state refusals to participate to determine 

the proper response. DOJ also will work 

with state officials in support of 

NMVTIS to encourage state compliance. 

This outreach could include contacts 

with state legislatures, governors, 

consumer-action networks, and law 

enforcement associations. 

Comment: One commenter suggested 

that DOJ publish a map of participating 

and non-participating states, so that 

citizens can observe the participation 

status of every state. 

Response: DOJ will make this map 

available on www.NMVTIS.gov and also 

will notify every consumer that accesses 

the site which states are not 

participating. 

Comment: The State of Alaska 

commented that ‘‘there should be a 

process in place that allows states to 

continue to issue titles when NMVTIS is 

not operational during states’ normal 

business days and hours.’’ Alaska 

recommended that states be permitted 

to ‘‘issue titles when NMVTIS is not 

operational, hold the inquiries in a 

queue and submit the queued inquiries 

when NMVTIS is operational. If a 

problem is detected with a title, it 

would be revoked.’’ The State of Illinois 

commented that standards of 

performance should be established to 

address these issues. 

Response: While NMVTIS is typically 

only down for various reasons between 

1 a.m. and 6 a.m. Eastern Time and one 

Sunday morning each month, there are 

processes in place for unexpected down 

time during state business hours. While 

specific processes vary by state 

according to state business processes, 

there are methods of continuing offline, 

such as mailing the new title at a later 

time, issuing a temporary title, etc. DOJ 

cannot alter the Anti-Car Theft Act’s 

requirement to make a NMVTIS inquiry 

prior to issuing a new title. Therefore, 

new titles should not issue when 

NMVTIS is unavailable. Current system 

response time is less than three seconds 

per inquiry, and the number of 

unexpected system down times has 

been minimal. DOJ notes that the 

NMVTIS connection has not been 

‘‘down’’ for 30 minutes or more at any 

time during the last three years, 

demonstrating that it is a reliable 

connection and service. 

Comment: A state motor vehicle 

administration agency suggested that 

the requirement for an ‘‘instant title 

verification check’’ is problematic for 

states that do not issue titles over-thecounter. The commenter suggested that 

the word ‘‘instant’’ be removed from the 

final rule. 

Response: Some states do not issue 

titles ‘‘instantly.’’ The ‘‘instant title 

verification check,’’ therefore, may take 

place after the customer has left the title 

administration agency but before a new 

title is issued. In these cases, states may 

make the NMVTIS inquiry when 

appropriate in the titling process, so 

long as the inquiry is made and title 

verified before a new permanent title 

issues. 

Comment: One commenter asked if a 

title-verification check would need to be 

performed on a state title that was being 

reassigned after being purchased from 

an out-of-state dealer. 

Response: It is unclear from the 

comment if the commenter was referring 

to a title being transferred out-of-state or 

into the state. States are required to 

check incoming titles related to vehicles 

from out-of-state. States are not required 

to check titles being transferred out of 

the state. With regard to the need to 

verify titles during dealer reassignment 

or the transfer of vehicles from one 

dealer to another, the Act requires that 

states verify the title of any automobile 

coming from another state, which DOJ 

has determined includes dealer 

reassignments when involving dealers 

in different states. 

Comment: One commenter argued 

that the system should provide state 

motor vehicle titling agencies with 

sufficient information to resolve 

discrepancies during the titleverification process. 

Response: NMVTIS provides state 

motor vehicle-title administrations with 

all relevant data in the system and a 

seamless and secure electronic 

connection to other online state title 

records. NMVTIS will make available 

any additional information within 

NMVTIS that may be needed to resolve 

such discrepancies. In the last year 

alone, the system generated 45 million 

secure messages and notifications and 

made 18.4 million update transactions. 

Comment: One commenter noted that 

information gleaned from a state’s 

‘‘instant title verification,’’ such as 

reports of prior removal of a vehicle 

from the vehicle population by export, 

destruction, reported existence in a 

salvage or junk yard, or other indication 

that the vehicle should not be present, 

should result in a physical inspection of 

the vehicle to determine the validity of 

the title and the vehicle. 

Response: While DOJ agrees that such 

reports or results will flag for states the 

title transactions and vehicles that 

should be further reviewed prior to 

undertaking a new title transaction, DOJ 

cannot require such inspections. It is 

each state’s responsibility to institute 

policies and procedures for resolving 

such concerns. This comment does 

illustrate how NMVTIS can ‘‘flag’’ for 

states those vehicles and transactions 

that should be carefully reviewed to 

prevent fraud and theft. 

Comment: One state motor vehicle 

administration asked how NMVTIS will 

obtain data from the insurance 

companies and junk and salvage yards. 

Response: Insurance carriers, junk 

yards, and salvage yards are required to 

report the data enumerated in the Act 

and regulations. The operator will 

identify more than one reporting 

mechanism for electronic reporting, in a 

format prescribed by the operator. 

AAMVA and DOJ will identify the 


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official reporting mechanisms and 

processes via www.NMVTIS.gov. 

Comment: The Nevada Department of 

Motor Vehicles complained that 

requiring states to provide ‘‘the date the 

vehicle was obtained is an expensive 

and time consuming process’’ and that 

states should be permitted to continue 

sending the title-issue date instead. 

Response: There is no requirement 

proposed for states to submit the date a 

vehicle was obtained. This requirement 

is in relation to insurance carrier and 

junk and salvage reporting. 

Comment: The Oregon Department of 

Motor Vehicles commented that it 

currently only collects odometer 

information on those vehicles subject to 

federal odometer requirements and 

would be burdened to collect such 

information on all vehicles. The 

National Salvage Vehicle Reporting 

Program argued that states and insurers 

should be required to include mileage 

reporting in their data provided to 

NMVTIS. 

Response: States are only required to 

provide odometer information on those 

vehicles subject to federal odometer 

requirements, 49 U.S.C. 32705, and not 

on all vehicles unless already recorded 

by the state. States are required to 

provide to NMVTIS the most recent 

odometer reading for such vehicles and 

any later odometer information 

contained within state title records. DOJ 

strongly encourages all reporting 

entities to include odometer readings 

where available. 

Comment: One commenter 

recommended that the final rules spell 

out what is actually required from the 

states and how (i.e., in which format) 

this information is to be provided. 

Another commenter, the California State 

Motor Vehicle Title Administration, 

recommended that the rule be revised to 

require information that is consistently 

available across all states and that only 

information held by state titling 

agencies be subject to reporting 

requirements. 

Response: DOJ will clarify what is 

required of each state and will describe 

format issues to the extent practical and 

appropriate. DOJ cannot simply choose 

to use only information that is available 

in every state consistently for purposes 

of populating the system, as doing so 

would limit the included data and 

significantly reduce the system’s value. 

Comment: One commenter 

recommended that DOJ require that the 

operator be responsible for developing 

at least two approaches for NMVTIS 

inquiries and that DOJ should prepare a 

cost study relating to the expenses 

associated with the fully integrated, 

online approach to compliance. 

Response: There are already at least 

two approaches for state compliance 

with NMVTIS: (1) A fully integrated, 

online approach, whereby a state’s title 

information system automatically 

queries NMVTIS, and NMVTIS provides 

real-time updates to both states involved 

in the transaction; and (2) a stand-alone 

approach, whereby title clerks send 

inquiries to NMVTIS via a web access 

point, and their state sends daily 

updates through a batch upload. A third 

option, serving central site states, 

entailing a process whereby 

verifications are performed via batch 

inquiry, will be explored and may be 

implemented soon. However, DOJ 

disagrees with the need to prepare a cost 

study because an extensive cost-benefit 

study of this issue already exists, and 

cost data from other state 

implementations is already available for 

estimation purposes. 

Comment: The NADA and at least one 

state motor vehicle administration 

commented that DOJ should clarify that 

states are required to submit all brands 

to NMVTIS for all automobiles titled 

within the state. 

Response: DOJ agrees and has 

clarified this requirement under 

25.54(a)(2), consistent with statutory 

requirements. 

Comment: The Minnesota Department 

of Public Safety argued that states 

should be required to provide title 

numbers, ‘‘since it would be nearly 

impossible to establish the ‘validity and 

status’ of purported titles without 

them.’’ 

Response: Participating states already 

have access through NMVTIS to observe 

the full title of record, including the title 

numbers and other information needed 

to establish the validity and status of 

titles presented. However, DOJ 

encourages the states to voluntarily 

submit that information to NMVTIS 

with the approval of the operator and 

the Department. 

Comment: The Minnesota Department 

of Public Safety commented that ‘‘the 

proposed rule also would require states 

to provide [‘t]he name of the state that 

issued the most recent certificate of title’ 

and ‘[t]he name of the individual or 

entity to whom [it] was issued’ when 

making an inquiry to NMVTIS. This 

information is not, and cannot be, 

recorded in MnDVS’ current title 

information system.’’ 

Response: This language was taken 

from the Anti-Car Theft Act to describe 

what information would be needed in 

order for states to make an inquiry into 

NMVTIS. Since the passage of the AntiCar Theft Act, and with the very recent 

development of a standalone access 

model that only requires a VIN to 

search, these requirements have 

changed and this information is no 

longer needed. At the present time, only 

the VIN is needed to make an inquiry. 

This update will be reflected in the final 

rule. 

Comment: The West Virginia 

Department of Transportation argued 

that some states exempt vehicles that 

reach a certain age from the 

requirements of titling, and that these 

vehicles should be exempt from 

reporting. 

Response: The rule requires states to 

report on all automobiles included in 

the states’ titling systems, regardless of 

age. However, if state law exempts 

certain vehicles from titling, those 

vehicles need not be reported to 

NMVTIS. The state should make the 

operator aware of these exceptions, 

however, so that consumers in the state 

and in other states are advised of this 

exception, which they may take into 

account when checking the history of 

vehicles through NMVTIS. 

18. Unfunded Mandate 

Comment: Commenters argued that 

the mandate for NMVTIS has not been 

funded, and that the requirement for 

compliance has not been applied or 

enforced for the 15 years of this process. 

On the other hand, one commenter 

noted that NMVTIS is not an unfunded 

mandate in view of DOJ’s investment of 

over $15 million in the system since its 

inception and in view of DOJ grants to 

states to support system participation. 

Response: The Anti-Car Theft Act 

explicitly requires that user fees, rather 

than federal funding, sustain NMVTIS. 

Although no funds have been 

appropriated to DOJ for NMVTIS, DOJ 

has invested over $15 million in 

NMVTIS, with a substantial portion 

going to states to assist them with 

compliance. The U.S. Department of 

Transportation previously provided 

funding during the period it was 

responsible for the system, which ended 

in 1996. 

Comment: One commenter noted that 

DOJ’s determination that the rule does 

not meet the threshold cost or burden 

requirements of the Unfunded Mandate 

Reform Act of 1995 is not sufficient in 

and of itself to satisfy the legal 

responsibilities. Specifically, the 

commenter noted that ‘‘[t]he fact that 

the Department of Justice (DOJ) has 

decided that it is a small enough 

amount of money that the Unfunded 

Mandate Reform Act of 1995 does not 

apply, or that the DOJ has determined 

that per Executive Order 13132, the cost 

imposed does not provide sufficient 

cause for a Federalism issue, is not 

sufficient.’’ 


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Response: The Department of Justice, 

based on its own analysis, made 

appropriate determinations based on 

law and regulation. The White House 

Office of Management and Budget 

reviewed and approved this analysis. 

Comment: The City and County of 

Honolulu Division of Motor Vehicle, 

Licensing and Permits disagreed with 

the aggregate amount estimated by DOJ 

in the ‘‘Unfunded Mandates Reform Act 

of 1995’’ section of the proposed rule 

‘‘because their estimate is based on the 

less expensive standalone web solution 

which operationally degrades customer 

service and increases the work of our 

over-the-counter staff.’’ The commenter 

further noted that the aggregate amount 

should ‘‘factor in the development and 

deployment of the much more costly 

integrated on-line solution option that 

will ultimately be the final solution that 

states will move towards’’ and should 

include the additional costs that will 

result ‘‘from the increased load on the 

system to each jurisdiction when all 

jurisdictions, insurance companies, 

salvage yards, consumers, law 

enforcement, etc. are given access to the 

system.’’ The commenter concluded by 

stating that using this methodology, the 

aggregate costs will ‘‘easily exceed the 

$100 million resulting in the 

applicability of the Unfunded Mandates 

Reform Act.’’ 

Response: The methodology 

employed to calculate the aggregate 

costs of the program uses the minimum 

requirements for system participation. 

DOJ sees no purpose in using a level of 

participation not required by DOJ as the 

basis for the cost calculations. While 

states ultimately may move towards an 

integrated, online solution for 

efficiency, and although this method of 

participation does benefit NMVTIS, DOJ 

does not require it for compliance. It is 

DOJ’s responsibility to determine the 

least-costly, most-effective way for 

implementing the solution, and that is 

the methodology used in the proposed 

rule. Further, a fully implemented 

system, with all jurisdictions, insurance 

carriers, junk and salvage yards, 

consumers, and law enforcement 

personnel accessing and reporting, does 

not translate directly into an increase in 

costs for states. In fact, it could very 

well decrease state costs through offset 

fees. 

Comment: The City and County of 

Honolulu Division of Motor Vehicle, 

Licensing and Permits further 

maintained that because the combined 

city/county government is a ‘‘small’’ 

government, it is uniquely impacted by 

the regulations and is entitled to relief. 

Additionally, this commenter 

contended that the operator’s 

requirements for extracting and 

mapping the required data are 

burdensome, and that should the 

operator undertake these 

responsibilities, batch data submission 

would be much easier to achieve. 

Response: The Unfunded Mandates 

Reform Act and 5 U.S.C. 601(5) define 

‘‘small governmental jurisdiction’’ 

generally as rural jurisdictions, those 

with populations under 50,000, and 

areas of limited revenues. Based on this 

definition, the city/county identified by 

the commenter would not appear to 

qualify as a ‘‘small governmental 

jurisdiction.’’ In terms of the operator’s 

requirements and the burden associated 

with such requirements, DOJ will 

continue to direct the operator to 

provide as much flexibility in 

requirements as is feasible, and DOJ will 

continue to provide technical assistance 

upon request to identify alternative 

solutions where necessary. 

19. Inquiring Into NMVTIS Versus Other 

Systems 

Comment: More than one state motor 

vehicle administration commented that 

NMVTIS will not provide a more 

substantial benefit than checking thirdparty vehicle history databases which 

some states already check. One state 

motor vehicle administration suggested 

that the law was unclear as to whether 

the Anti-Car Theft Act required states to 

check NMVTIS or another third-party 

database, stating that ‘‘[t]he previous 

intent was to provide a system that a 

state may utilize to verify title before 

titling a vehicle. This left open the use 

of other systems, such as Carfax, to 

research titles. The requirement to 

mandate use of NMVTIS to verify titles 

is unrealistic, unworkable and unfair. 

The intent of the process is to protect 

citizens against fraud. NMVTIS is not 

the only system that supports this 

intent. Limiting research to this system 

could also lead to misinformation and 

misapplication of process.’’ 

Response: The Anti-Car Theft Act 

requires states to verify titles through 

NMVTIS. No other system, public or 

private, can provide the same level of 

assurance as NMVTIS once full 

compliance is reached. DOJ also points 

to comments submitted by several 

organizations that highlighted concerns 

with the reliability of third-party 

databases. States wishing to provide 

increased protections for consumers are 

encouraged to continue to check such 

private databases in addition to making 

the NMVTIS inquiry as required by 

federal law. 

Comment: One commenter noted that 

‘‘the fully implemented system * * * 

will also provide consumers with a 

source of comprehensive information. 

Current services such as Carfax have 

partially filled the need for information, 

but these providers do not offer as 

current and complete titling information 

as the proposed NMVTIS system.’’ 

Response: NMVTIS provides a unique 

service in terms of the source of its data, 

its comprehensiveness, and its 

timeliness. Services such as CARFAX 

will continue to provide information to 

the public that is not intended to be 

included in NMVTIS, such as vehicle 

repair histories, etc. For this reason, 

these private services will continue to 

offer unique and beneficial services. 

20. Time Lags 

Comment: Several commenters noted 

that allowing states to upload data (e.g., 

batch uploading) may create a ‘‘time 

lag’’ that could impact law enforcement 

investigations and impede the ability of 

the system to accomplish its goals. One 

commenter suggested that it would be 

better to wait until states secure the 

necessary funding before proceeding 

with implementation. 

Response: DOJ has examined this 

issue closely with the system operator 

and with third-party vehicle-history 

providers. While many third-party 

databases experience lag time of several 

weeks or months in getting state 

updated data, NMVTIS is designed to 

significantly reduce or eliminate the lag 

time entirely to provide reliable 

information to users. For this reason, 

states choosing the stand-alone method 

of participation and batch uploads will 

be required after initial set-up to 

establish batch updates at least every 24 

hours. This requirement will greatly 

diminish the possibility of exploitation 

of lag time and provide a more up-todate vehicle history check than is 

currently available. States do have the 

option of implementing in fully online 

mode where data transmission is in real 

time. DOJ does not have the flexibility 

to delay implementation until states 

have funding to implement the fully 

online mode. Pursuant to a federal 

district court order, DOJ is required to 

have the rules published and system 

available by January 30, 2009. 

Comment: One state motor vehicle 

administration noted that when using 

the stand-alone method of making 

inquiries before issuing a new title on 

out-of-state vehicles, an impact on 

customer service is expected. 

Specifically, the commenter stated that 

an additional ‘‘three to five minutes of 

processing time’’ is expected due to the 

fact that title clerks in this 

administration are using a mainframe 

that does not allow simultaneous 

internet access, and that to make such 


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a check, the clerk would have to log out, 

make the NMVTIS inquiry, and log back 

in to the mainframe for each out-of-state 

title transfer. 

Response: The lower cost stand-alone 

method of participation is not as timely 

as the fully integrated online method. 

DOJ is committed to working with states 

and the operator to identify new 

alternative methods to reduce or 

eliminate such inefficiencies, such as 

dedicating one internet-capable PC that 

could be available to all clerks with the 

NMVTIS page continuously running. 

With system response time currently at 

three seconds or less, this alternative 

may impact customer service less. 

Ultimately, however, although the 

stand-alone method of making inquiries 

is far less costly for states to implement, 

it may be less efficient than the fully 

integrated, online method. 

Comment: One state motor vehicle 

administration recommended that ‘‘all 

surrendered titles should be verified 

when being transferred[,] and the rule 

should not limit this requirement only 

to ‘purchased’ vehicles. Without 

verifying all surrendered titles it is not 

known whether the title surrendered is 

the latest title issued[,] and there are 

many reasons titles are transferred other 

than through a sale.’’ 

Response: DOJ agrees with this 

recommendation and notes that the final 

rule clarifies that the requirement to 

make verifications pertains to any title 

or vehicle coming in from another state, 

including transfers. States are also 

strongly encouraged to perform such 

verifications on every title transaction, 

which is most effective when 

implementing via the online, integrated 

approach. 

Comment: One state motor vehicle 

administrator asked if manufacturers’ 

certificates of origin (MCOs) must be 

verified as well. 

Response: Because MCOs are not 

vehicle titles per se, states are not 

required to verify MCOs in NMVTIS. 

However, DOJ strongly recommends 

that state motor vehicle administrators 

make inquiries on all title transactions, 

including initial registration of an MCO, 

to identify and eliminate fraud and to 

protect consumers. 

Insurance Carriers 

21. Reporting on Recent-Year Vehicles 

Comment: One commenter asked 

‘‘[w]hat is the reason to require 

insurance carriers to report only 

vehicles manufactured within the past 

five model years that they consider junk 

or salvage? If these vehicles will always 

go directly to junk or salvage yards, 

won’t the vehicle be reported there 

anyway? Conversely if there is an 

opportunity for other disposal of the 

vehicles, shouldn’t the insurance 

carriers be required to report all vehicles 

since the VINs could still be stolen for 

swapping?’’ Other commenters noted 

that vehicles older than five years are 

often involved in consumer fraud and 

encouraged provisions for the database 

to cover the same ten-year age range as 

is used for odometer reporting. 

Response: The Anti-Car Theft Act 

only required insurance carriers to 

report vehicles in the current and four 

prior model years. DOJ is not able to 

reverse or alter this limitation by 

increasing the reporting parameters. 

Junk and salvage yards later may report 

some vehicles that insurance carriers are 

not required to report. The Department, 

however, encourages insurance carriers 

to report older vehicles. 

Comment: ASPA commented that 

section 25.55(b)(3) of the proposed rule 

requires insurance carriers to report 

‘‘the name of the individual or entity 

from whom the automobile was 

obtained or who possessed it when the 

automobile was designated as a junk or 

salvage automobile,’’ which would seem 

to be two different individuals or 

entities in most cases. Further, ASPA 

notes that it is unclear if the insurance 

carrier would know the name of the 

owner when it files the report. 

Response: Although the proposed rule 

required reporting of the name of the 

individual or entity either from whom 

the automobile was obtained or who 

possessed it when the automobile was 

designated as a junk, salvage, or totalloss automobile, the Anti-Car Theft Act 

specifically states that both names are 

required. Reporting both names is 

necessary to establish a ‘‘chain of 

custody’’ and for other law enforcement 

and consumer-protection purposes. DOJ 

changed this language in the final rule 

to require both names pursuant to the 

Anti-Car Theft Act. In reference to the 

concern that insurers may not know the 

name of the owner, most carriers do 

possess this information, as this would 

be the owner of the automobile at the 

time the vehicle was determined a total 

loss, salvage, or junk. 

Comment: Farmers Insurance 

commented that the ‘‘trigger’’ for 

insurance-carrier reporting should be 

when the insurance carrier sells the 

vehicle or when the customer 

determines it will retain ownership of 

the vehicle, because such dispositions 

may not be known for as much as 90 

days after the loss occurs. 

Response: Because disposition may 

not be known at the time of initial 

reporting, this rule allows the insurance 

carrier to file a supplemental 

disposition or update. Many comments 

emphasized the importance of timely 

reporting, even when the named owner 

in the initial report is the insurance 

company. 

Comment: Farmers Insurance 

suggested that a 12-month grace period 

should be granted for insurance 

reporting to begin in light of ‘‘proper 

system upgrades’’ that may be required. 

Response: DOJ is not able to provide 

a grace period, as the court has ordered 

the reporting to begin by March 31, 

2009. Additionally, because DOJ aims to 

enable third-party reporting through 

organizations that may already receive 

such data from insurance carriers, the 

burden of any system changes should be 

minimal. 

22. Non-Required Data 

Comment: One commenter argued 

that ‘‘[t]he proposed rule overstates the 

benefits provided to consumers. 

Particularly, the fact that insurance 

carriers are only ‘strongly encouraged to 

provide * * * other information 

relevant to a motor vehicle’s title’ 

undermines the broad benefits implied 

by the rule.’’ ‘‘The type of information 

not reported includes the reason why 

the insurance carrier may have obtained 

possession of the motor vehicle—flood, 

water, collision, fire damage, or theft.’’ 

The NADA further recommended that 

the rule should require insurers to 

report the reasons they obtained 

possession of the vehicle to prevent 

brand washing and fraud. Additionally, 

this information would assist in cases 

where a vehicle is considered a total 

loss for purely economic reasons (e.g., 

theft). Several insurance-related 

organizations contended that for any 

voluntary reporting that may be 

contemplated, immunity provisions 

must apply to this voluntary reporting 

as well. 

Response: DOJ disagrees that the rule 

overstates the benefits of NMVTIS. DOJ 

does agree, however, that the reason for 

the total-loss or salvage designation by 

insurance carriers may be of importance 

to a prospective purchaser and to others. 

Not only does this protect the 

consumer’s interest, but the additional 

reporting criteria also benefit insurance 

carriers. Therefore, the Department 

strongly encourages insurance carriers 

to report this data element. 

Comment: AAMVA commented that 

unless the rule requires ‘‘junk and 

salvage dealers’’ to report the percentage 

of damage sustained by each vehicle in 

their inventories to the states, the states 

would not be able to consider applying 

a state junk or salvage brand on these 

vehicles. 


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Response: States will not be in a 

position to make such judgments based 

on junk- and salvage-yard operator 

reporting. Insurance carriers have ready 

access to this information, which is the 

typical basis for a state’s designation. 

Although the reporting of junk- and 

salvage-yard inventories was likely not 

intended to support state-branding 

decisions, reporting of junk- and 

salvage-yard inventories may be helpful 

to states in making brand decisions, but 

likely not conclusive. Although such 

vehicles may not end up branded by the 

states, consumers and other states have 

the benefit of knowing that the vehicle 

was in the possession of a junk or 

salvage yard and therefore may wish to 

inspect the vehicle or to require an 

inspection before making purchase or 

titling decisions. DOJ is not in a position 

to require reporting of the percentage of 

damage. However, insurance carriers 

and others are encouraged to report this 

information. 

Comment: One commenter asked 

‘‘[h]ow will DOJ know which states, 

junk, salvage, and insurance companies 

are reporting information and reporting 

all the information that is required? Will 

someone audit their reports? I 

recommend that the system operator 

and the DOJ both make a list of who is 

reporting and publish that list * * * 

and audit reporting compliance.’’ The 

commenter also suggested that DOJ 

require entities to report the company 

name, address, and phone number for 

any reports submitted. Another 

commenter asked who would inform 

insurance carriers and junk and salvage 

yards of the requirement to report 

information to NMVTIS, and who 

would identify those organizations 

required to report. 

Response: DOJ will instruct the 

operator to publish and maintain a list 

of the entities reporting information to 

NMVTIS. The list will include the name 

of the reporting entity, city and state of 

the reporting entity, the date that data 

was last submitted by the entity, and 

any contact information for the 

reporting entity. With regard to who 

would inform reporting entities of the 

requirements, DOJ will work with the 

operator, state-licensing authorities, and 

affected associations and advocacy 

organizations to ensure proper outreach 

and education. 

Comment: Several state motor vehicle 

administrations argued that DOJ should 

limit what non-required data the 

operator could ask for and receive (e.g., 

address of the vehicle owner). Another 

believed that the value of encouraging 

non-required data is unknown, and that 

reporting may only increase the number 

of discrepancies or errors. ISRI 

contended that DOJ should limit the 

ability of the operator to request 

additional, non-required data, because 

the current operator would be 

encouraged to request additional 

information that would generate 

revenues to the benefit of the 

association and its members, creating a 

conflict of interest. The Minnesota 

Department of Vehicle Services 

(MnDVS) argued that the provisions of 

section 25.53(c), which allow the 

providers of non-required data to query 

the system if beneficial in addressing 

motor vehicle theft, ‘‘exceeds the 

authority conferred by Congress, is 

overly broad, and as such represents an 

arbitrary and capricious exercise of 

rulemaking power.’’ Other commenters, 

however, reported that other data may 

be needed for specific purposes and 

argued in support of this flexibility. 

Response: It would be difficult to 

describe what data the operator is 

restricted from asking for or accepting, 

other than social security number, dates 

of birth, and addresses. DOJ points out 

that states need not provide data that is 

not specifically required in these 

regulations or the Act, and DOJ will 

need to approve the acceptance of nonrequired data. Moreover, the nonrequired data that is readily available 

would add great value to some 

consumers, to law enforcement, and to 

others (e.g., NICB flood vehicle 

database, vehicle export data, other 

North American vehicle history records, 

NICB theft file, etc.). While more data 

always increases the chances of 

discrepancies, DOJ does not want to 

discourage this voluntary reporting. 

While the current operator does have 

the best interests of its membership in 

mind, however, it also has expressed 

concern for others affected by the rule 

and will represent the concerns of all 

stakeholders, not as a trade association, 

but as the operator of a DOJ system. In 

response to MnDVS’s comment, DOJ is 

of the opinion that if not in violation of 

the Anti-Car Theft Act or other federal 

privacy statutes, such cooperation is 

necessary and not arbitrary or 

capricious. 

Comment: Several commenters, 

including at least one from the state 

motor vehicle administration 

community, encouraged the inclusion of 

lien-holder information in the data 

provided to NMVTIS in light of the 

difficulty of obtaining this information 

on out-of-state titles and the associated 

budget impact on states. Other 

commenters, including insurancerelated organizations, Assurant 

Solutions, and the NADA, suggested 

that additional data (including lienholder information) will provide a 

crosscheck of information, close up 

loopholes, and improve NMVTIS. 

Response: This comment 

demonstrates the importance of 

allowing the operator of the system to 

request and accept additional 

information beyond the NMVTIS 

requirements. While states and others 

are not required to comply, there may be 

good reason to do so that would result 

in cost savings among the stakeholders. 

In terms of lien-holder information, 

while DOJ is not in a position to require 

that lien-holder information be included 

in the central file, DOJ notes that the 

existing secure network could be used 

in conjunction with the NMVTIS 

central-file information to query the 

current state of record and to access 

lien-holder information in that state’s 

title record through the secure network 

provided by the current operator. 

Queries of and access to the actual state 

records should only be permitted when 

a state has agreed to provide such 

access, when any state application or 

certification procedures are completed, 

and when such access is in conformance 

with the Anti-Car Theft Act, the DPPA, 

etc. 

Comment: One commenter suggested 

that DOJ include registration 

information in the list of required data 

as a means to ensure accurate tracking 

of vehicle ownership. 

Response: Including registration 

information is beyond the scope of 

NMVTIS. Although it may be useful, 

DOJ cannot require such information. 

Comment: The National Salvage 

Vehicle Reporting Program commented 

that insurance-carrier reporting should 

commence on or before March 31, 2009, 

as required by the federal district court, 

and that initial reporting by all covered 

entities should include historical data to 

the extent available, so that NMVTIS is 

complete beginning on March 31. 

Several insurance-related organizations 

or associations reported that ‘‘[t]he start 

date for insurers should be clarified. We 

believe the best approach is to provide 

that the system applies to automobiles 

declared junk or salvage on or after 

April 1, 2009, [and that] the system 

must be established by March 31, 2009. 

However, we prefer that more time is 

provided for insurers to comply.’’ 

Response: DOJ will require that all 

vehicles declared junk or salvage 

(including ‘‘total loss’’) on or after April 

1, 2009, be reported to NMVTIS. 

However, DOJ strongly encourages 

insurance carriers and junk- and 

salvage-yard operators to provide data 

on vehicles that were declared junk, 

salvage, or total loss before that date and 

as far back as 1992, if such data is 

available. 


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Comment: The National Salvage 

Vehicle Reporting Program commented 

that ‘‘NSVRP strongly endorses the 

inclusion in the rules of 3rd party 

enhanced standards that allow for data 

generators to report to NMVTIS more 

completely and more frequently than 

minimally specified in the rules.’’ 

Response: While DOJ is not in a 

position to articulate data-reporting 

requirements or standards regarding 

data that is not statutorily or otherwise 

required, DOJ notes that the National 

Salvage Vehicle Reporting Program has 

worked with nearly every stakeholder 

group affected by NMVTIS to develop 

standards for voluntary reporting to 

NMVTIS that would benefit states, law 

enforcement, consumers, and others. 

DOJ applauds the National Salvage 

Vehicle Reporting Program and strongly 

encourages the operator to adopt these 

standards as suggested voluntary 

compliance standards. While the 

standards cannot be mandated on any 

reporting entity, those entities that 

adopt the standards and report 

voluntarily in a manner that is 

consistent with the standards will be 

providing a significant public benefit. 

Comment: The National Salvage 

Vehicle Reporting Program commented 

that NMVTIS must support the 

electronic MCO process and should 

serve as a catalyst for implementation of 

the electronic MCO system nationwide. 

Response: DOJ is in favor of 

supporting an electronic MCO process 

as a way of eliminating and preventing 

fraud and reducing theft. In addition to 

NMVTIS, the use of the secure 

AAMVAnet communications network 

for states would likely be necessary, and 

it would be AAMVA’s responsibility to 

authorize its use for this purpose. 

Junk Yards and Salvage Yards 

23. Salvage Pools 

Comment: Several law enforcement 

and related commenters strongly agreed 

with the assessment that Salvage Pools 

are one of the most significant sources 

used by criminal groups as a source of 

paperwork and as a way to fund their 

operations. These commenters agree 

that Salvage Pools must report vehicles 

to NMVTIS both when they receive 

vehicles for sale, and when they sell 

those vehicles. These commenters 

further noted that such salvage pools 

have sophisticated technological 

capabilities and should not have any 

problem meeting the reporting 

requirements. Several of these 

commenters noted that in some cases, 

individuals purchase severely damaged 

units at or via these pools and then steal 

a similar make and model for cloning 

purposes. For this reason, these 

commenters also recommended 

reporting the buyer’s name for these 

vehicles. Several national consumeradvocacy organizations also supported 

the constructive definition including 

salvage pools and the requirement to 

add buyer name in the reporting 

requirements. 

Response: DOJ reaffirms its 

determination to include ‘‘salvage 

pools’’ and ‘‘salvage auctions’’ in the 

definition of junk or salvage yards, 

thereby requiring them to comply with 

the corresponding reporting 

requirements. The name of the buyer is 

not reported elsewhere despite being 

very valuable for law enforcement and 

other purposes. DOJ, therefore, added 

the name of the buyer as required data 

to report. Because many of the 

purchasers are reportedly international 

buyers, some of whom have been linked 

to fraud and theft rings that purchase 

such vehicles for clean paper to use on 

stolen vehicles in the U.S., DOJ also will 

add to the requirements an indication 

whether the vehicle is intended for 

export. 

Comment: The Nevada Department of 

Motor Vehicles commented that by 

statute, Nevada requires wreckers and 

salvage pools to apply and transfer their 

salvage titles, junk certificates, and nonrepairable certificates within 10 to 30 

days. Nevada suggested that these 

organizations should be exempt from 

reporting because the DMV already 

sends this data to NMVTIS. 

Response: Junk and salvage yards, 

including salvage pools, are not 

required to report data to NMVTIS if the 

state already reports the required junkand salvage-yard information to 

NMVTIS pursuant to this regulation. 

Comment: One commenter asked 

whether ‘‘the definitions of junk yard 

and salvage yard, which include even a 

single individual, [are] a substantial 

overstep?’’ Several consumer-protection 

organizations also suggested that, with 

respect to the definition of ‘‘in the 

business of,’’ junk and salvage yards 

should be defined as any entity or 

individual meeting the description in 

the definition that acquires or owns five 

or more salvage or junk automobiles 

within the preceding 12 months, which 

is analogous to other similar reporting 

standards. 

Response: DOJ modified the final rule 

consistent with the comment from the 

consumer-protection organizations. The 

qualifier of five or more vehicles is 

taken from federal odometer law, and its 

definition of ‘‘car dealers’’ from 49 

U.S.C. 32702(2). 

Comment: One commenter (CARS of 

Wisconsin) argued that ‘‘information 

about who owned the vehicle prior to it 

being junked is unnecessary.’’ The 

Wisconsin Department of 

Transportation contended that requiring 

junk and salvage yards to report the 

name of the vehicle supplier is 

unnecessary, as is the disposition of 

such vehicles. Wisconsin DOT 

commented that because these vehicles 

are scrapped or destroyed by these 

entities and cannot be returned to road 

use, it is unnecessary to report this 

information. 

Response: Comments from law 

enforcement entities on the proposed 

rule demonstrates that this information 

is of significant value. Additionally, 

even when a vehicle cannot return to 

the road, the VIN can be used to clone 

a stolen vehicle. In states that do not 

have the same junk-branding 

requirements as Wisconsin, a junked 

vehicle can ‘‘live on’’ through a cloned 

stolen vehicle, which will only cease 

once NMVTIS is fully implemented. 

Comment: The Virginia Department of 

Motor Vehicles expressed concern that 

the proposed rule seemed to encourage 

junk- and salvage-yard operators to 

submit data via FTP or facsimile that 

potentially would include personal 

identifying information. 

Response: DOJ encourages all 

reporters to report electronically 

whenever possible. In cases where 

electronic reporting is not an option, 

DOJ will direct the operator to identify 

a reporting procedure to accommodate 

the situation. Regardless of the reporting 

method, DOJ and the operator will 

ensure that all possible safeguard 

measures are taken, including secure 

FTP wherever possible. 

Comment: One commenter requested 

that DOJ require the operator to accept 

junk- and salvage-yard data from any 

junk or salvage yard directly or through 

a third party on their behalf to minimize 

administrative burden. 

Response: DOJ has provided the 

operator with flexibility in identifying 

the specific methods of reporting to 

NMVTIS. It is not in the system’s best 

interest for all required reporters to 

report directly into the system, due to 

technical and business reasons. The 

operator is expected to identify three or 

more different methods of transmitting 

information to NMVTIS and will make 

this information available via its Web 

site, as will DOJ via www.NMVTIS.gov. 

Comment: Several commenters have 

noted that, similar to insurance-carrier 

reporting, junk and salvage reporting of 

vehicle presence in inventory on a 30- 

day basis leaves a significant amount of 

time for fraud and theft to occur. These 

commenters recommended that DOJ 

require reporting of not only presence in 


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inventory, but also disposition of the 

vehicle. The recommendations for the 

revised reporting timeline varied in the 

recommendations from immediately to 

several business days. 

Response: The Anti-Car Theft Act 

defines the reporting timeline, and, 

therefore, DOJ can only require 

reporting on a monthly basis. DOJ does 

strongly encourage all reporters to 

report data as soon as possible or on a 

daily basis. 

Comment: ASPA commented that 

‘‘while ‘salvage pools’ were not 

included by Congress in the ‘Anti-Car 

Theft Act of 1992’ as an entity with 

reporting requirements, the DOJ sweeps 

our industry into the group which has 

these reporting requirements. * * * The 

salvage pool industry wants to be 

helpful in combating vehicle theft, but 

we want to insure that any reporting 

requirements imposed on our industry 

are reasonable, in light of the fact that 

Congress did not specifically place 

reporting requirements on salvage 

pools.’’ 

Response: DOJ appreciates ASPA’s 

declaration and will work to ensure that 

reporting requirements on every 

industry are reasonable. The reporting 

requirements proposed for salvage pools 

are the same requirements placed on 

salvage yards, which also handle 

salvage vehicles. Because a salvage pool 

is in the business of acquiring 

(constructively defined to include 

handling or controlling on behalf of) 

salvage automobiles for resale, it fits 

well within the statutory definition of 

salvage yards. 

Comment: ASPA commented that 

because salvage pools generally serve as 

‘‘agents’’ for insurance carriers, salvage 

pools should only be subject to the 

reporting requirements of insurance 

carriers as they relate to the age of 

automobile to be reported. 

Response: DOJ disagrees with this 

recommendation because salvage pools 

are included in the definition of salvage 

yards, as opposed to insurance carriers. 

Comment: ISRI and the National 

Salvage Vehicle Reporting Program both 

suggested an exemption from reporting 

for vehicles acquired from an entity that 

is obligated to meet the reporting 

requirements of the Act and rule. They 

argued that this exemption is necessary, 

not because of the burden of double 

reporting, but because, in the case of the 

scrap-metal-recycling industry, many 

vehicles are acquired after being 

flattened or crushed to an extent that a 

VIN cannot be reasonably obtained. 

Response: Many scrap-metal 

processors and shredders do receive 

flattened and bundled vehicles and 

vehicle parts. In those cases, recording 

a VIN for every vehicle is nearly 

impossible. Both ISRI and the National 

Salvage Vehicle Reporting Program 

assert that such entities are at the ‘‘end 

of the line’’ in handling end-of-life 

vehicles, and almost always receive 

vehicles from those who are required to 

report on the vehicle before it is crushed 

or bundled. Additionally, with scrapmetal processors and shredders, there is 

no possibility that the vehicle will be 

subsequently purchased for operation 

on public roads by an unsuspecting 

consumer. However, cloning and 

destruction of stolen vehicles remain a 

threat. For these reasons, DOJ created an 

exception for reporting to NMVTIS in 

cases where a scrap-metal processor or 

shredder confirms that the vehicle 

supplier reported the required data to 

NMVTIS. Scrap-metal processors and 

shredders that receive automobiles for 

recycling in a condition that prevents 

identification of the VINs need not 

report the vehicles to the operator if the 

source of each vehicle has already 

reported the vehicle to NMVTIS. In 

cases where a supplier’s compliance 

with NMVTIS cannot be ascertained, 

however, scrap-metal processors and 

shredders must report these vehicles to 

the operator based on a visual 

inspection, if possible. If the VIN cannot 

be determined based on this inspection, 

scrap-metal processors and shredders 

may rely on primary documentation 

(i.e., title documents) provided by the 

vehicle supplier. 

Lenders and Automobile Dealers 

Comment: Iowa Attorney General 

Thomas J. Miller supported the DOJ 

proposal that lenders and auto dealers 

have access to NMVTIS in order to 

further NMVTIS’s goals of reducing 

crime, especially fraud. 

Response: Commercial consumers 

will have access to NMVTIS. 

Comment: Assurant Solutions argued 

that lenders and dealers need not only 

the ability to query NMVTIS for 

information, but also need the ability to 

communicate and electronically 

exchange motor vehicle information to 

achieve greater efficiencies in title 

processing, and to limit the number and 

type of paper-based transactions as a 

strategy to significantly decrease fraud. 

Specifically, the commenter suggested 

that lenders and dealers communicate 

errors or changes to NMVTIS. 

Response: Communication to and 

from NMVTIS is currently facilitated 

through the use of the current operator’s 

secure and proprietary network, 

AAMVANet. This network is not a 

component of NMVTIS per se, and 

therefore the operator governs use of 

this network for communication 

between NMVTIS and its users. In terms 

of providing lenders and dealers with 

the ability to make corrections and 

changes, DOJ notes that it has concerns 

with authorizing any user other than a 

state motor vehicle administration or its 

agents (where applicable) to make 

corrections directly or changes to 

NMVTIS data. However, DOJ directed 

the operator to develop a process for 

reporting possible errors and requesting 

changes that may also be used by 

lenders and dealers. 

Responsibilities of the Operator of 

NMVTIS 

24. Consumer Access Methods 

Comment: One commenter argued 

that ‘‘[t]he Web-based access should be 

open to private individuals who wish to 

check the status of a prospective 

purchase.’’ And the NADA supported 

the provisions in the proposed rule 

allowing dealers to access NMVTIS as 

prospective purchasers, which is likely 

to help thwart motor vehicle-title fraud. 

A consumer-advocate attorney 

commented that if this information 

becomes widely and readily available, 

the vehicle-fraud industry will be 

significantly reduced. 

Response: Prospective purchasers 

(including dealers who purchase 

vehicles for resale) are required to have 

access to information necessary to make 

an informed purchase decision, and DOJ 

will require that consumer access be 

available by January 30, 2009. 

Comment: Experian Automotive 

argued that DOJ should not overlook the 

significant costs involved in marketing 

and distributing vehicle-history 

information, and suggested that these 

costs are beyond what the operator can 

provide. 

Response: These costs are significant. 

Under the model of third-party portal 

providers (as opposed to a single, 

operator-provided consumer access 

model), the third parties, not the 

operator or DOJ, will bear the most 

significant marketing and distribution 

costs. It is partly because of these costs 

that the third-party model was selected. 

Comment: Experian Automotive 

argued that NMVTIS is not chartered to 

provide the level of information and 

support that Experian or other private 

vehicle-history report companies 

provide. 

Response: DOJ has no intention of 

competing with private vehicle-historyreport companies. Those private 

services possess data that NMVTIS does 

not intend to provide (e.g., vehicle 

repair and service histories). NMVTIS is 

simply intended as a governmentsponsored service to verify the title and 


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brand history of a vehicle reliably, 

thereby preventing fraud and theft. 

Comment: Several motor vehicle 

administrations and one services 

organization argued that the operator 

should not be permitted to sell bulk 

vehicle data from any state, which 

would effectively allow private 

information resellers to bypass 

contractual agreements and seek the 

state’s database from the NMVTIS 

operator. Additionally, at least one state 

motor vehicle administration suggested 

that the operator should conduct regular 

program and security audits and should 

screen potential access providers. 

Response: The operator will not sell 

the NMVTIS central file or any 

particular state’s dataset (i.e., all VINs 

from a particular state). All information 

provided will be in response to VIN 

queries, except in cases of law 

enforcement queries, which could 

include searches of NMVTIS by 

reporting entity name, names associated 

with reports, location, etc. Data 

provided to NMVTIS will remain in the 

possession of the operator and any 

contractors supporting the operator (i.e., 

data center hosting or backup). 

Consumer-access providers are 

restricted from downloading and storing 

bulk NMVTIS data for resale or reuse 

and must use data in accordance with 

the Anti-Car Theft Act. Any entity using 

NMVTIS data in a manner inconsistent 

with these regulations may not be 

covered under the Act’s immunity 

provisions. The operator shall conduct 

regular reviews and audits of security 

arrangements and program compliance 

and shall work with DOJ to establish 

access-provider standards to ensure that 

the access providers are professional 

and reputable, and that information and 

access are provided according to the 

Act. 

Comment: One commenter argued 

that ‘‘[t]he responsibilities of the 

operator of the NMVTIS system are 

confusing in subsection (b)(3) and (b)(5), 

[as] they appear to have the same 

meaning and impact.’’ 

Response: These subsections describe 

what the operator of NMVTIS is 

statutorily required to provide to users 

of the system, including information 

regarding a vehicle’s current or past 

status as a junk or salvage vehicle. In 

other words, NMVTIS will make 

information about vehicle history 

available to consumers, state titling 

agencies, law enforcement, and others 

through an electronic (e.g., Web-based) 

inquiry. Although subsections (b)(3) and 

(b)(5) overlap somewhat, it is possible 

that the operator may have information 

indicating that a vehicle has been 

branded a junk or salvage that did not 

arise from a report submitted by a junk 

or salvage yard or insurance carrier. 

Comment: One commenter noted that 

‘‘[w]ith the expected low 

implementation costs for this consumer 

system, there are major benefits to 

centralizing the system within a 

government Web site in order to reduce 

further consumer misinformation. In the 

alternative, a detailed scheme 

prohibiting third-parties from charging 

certain fees for accessing the system’’ 

would be desirable. The commenter 

further emphasized the importance of 

regulating third-party involvement. 

Response: Third-party involvement 

will be regulated and monitored by the 

operator and DOJ. DOJ believes that this 

is the most sensible manner of 

implementing consumer access. DOJ has 

established www.NMVTIS.gov as a 

central source of reliable information 

concerning NMVTIS, providers, 

requirements, etc. 

Comment: One commenter suggested 

that the operator be required to establish 

a data-quality plan that may rely on 

technological tools to scan for and flag 

errors in VINs that may be reported to 

the system. 

Response: DOJ agrees with this 

comment and will direct the operator to 

adopt all reasonable strategies and 

techniques for ensuring data quality. 

Comment: In response to DOJ’s 

request for comments on methods of 

NMVTIS access, several commenters 

agreed that third-party providers may be 

better suited for handling information 

access than a single provider. The 

Minnesota Department of Public Safety 

argued, however, that private third 

parties should not be permitted to have 

access to NMVTIS data in the manner 

proposed, with little oversight, or to 

generate profit from the data contributed 

by the states. Additionally, the 

commenter stated that this would 

violate the provisions of the Anti-Car 

Theft Act that restrict the operator from 

taking a profit from its role as the 

NMVTIS operator. 

Response: The third-party providers 

are not given open access to NMVTIS 

data. Rather, they are only provided 

access to that data that the Anti-Car 

Theft Act requires to be available to 

prospective purchasers. Additionally, 

the operator will maintain much more 

than ‘‘little’’ oversight over these 

contractors. Last, while the Anti-Car 

Theft Act restricts the operator from 

making a profit, the Anti-Car Theft Act 

provides no restrictions on third-party 

contractors, including states that wish to 

be a portal provider. DOJ will move 

forward with a third-party provider 

approach to consumer access. 

Comment: The NADA commented on 

the importance of providing access to 

NMVTIS information for the wholesale 

vehicle market: ‘‘If wholesale auctions 

have access to NMVTIS data, 

fraudulently titled vehicles could be 

easily flagged and reported to law 

enforcement officials expeditiously and 

efficiently. * * * Transparency at the 

wholesale level will only help to deter 

motor vehicle title fraud and enhance 

the NMVTIS system.’’ 

Response: DOJ agrees and notes that 

enabling this type of access also will 

assist in generating revenues to sustain 

the system and possibly offset or 

eliminate state fees. So long as this 

access is on an inquiry basis, and 

NMVTIS data is not sold in bulk as 

previously described, DOJ will 

authorize and direct the operator to 

provide such access to dealers and other 

commercial consumers, consistent with 

the Anti-Car Theft Act. 

Comment: Several commenters 

expressed concern that the operator 

must provide robust security protections 

for the information to be included in 

NMVTIS. 

Response: DOJ will ensure that the 

operator relies on industry-standard 

security and related protections, 

including any relevant policy 

recommendations of the Global Justice 

Information Sharing Initiative that relate 

to security and privacy protections of 

information systems used in the 

criminal-justice environment. 

Comment: ISRI argued that DOJ’s 

authorization for the operator to identify 

third-party organizations to receive and 

provide data to NMVTIS in lieu of 

allowing all required entities to report 

directly to NMVTIS is problematic. ISRI 

believes that allowing third-party 

organizations to handle the information 

creates a security risk, provides an 

opportunity for market participants to 

access confidential business 

information, and could create a cost 

burden for reporting entities. ISRI 

recommended additional security 

protections and restrictions that would 

prevent these potential problems. 

Response: The current operator’s 

information architecture is not designed 

to allow hundreds, and possibly 

thousands, of reporting entities to report 

directly to NMVTIS. In light of this, and 

because many of the covered reporting 

entities are already reporting to thirdparty entities, such as the Insurance 

Services Office (ISO), allowing a third 

party to receive and provide the 

required information is effective and 

reduces burden on reporting entities by 

allowing their current reporting to be 

used in NMVTIS compliance. DOJ will 

require the operator to designate at least 


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three third-party organizations for 

reporting purposes, so that covered 

entities can choose which third party 

they are most comfortable with. 

Additionally, any third-party 

organization that develops a reporting 

application at the operator’s request will 

agree to terms and conditions restricting 

the sale or use of the data, consistent 

with the Anti-Car Theft Act. 

Comment: Auto Data Direct, Inc. 

suggested creating a policy to prevent 

free dissemination of prospectivepurchaser-inquiry data by any entity 

and suggested charging all consumeraccess providers the same fees in order 

to maintain a level playing field. 

Response: DOJ agrees and will direct 

the operator to ensure that all consumeraccess portal providers are charged the 

same fees for NMVTIS information, 

notwithstanding volume discounts. 

Consumer-access providers, however, 

are currently not restricted in what they 

can charge the end user (prospective 

purchaser) for an inquiry, as DOJ has 

determined that the ‘‘market’’ can 

determine this better than any artificial 

caps or minimums. 

Comment: The Minnesota Department 

of Public Safety commented that section 

30504 of the Act requires DOJ to 

prescribe by regulation the procedures 

and practices to facilitate reporting to 

NMVTIS. The commenter suggests that 

DOJ is merely placing this burden on 

the operator to circumvent the DOJ’s 

own responsibilities. 

Response: DOJ strongly disagrees with 

this assessment. Requiring that these 

procedures, which are subject to change 

and modification as technology 

advances, be published in federal 

regulations is unwise and inefficient 

and would only serve to restrict the 

states and other covered participants 

from working with the operator to 

improve reporting practices. It is in 

everyone’s best interest that such 

detailed procedures are not codified in 

regulation beyond the procedures and 

practices that are described herein (i.e., 

third-party reporting, reporting via 

batch upload or realtime, etc.). 

Comment: AAMVA asserted that it 

cannot support the development and 

implementation of a third-party 

reporting mechanism to support 

insurance, junk, and salvage reporting. 

AAMVA reports that to establish this 

connection with the required two or 

three third-party organizations would 

require $1 million to $1.5 million in 

development costs and up to $400,000 

in annual operating costs from federal 

funds to implement this provision. 

Response: DOJ is under court order to 

establish this mechanism by March 31, 

2009. DOJ has recently provided 

AAMVA with federal funds of nearly 

$300,000, and AAMVA expects to 

receive approximately $1,500,000 in 

user fees by end of year 2008. Much of 

these funds are spent on other activities, 

including and especially support for 

currently participating states. DOJ 

expects to work with AAMVA on cost 

controls and to intervene to ensure that 

the basic connection is established as 

required by the court. The Anti-Car 

Theft Act specifies that NMVTIS will 

not depend on federal funds and is to 

be supported by user fees. 

Comment: The National Salvage 

Vehicle Reporting Program commented 

that commercial consumers such as auto 

dealers would desire the ability to 

inquire on multiple VINs at the same 

time in a ‘‘batch’’ format at an 

appropriate cost. Consumer-advocate 

attorney Bernard Brown commented 

that ‘‘such broad access to NMVTIS data 

should be provided for all of these 

businesses and entities to level the 

playing field’’ in the competitive market 

place. Other consumer-advocacy 

organizations commented that such 

commercial consumers should not be 

permitted to provide the NMVTIS 

vehicle history to other consumers 

without also notifying such consumers 

of the NMVTIS disclaimers and 

warnings. 

Response: Similar to the need for 

central-issue states to inquire against 

multiple VINs at the same time, 

commercial consumers should have the 

same service available at a cost 

commensurate with the service. Because 

DOJ is directing the operator to make 

such a batch-inquiry process available 

for central-issue states, this same service 

should be available to dealers and other 

commercial consumers. DOJ points out, 

however, that these searches will 

require a VIN for each vehicle to be 

searched. That is, no bulk data will be 

made available to any consumers. DOJ 

will require the operator to require all 

third-party portal providers to make a 

NMVTIS Notice and Disclaimer 

available to all consumers accessing the 

system. Additionally, DOJ has 

collaborated with the Federal Trade 

Commission on its Used Car Buyers 

Guide regulations to ensure that the FTC 

is aware of NMVTIS and the 

accompanying notice and disclaimer. 

Comment: Several commenters, 

including the National Salvage Vehicle 

Reporting Program, stated that the 

inclusion of specific disclaimers for 

limitations to the data reported by the 

system is essential for consumer 

protection purposes. 

Response: DOJ agrees and will work 

collaboratively with the operator and 

others to ensure that appropriate notices 

and disclaimers are in place. 

Comment: One commenter noted the 

need for proactive efforts by DOJ and 

the operator in the areas of public 

awareness and education on NMVTIS 

and the issues it addresses. 

Response: DOJ will work with the 

operator and the various stakeholder 

communities to develop and distribute 

information through www.NMVTIS.gov 

and other means. 

Comment: Several consumeradvocacy organizations argued that 

consumers should be provided access 

either at no cost or nominal cost without 

onerous access requirements and 

allowed to make multiple inquiries for 

a fixed price. Similarly, these 

organizations contended that consumers 

who have completed vehicle purchases 

should be able to verify their vehicles’ 

history, and that the Department should 

take into account consumers’ lack of 

access to credit and the ‘‘digital divide.’’ 

Response: DOJ agrees that consumers 

should be able to access NMVTIS at 

nominal cost, that there should be no 

onerous access requirements, and that 

any consumer—including those who 

recently purchased a vehicle and those 

who may be considering purchasing a 

vehicle in the future—should be 

permitted access. DOJ will take into 

account the comments on pricing 

structures and the issues of credit access 

and ‘‘digital divide’’ while working with 

the operator to establish the consumeraccess provisions. 

25. Operator Accountability 

Comment: Several state departments 

of Motor Vehicle Administration argued 

that the operator must provide a 

reasonable and timely process for 

correction and amendment of records 

that contain errors, and that the operator 

must take responsibility for notifying 

users of the erroneous information. 

Another asked who would be 

responsible for working with insurance 

carriers and junk and salvage yards 

when their data is questionable or 

incorrect. The commenter also asked 

how the data would be corrected. 

Response: DOJ agrees that an errorverification and correction process is 

vital to the success of the program. 

However, in some circumstances, it may 

be impossible to fully verify the facts of 

some situations (e.g., vehicles disposed 

of). The operator will be required to 

work with data reporters to identify and 

resolve potential data errors, to note 

within the central file any discrepancies 

reported or the findings of any 

investigations of errors, and to notify 

those who accessed the information of 

any confirmed erroneous information. 


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No entity, including the operator, may 

remove any data reported by another 

organization, and only state motor 

vehicle-title administrations can 

unilaterally change their data, which 

will update in NMVTIS. Insurance 

carriers and junk- and salvage-yard 

operators do not have access to modify 

data in the system, but are required to 

notify the operator immediately of 

erroneous information that they 

previously reported and to immediately 

report corrected information, which will 

be flagged or noted in the system as an 

update. Although the erroneous 

information may be retained in the file, 

it will be noted as corrected via update, 

and the updated, correct information 

will be available. In releasing insurance, 

junk, or salvage information, the 

operator may include the name of the 

reporting organization and its contact 

information, so that anyone questioning 

the validity of the report can go directly 

to the source of the information. It is 

important to point out that while 

NMVTIS is authorized to serve as a data 

repository and data provider, NMVTIS 

was not expected to serve as an 

arbitrator of questionable or even 

conflicting information. It is the 

responsibility of the data reporters 

(including states and insurance, junk, 

and salvage organizations) to provide 

correct information, and to provide 

updates and corrections as soon as they 

are identified. Although the operator 

should not remove previously reported 

information, the operator can add a 

‘‘note’’ to the record regarding the 

corrected information, along with the 

corrected information. Additionally, 

DOJ added a section to the regulation 

(section 25.57) that provides for error 

correction in exceptional circumstances. 

Comment: One commenter stated that 

‘‘[t]he GAO report stated that there have 

been problems with funding NMVTIS 

through AAMVA, including: excessive 

consultant fees; lack of documentation 

for payments; failing to maintain 

records supporting financial reports; 

and failing to adequately administer 

contractual arrangements with the 

states. GAO report at 10. How has the 

track record for management of NMVTIS 

improved since then? What type of 

financial oversight is expected for the 

system? And what type of compensation 

structure does NMVTIS propose for its 

labor costs?’’ 

Response: Because the current 

operator (AAMVA) has received grant 

funding from DOJ, the operator is 

responsible for complying with all grant 

requirements, including financial and 

programmatic requirements relating to 

contracting, documentation, and 

performance. Also, DOJ will play an 

active role in overseeing the 

administration of the system. DOJ also 

has added requirements for the operator 

to publish an annual report to include 

revenues and expenses by category. DOJ 

leaves operator labor cost structures up 

to the operator to determine what is 

most advantageous and cost-effective 

while complying with DOJ financial 

requirements. DOJ also has added a 

requirement (should DOJ not be the 

operator) for an annual independent 

audit of NMVTIS revenues and 

expenses, the results of which will be 

publicly available. DOJ also may 

terminate the operator status of any 

organization (if not the Department of 

Justice) for cause, should that be 

necessary. DOJ also has coordinated 

with another federal agency, the Office 

of the Inspector General (OIG), which 

recently completed audits of the 

operator’s financial recordkeeping and 

practices and will continue to monitor 

these issues. DOJ also notes that the 

GAO study was completed many years 

ago, and that AAMVA has undergone 

many changes since that time. 

Comment: One commenter asked ‘‘to 

what extent is the potential for 

corruption of those who manage the 

system a concern? What internal 

controls will be implemented? Is this 

why access provided by the operator to 

users of NMVTIS must be approved by 

the Department of Justice? § 25.53(d).’’ 

Response: DOJ has no basis for any 

concerns of corruption. The internal 

controls in place to protect the integrity 

of the system are many and varied, 

including technological controls, 

transparency, and oversight from a 

variety of stakeholders. 

Comment: One commenter noted that 

‘‘[t]he estimates in the regulations give 

the impression that the operator doesn’t 

know exactly how much the system 

costs to operate[.] The estimates 

provided all seem pretty high. Why does 

it cost so much to operate the system? 

Is DOJ sure that the operator has the 

experience and ability to run the system 

well?’’ 

Response: DOJ is very concerned 

about current system costs. DOJ will 

continue to monitor and encourage costsaving options and will look to the 

annual independent audits to inform the 

operator and DOJ of additional costsaving strategies. DOJ notes that the 

current operator, AAMVA, already 

administers other federal-state systems 

successfully. DOJ will continue to 

encourage AAMVA to seek cost savings 

by outsourcing technological solutions 

as appropriate and by adopting current 

and less-costly technological solutions. 

Comment: One commenter asked 

‘‘[h]ow will DOJ oversee the program 

and the operator? Because these 

questions are obvious and because 

others have already asked questions 

about the same issues, I recommend that 

DOJ create some kind of governance 

model to oversee the project. The 

current operator has close ties to the 

states, but other groups required to 

participate don’t have a seat at the table. 

A board of governors that has people 

from the groups that use the system or 

need the system is definitely needed.’’ 

Similarly, one state motor vehicle 

administration noted that ‘‘the proposed 

rules and the options AAMVA is willing 

to provide do not match. The lack of 

flexibility on the part of AAMVA results 

in many options set forth in the 

proposed rule not actually being 

available to the states.’’ The California 

motor vehicle administration 

commented that a board or commission 

made up of state representatives, DOJ, 

and the operator should be engaged to 

discuss and agree upon the 

requirements relating to consumer 

access. Other commenters also 

recommended the establishment of a 

steering committee to govern operation 

of NMVTIS outside of the rules. 

Response: It is DOJ’s responsibility to 

oversee the program and make or 

approve all policy decisions regarding 

the implementation of NMVTIS. To 

ensure input from all stakeholders, the 

Department may establish a NMVTIS 

Advisory Board to make 

recommendations to DOJ regarding the 

system and its operation. 

Comment: Several commenters 

recommended that DOJ publish the 

NMVTIS system budget on an annual 

basis for review as a part of an annual 

report, and another commented that the 

operator should be required to provide 

quarterly reports on the number of 

vehicles reported on during each 

quarter, along with dispositional 

information, in order to give better 

insight into the effectiveness and 

compliance rates within the system. 

Another state motor vehicle-title 

administration recommended that the 

operator be required to have procured 

an independent audit of the fees 

generated and expenses incurred on an 

annual basis. 

Response: DOJ will require the 

operator (if not the Department of 

Justice) to prepare and publish 

electronically a detailed annual report 

that includes many of these items, and 

DOJ also will require an annual 

independent audit of NMVTIS revenues, 

costs, expenditures, and financial 

controls and practices, which shall also 

be available. 

Comment: The California motor 

vehicle administration suggested that 


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DOJ should identify its responsibility 

for oversight of the system and operator 

performance, and that specific 

performance measures should be 

established along with a minimumperformance period such as a year. The 

commenter further suggested that the 

review of operator performance should 

include solicited comments from the 

various system stakeholders. 

Response: As previously stated in 

these comments, the Anti-Car Theft Act 

provides that NMVTIS is a DOJ system 

over which DOJ has sole responsibility 

and control. As necessary, DOJ will 

enter into an Memorandum of 

Understanding (MOU) with the operator 

that addresses these issues in greater 

detail. 

Comment: Several commenters noted 

the need to require the operator to 

provide information to reporters and 

others on its compliance and the 

compliance of others in the program. 

Response: DOJ will work with the 

operator to establish the specific 

compliance monitoring, managementcontrol functions, and administrativedashboard features that will be required. 

In its annual report, the operator will 

provide compliance data and 

information on which states, insurance 

carriers, and junk- and salvage-yard 

entities are reporting to the system and 

participating, if available. 

User Fees 

26. Per Transaction 

Comment: Several commenters noted 

that the user fees should be based on a 

‘‘per transaction’’ basis: ‘‘The fee 

structure based on a pro-rata share to 

states based on the number of registered 

vehicles is not an equitable structure. 

States put information into the system 

and all the states involved in the system 

benefit from this. Under a pro-rata 

system, states that have a low number 

of title transfers but a high number of 

vehicles ha[ve] to pay in more for the 

system for marginal benefit. Other 

states, for example states that act as 

dealer hubs and have a large number of 

title transfers but a small number of 

registered vehicles[,] would be 

benefitting disproportionately. For those 

reasons, the fees should be applied on 

a per transaction basis.’’ 

Response: Several commenters, 

including state motor vehicle-title 

administrations, noted that fees based 

on a ‘‘transaction’’ basis could serve as 

a disincentive for states to participate 

and to make NMVTIS inquiries, which 

would leave consumers and others 

vulnerable. Additionally, several 

commenters noted that fees based on a 

pro rata basis provided the ability to 

know fees in advance, which would 

assist in budget planning and requests. 

Finally, a transaction-based fee structure 

would require the operator of NMVTIS 

to revise its billing process and would 

likely be more costly to implement. For 

these reasons primarily, DOJ has 

determined that state user fees will be 

based on the number of motor vehicles 

titled or registered as reported by the 

U.S. Department of Transportation’s 

Federal Highway Administration 

through its Highway Statistics Program 

and reports. With full state participation 

mandated beginning January 1, 2010, 

the operator will invoice all states 

regardless of their level of participation. 

State fees shall be reviewed biennially 

and announced to the states as soon as 

possible, preferably more than one year 

in advance of becoming effective. 

Comment: Experian Automotive 

commented that some aspects of the 

proposed rule could be read to allow the 

establishment of a fee beyond what 

would be reasonable for the records, 

which would be essentially the same as 

prohibiting the disclosure of 

information outright. 

Response: The current inquiry fee 

used in consumer-access pricing is 

based on market assessments, and with 

volume discounts included, has been 

effective in securing consumer-access 

provider-organization agreements. 

However, DOJ will carefully monitor 

consumer access pricing to ensure that 

the average consumer is not ‘‘priced 

out.’’ 

Comment: AAMVA and the States of 

California, New York, and Alaska 

commented that user fees based on the 

number of vehicles registered in the 

state are the preferred basis, as this will 

enable states to determine the fees in 

advance, which will support budget 

planning. At the same time, states such 

as Texas, Oregon, South Carolina, and 

Hawaii have recommended a fee 

structure other than the number of 

registered vehicles because of the high 

number of registered vehicles in some 

states. The State of California 

recommended that the fees be the 

subject of a separate, future rulemaking, 

that the operator be required to make its 

expenses publicly available, and that a 

stakeholder group comprising the 

operator, DOJ, and states provide input 

into the fees. 

Response: DOJ agrees with AAMVA 

and several states in making the basis 

for state fees the number of vehicles 

registered or titled. DOJ cannot defer 

rulemaking on fees because the operator 

has indicated extensively that funding 

for NMVTIS is critical. In fact, in the 

operator’s public comments on this rule, 

it acknowledges that it cannot 

implement key aspects of NMVTIS in 

accordance with a federal court’s order 

without critical funding. For these 

reasons, DOJ must resolve this issue 

now. DOJ agrees that all expenses and 

revenues for NMVTIS be made publicly 

available annually. 

Comment: More than one commenter 

argued that ‘‘[c]harging a ‘user fee’ to a 

state for the information they are 

required to upload to the system is 

simply unfair. If anything, the states are 

providing this information as a courtesy 

to enable the NMVTIS process to 

function. As such, a state should not be 

charged a fee for providing data. Rather, 

anyone, including a state, which uses 

the system to process requests, should 

pay fees for system use.’’ 

Response: The user fee is not charged 

to a state solely for sharing its data with 

the system and other states. The user 

fees are assessed in light of the states’ 

use of the system overall as is required 

by law, including making inquiries into 

the system, relying on the system to 

maintain a national brand history, and 

facilitating the secure exchange of title 

information and updates between states 

to protect the states’ consumers. 

Additionally, all states receive a level of 

added protection from fraud via 

participation by other states. 

Comment: The State of South Carolina 

Department of Motor Vehicles suggested 

that ‘‘states could be charged for 

inquiries prior to the issuance of a new 

jurisdictional title based on an out-ofstate title; however, states should be 

reimbursed for these charges based on 

the number of third-party inquiries that 

the system receives. If such a model is 

not developed, then states will take a 

double hit: the cost of full participation 

in the program, as well as the loss of 

revenue resulting from third parties 

being able to obtain current 

jurisdictional data through alternative 

means.’’ 

Response: Regardless of the fee 

model, DOJ has taken steps with the 

operator of the system to ensure that 

impact on states is minimized. In fact, 

the model that South Carolina proposes 

is very similar to the model being 

considered by DOJ and the operator. 

The model DOJ is proposing for 

generating revenue includes a 

component designed to ‘‘point’’ 

consumers to the full title history in the 

state of record, thereby potentially 

generating additional revenues for the 

state, and the model includes a strategy 

of using revenue to cover system 

operational costs as well as offsetting 

state user fees. Once system operational 

costs are covered, DOJ anticipates 

offsetting or eliminating state fees 

entirely with revenues generated by the 


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system. Should NMVTIS ever reach the 

point where an unexpected surplus of 

user fee revenue exists, DOJ could direct 

the operator to reduce user fees the 

following year or could use the funds to 

support state upgrades to motor vehicle 

title information systems. This latter use 

of funds would be directed by DOJ 

exclusively. 

Comment: The State of Illinois motor 

vehicle administration commented that 

in order for NMVTIS to be effective, 

NMVTIS should purchase vehiclehistory data from the state, ‘‘mark up’’ 

the price of the data, and sell the data 

to third parties. Illinois suggested that 

‘‘with this model, everyone wins,’’ and 

that ‘‘consumers win because they can 

rely on the complete, consistent, and 

efficient flow of information about 

motor vehicles.’’ 

Response: While this concept may be 

appealing to some, the concept has 

several major flaws. First, the Anti-Car 

Theft Act does not authorize or even 

suggest that DOJ should purchase state 

data. Had this been contemplated by 

Congress, funds would have to have 

been appropriated or at least authorized 

to make the purchases. Additionally, 

government agencies are not in a 

position to engage in speculative 

purchases. Consumers would not win 

under this scenario because they would 

be left to pay high prices for vehiclehistory information, which many cannot 

afford and should not have to do to be 

protected. Last, this is not what is 

required under the Anti-Car Theft Act. 

Comment: The State of California 

recommended that the states be charged 

a flat fee for participation that would 

cover NMVTIS operating expenses, and 

that all revenues generated from 

consumer access be returned to the 

states. 

Response: DOJ believes that, based on 

the arguments presented by the states in 

response to the proposed rule, there is 

no equitable way to charge a flat fee due 

to variances in the number of vehicles 

in the states, number of title 

transactions, number of out-of-state 

transfers into the states, etc. DOJ 

believes that the fees must be based on 

a factor that is correlated to a state’s 

required use of the system. In terms of 

returning revenues generated from 

consumer access to the states, this is not 

too dissimilar to what DOJ has 

proposed—offsetting state fees 

(potentially entirely) with revenues 

from consumer access once system 

operating costs are covered. 

Comment: One commenter stated that 

‘‘states should not be charged simply for 

submitting their title data to NMVTIS. 

States that choose to use NMVTIS 

should not be charged for assisting the 

DOJ.’’ 

Response: States are not charged for 

simply submitting data to NMVTIS. 

States are required to use NMVTIS for 

inquiries prior to issuing new titles for 

out-of-state vehicles, and NMVTIS can 

provide real-time updates and 

corrections as well as a secure method 

of sharing title information between 

states. In fact, for the 13 states currently 

online, 45 million messages or 

exchanges have been processed by 

NMVTIS, and the State of California has 

commented that NMVTIS is an ‘‘integral 

part of state operational activities,’’ 

demonstrating that NMVTIS does 

provide services to the states. The 

purpose of NMVTIS is not to assist DOJ, 

and DOJ has limited use for the data in 

NMVTIS. NMVTIS is a service to states 

that provides greater consumer 

protection, reduces crime, and can 

improve titling process efficiencies, all 

three of which ultimately reduce costs 

to the states overall as well as to 

consumers. 

Comment: One commenter noted that 

‘‘the Department of Justice does possess 

a legitimate interest in incentivizing full 

state participation in NMVTIS.’’ All 

states receive a benefit from NMVTIS. 

‘‘Title washing and rebranding of 

vehicles remain a national problem, not 

somehow confined merely within state 

borders. Providing information to 

NMVTIS allows law enforcement 

agencies to confront crimes that may 

have originated or affected states 

outside of their jurisdiction.’’ 

Response: DOJ agrees with this 

comment. 

Commenter: One commenter 

expressed disappointment regarding 

state concerns over user fees and system 

costs and recommended that DOJ 

pursue enforcement against nonparticipating states. 

Response: DOJ appreciates the 

concern and will monitor state 

compliance with the Anti-Car Theft Act 

and the NMVTIS rules. 

Comment: One commenter noted that 

the fee structure should be based on the 

activities generating the most costs, 

such as storing vehicle data, performing 

verifications, etc. 

Response: DOJ agrees that the fees 

should match the costs of the system. In 

asking for comments on the fee 

structure, however, DOJ was attempting 

to solicit input from the field regarding 

the most equitable manner of 

developing the fees and applying them 

to all states. As for costs, the majority of 

current expenses are for supporting 

online states and states in the process of 

implementation and data storage. 

Comment: The State of New York 

Department of Motor Vehicles 

commented that a transaction-based fee 

could serve as a disincentive to states to 

query the system often. The state further 

commented that a flat fee may be more 

effective. 

Response: DOJ appreciates this input 

and assumes that the commenters’ 

reference to a ‘‘flat fee’’ could include a 

tiered fee structure, such as what is in 

place today, as this results in a flat fee 

for the states in each tier. 

Comment: One commenter noted that 

‘‘[w]e remain convinced that if this is a 

program that is as effective as it is 

pronounced to be, if it will truly 

accomplish all of the goals it is said to 

have, then it should be fully funded and 

supported by the Department of Justice. 

Otherwise, it should be funded by fees 

charged for those states, individuals and 

organizations who request data from the 

system, based on a transaction fee as 

determined by AAMVA to sustain the 

system. If that is not possible and the 

DOJ will not fund it, it should be 

cancelled.’’ 

Response: The Anti-Car Theft Act 

explicitly states that NMVTIS should 

not be dependent on federal funds for 

operation. DOJ has awarded over $15 

million to NMVTIS and participating 

states, in addition to the funds awarded 

by the Department of Transportation 

prior to 1996. Since 1992, no more than 

$2 million has been collected in user 

fees by the operator. DOJ will comply 

with the Anti-Car Theft Act in requiring 

a system of user fees to support system 

development, operation, and 

maintenance. Because the Anti-Car 

Theft Act requires that DOJ implement 

the system so that it is sustained by user 

fees, DOJ has no ability to ‘‘cancel’’ the 

program. 

27. Tier Structure 

Comment: Several commenters, 

including AAMVA, noted that a tiered 

structure is the most workable structure 

from a budgeting perspective, given that 

this type of basis or structure will lessen 

the need for annual changes to fees, 

which are unworkable for states with 

biennial budgets. However, some states, 

such as Oregon, Virginia, Alaska, 

Minnesota, and others, noted that a nontiered structure is preferred. 

Response: DOJ appreciates this input 

and has elected to keep the tier structure 

in place. While there is still disparity 

between small and large states, and 

between those states that have 

significant differences in the number of 

titled vehicles, the tiered structure does 

help in reducing disparities between 

states of similar size. Additionally, the 

tier structure allows the per-vehicle 


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basis fee structure to remain relatively 

stable, rather than fluctuating 

constantly, and because it acts as a 

stabilizer, it results in a stable fee that 

states can budget for appropriately. Last, 

the tier structure is the structure that the 

AAMVA Board has adopted as a 

workable method for establishing fees. 

Comment: AAMVA commented that 

in addition to retaining the tiered fee 

structure, DOJ should modify the final 

rule to allow changes to the fee structure 

to be determined through a mutual 

agreement between DOJ and the 

operator. 

Response: DOJ firmly believes that 

issues such as the structure of 

mandatory fee systems should be 

addressed in a public manner, as 

opposed to handled informally and 

without input from stakeholders. 

28. Per Vehicle 

Comment: More than one commenter 

noted that user fees should be based on 

the number of ‘‘automobiles’’ titled 

versus the number of ‘‘motor vehicles’’ 

titled in a particular state. 

Response: While DOJ understands the 

comment and agrees in principle, the 

‘‘basis’’ for calculating such fees has no 

impact when fees are adjusted to cover 

system costs. In other words, charging a 

user fee of $0.02 based on the number 

of ‘‘motor vehicles,’’ versus $0.04 based 

on number of ‘‘automobiles,’’ is 

academic. Because NMVTIS already 

includes and services titles on all motor 

vehicles that a state may provide data 

on, many stakeholders and DOJ 

encourage states to make verifications 

on all motor vehicle transactions. States 

have been paying fees based on number 

of motor vehicles, and because the 

number of motor vehicles (a more 

comprehensive figure) is easier to 

calculate for states and the operator, 

DOJ authorizes the operator to continue 

the practice of charging user fees based 

on the number of motor vehicles titled 

in the states. 

29. Charging Non-Participants 

Comment: Several commenters, 

including the current operator, 

expressed concern with charging fees to 

all states regardless of participation. The 

North Dakota Department of 

Transportation noted that the proposal 

to allow the operator to charge the user 

fee to all states, even if a state is not a 

current participant in NMVTIS, is 

‘‘unfair’’ and that there has been no 

evidence provided that demonstrates 

the enhanced effectiveness of NMVTIS 

when all states participate. That 

commenter also argued that there is no 

evidence that criminals have targeted 

non-participating states. The commenter 

noted that ‘‘paying for the privilege of 

participating * * * is patently unfair 

and simply ludicrous.’’ Another 

commenter stating the same conclusion 

described the system as ‘‘an unfunded 

mandate where the particular costs to 

states are vague, and the total costs illdefined.’’ The State of Texas 

commented that this would not 

represent a true ‘‘user fee,’’ and the State 

raised the possibility of ‘‘constitutional 

problems’’ in paying such a fee. 

Response: DOJ disagrees with each of 

these comments. Because all states are 

required to participate fully in NMVTIS 

and all states receive benefits from the 

system, all states must pay the user fees. 

There is no option for states to not 

participate in NMVTIS, which includes 

paying user fees to support the system 

as required by the Anti-Car Theft Act. 

Existing research demonstrates 

NMVTIS’s effectiveness. Moreover, state 

and local law enforcement 

organizations, as well as automotive 

insurance experts, agree that nonparticipating states are being targeted for 

exploitation. It is important to note that 

the operator of the system has no 

discretion with regard to charging user 

fees, as this is the economic model 

established by the Anti-Car Theft Act. 

The operator has been steadfast in 

ensuring that DOJ understands and 

appreciates the perspective of its 

members and has worked closely with 

DOJ to identify ways of lessening the 

burden of implementation on state 

agencies. Additionally, states have 

multiple options for implementation in 

order to best manage the costs of 

participation, and certain cost-saving 

and potential state-revenue-enhancing 

features have been established or 

planned. 

Comment: The State of California 

commented that ‘‘we agree with the 

recommendation to charge all states. If 

the fee is charged to all states regardless 

of participation, there will likely be 

greater participation by all states. This 

could increase the value of the database, 

generating additional consumer 

transactions, which can then be used to 

offset the user fees charged to states.’’ 

Response: DOJ agrees that by charging 

all states a user fee in light of the 

requirement for all states to participate 

and the benefits all receive, any 

disincentive to make title verifications 

or use the system in the manner 

required is eliminated. 

Comment: One commenter noted that 

his or her state ‘‘will not voluntarily pay 

user fees.’’ 

Response: User fees will not be 

voluntary. Because the Anti-Car Theft 

Act requires that NMVTIS be selfsustaining through user fees, the final 

rule requires the operator to issue 

invoices and charge users of the system 

a user fee based on system operating 

costs and other factors that affect the 

costs, such as necessary upgrades or 

enhancements. Payment of the user fee 

is required for compliance with Federal 

law. 

Comment: One commenter noted that 

all users of the system should be 

charged user fees, including entities 

reporting data. 

Response: At this time, DOJ is not in 

favor of this recommendation because of 

the increased financial burden it would 

place on junk and salvage yards and 

insurance carriers, and the disincentive 

it would impose on their reporting of 

data. 

30. Enforcement 

Comment: Several commenters from 

various stakeholder groups asked who 

would be responsible for enforcement of 

the provisions of the rule and how 

enforcement responsibilities will be 

conducted. 

Response: Responsibility for 

enforcement of this rule resides with the 

Department of Justice overall. Within 

DOJ, several component organizations 

(including the Bureau of Justice 

Assistance, the Federal Bureau of 

Investigation, and the Civil Division’s 

Federal Programs Branch) will 

collaborate with each other, with the 

operator, and with state and local law 

enforcement to ensure compliance and 

to respond to allegations of noncompliance. 

Comment: ARA commented that an 

‘‘amnesty period’’ should be provided 

because most automotive recyclers will 

depend on inventory-management 

vendors to provide a reporting 

mechanism. 

Response: While an ‘‘amnesty period’’ 

per se is not established, DOJ will work 

closely with the ARA and other 

organizations including the operator (if 

not the Department of Justice) to ensure 

that the commencement of reporting is 

not impeded. During the initial period 

of reporting, DOJ will be focused on 

implementation as opposed to purely 

enforcement. 

Comment: Several insurance carriers 

suggested language for clarifying the 

enforcement aspects of the rule, 

recommending that a ‘‘violation’’ be 

defined as ‘‘an act in flagrantly and in 

conscious disregard of this chapter’’ and 

that the rule include a statement 

limiting liability of insurance carriers 

for what is reported and not reported. 

Response: DOJ will not define 

‘‘violation’’ in this regulation because 

such a definition is unnecessary. The 

Anti-Car Theft Act provides DOJ with 


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sufficient discretion to seek and assess 

penalties, including a requirement that 

DOJ consider the size of the business of 

the person charged and the gravity of 

the violation. 

Comment: The National Salvage 

Vehicle Reporting Program commented 

that any penalties levied against a 

required reporter should be determined 

in a way that will result in a material 

fine that could force a modification in 

behavior. This comment was supported 

by comments from consumer-advocate 

attorneys who noted that ‘‘[t]he 

Department should construe the 

enforcement provisions of the statutes to 

make them as strong as possible with 

respect to any potential deliberate 

violations by insurance carriers or 

salvage yards.’’ 

Response: DOJ will carefully consider 

any penalties applied as required by the 

Anti-Car Theft Act. 

Comment: The National Salvage 

Vehicle Reporting Program commented 

that ‘‘the establishment of regular 

document procedures by an entity to 

provide compliance should be 

considered a mitigating factor to 

demonstrate good intent.’’ 

Response: The Department did not 

propose any regulations governing its 

enforcement efforts in the proposed 

rule. At this time, the Department 

believes that enforcement concerns are 

adequately addressed by the Anti-Car 

Theft Act and other applicable statutes 

and regulations. 

Comment: Several insurance-related 

organizations or associations 

commented that ‘‘49 U.S.C. 40505 sets 

forth a $1000 civil penalty for ‘each 

violation of the chapter.’ With millions 

of data points reported from and to 

many sources, there needs to be an 

interpretation of this provision that 

makes clear that good faith efforts to 

comply would be enough to avoid the 

penalty. For example, we request that 

the Department include language along 

these lines in the final regulation: ‘A 

violation for purposes of 49 U.S.C. 

30505 means an act that is committed 

flagrantly and in conscious disregard of 

this chapter.’ ’’ 

Opposing this view, several national 

consumer organizations commented that 

‘‘the Department should flatly reject the 

American Insurance Association’s 

proposal that its enforcement authority 

be limited by a ‘flagrant disregard’ 

standard. Nothing in the Anti-Car Theft 

Act authorizes or contemplates such a 

standard, and the AIA does not 

adequately explain why such a standard 

is necessary, or how it would be 

satisfied. Consistent with congressional 

intent, the Department should preserve 

its full enforcement authority with 

respect to the reporting requirements of 

the Anti-Car Theft Act and its 

implementing regulations.’’ 

Response: As a matter of policy, DOJ 

will preserve its full enforcement 

authority and discretion, including the 

ability to determine what constitutes a 

violation of the Act. As noted above, the 

Department believes that enforcement 

concerns are adequately addressed by 

the Anti-Car Theft Act and other 

applicable statutes and regulations. 

31. Liability 

Comment: Several commenters 

requested that DOJ clarify liability and 

immunity protections for all users of the 

system—those using the data to make 

decisions and those providing the data 

to the NMVTIS. At least one of these 

commenters indicated that without such 

clarification, some data reporters may be 

hesitant to comply. Some commenters 

requested that DOJ clarify protections 

from both criminal and civil liability. 

Response: DOJ does not believe that 

the applicable immunity provisions 

require clarification. Pursuant to 49 

U.S.C. 30502(f): ‘‘Any person 

performing any activity under this 

section or sections 30503 or 30504 in 

good faith and with the reasonable 

belief that such activity was in 

accordance with this section or section 

30503 or 30504, as the case may be, 

shall be immune from any civil action 

respecting such activity which is 

seeking money damages or equitable 

relief in any court of the United States 

or a State.’’ 

32. System Operating Costs 

Comment: One commenter noted that 

the operator should examine its 

financial records and projections more 

closely in order to narrow the estimated 

system operating cost projections of 

$3,000,000 to $5,000,000 annually. Such 

examination would create greater 

reliability and equity in determining 

user fees. The commenter further 

suggested that ‘‘an outside bidding 

process should be enacted to shift the 

entire program onto a contractor.’’ 

Response: Because the system has not 

yet been fully implemented, and 

because costs are driven in part by 

system usage, the annual operating costs 

vary annually and therefore are 

estimates at this time. DOJ agrees, 

however, that it is imperative that more 

robust and tighter financial procedures 

and controls be put in place, and that 

transparency be encouraged through an 

annual publication of an operator report 

of progress and costs, as well as budget 

projections for the coming years. DOJ 

will ensure that these goals are reflected 

in the requirements of the system 

operator. While the operator is free to 

consider outsourcing opportunities for 

operational components (e.g., 

technology, financial oversight, etc.), the 

Anti-Car Theft Act requires that the 

operator of the system, if it is not the 

DOJ, be an organization that represents 

the interests of the states. The Act also 

restricts the ability of the operator to 

make any profit from the operation of 

the system. Based on the current 

operator’s statements regarding 

continued participation as the operator, 

DOJ is currently exploring outside 

bidding processes that could result in 

moving the program to another operator 

or to DOJ. 

33. Concerns With Cost-Benefit Study 

Comment: Several commenters noted 

concerns with the cost-benefit study 

cited in the proposed rule and 

completed by Logistics Management 

Institute (LMI). Concerns include 

overstatement of the benefits of 

NMVTIS, lack of details regarding the 

study’s methodology, vague 

presentation of findings and issues, and 

a noted possibility that underreported 

costs were not well addressed. One 

commenter argued that ‘‘the LMI study 

is thoroughly unconvincing, and its 

methodology is not sufficiently revealed 

as to permit rebuttal.’’ 

Response: The LMI study was 

commissioned in 1999 by the National 

Institute of Justice (NIJ). The reports 

cited are the only reports available to 

DOJ at this time. Although more details 

may be desirable, the LMI study’s 

findings clearly indicate that NMVTIS’s 

benefits outweigh the costs. Comparing 

an individual state’s cost estimates for 

implementation with the financial 

benefits of eliminating even a modest 

number of thefts and brand washings 

demonstrates the same thing. Moreover, 

the LMI study likely overestimated the 

costs of participation because the only 

method of participation known at the 

time of the study was the fully 

integrated method, which required a 

state to reconfigure title information 

systems to integrate NMVTIS inquiries 

and updates into their automated title 

processes. With a new ‘‘stand alone’’ 

method of participation available, the 

most costly aspect of known 

participation at that time (i.e., major 

modifications to title information 

systems) has been eliminated as a 

requirement. 

Comment: One commenter noted that 

‘‘many improvements will remain 

theoretical without full participation. 

The expected benefits however are not 

illogical; states will only fully gain from 

NMVTIS once most states are full 

participants.’’ ‘‘The best interests of 


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states, through their consumers, lies 

with full participation in NMVTIS.’’ In 

agreement with this, the Virginia 

Department of Motor Vehicles 

commented that ‘‘the system provides a 

great value to participating states and 

that value will exponentially increase as 

each jurisdiction begins fully 

participating.’’ 

Response: NMVTIS will not achieve 

its full value until there is 100% state 

participation. However, some states, 

such as California, have commented 

very favorably on the benefits of the 

system, even though all states do not yet 

participate. 

34. Cost Calculations 

Comment: One commenter noted that 

‘‘[t]here are specific examples of laxity 

in the cost-accounting figures for this 

rule. For instance, although the 

proposed rule states that average fees 

charged to states by the operator should 

be less than 3 cents per vehicle, it goes 

on to say that ‘states that choose to 

integrate the NMVTIS processes of data 

provision and inquiry into their titling 

process generally incur one-time 

upgrade costs to establish these 

connections.’ It would seem that * * * 

a ballpark figure for this ‘onetime 

upgrade’ is needed. Further, the cost of 

this ‘one-time upgrade’ may not be 

insignificant, as suggested by the fact 

that ‘states can lower their upgrade costs 

by choosing to integrate the NMVTIS 

reporting and inquiry requirements into 

their business rules but not into their 

electronic titling processes.’ This would 

bring with it, however, a definite loss in 

efficiency.’’ 

Response: It is important to note that 

there is no requirement in this rule or 

otherwise that states integrate NMVTIS 

processes into their title-information 

systems. Because doing so would be 

strictly and totally voluntary on the part 

of the states, DOJ does not see the need 

to attempt to estimate the costs for this 

type of implementation. Requests from 

states for DOJ grant funds have ranged 

from $17,000 to nearly $500,000 to 

implement various aspects of NMVTIS, 

e.g., data provision only, full 

implementation, etc. While 

implementing NMVTIS through the 

stand-alone method eliminates the need 

for nearly all system modifications, DOJ 

agrees that this approach may still affect 

business processes and could therefore 

impact overall operating costs. 

However, given that NMVTIS inquiries 

are only required on out-of-state 

vehicles coming into the state, and 

given that system response time is less 

than three seconds on average, we can 

reasonably estimate that the cost is 

minimal for a title clerk to enter the 

VIN, wait approximately 3 seconds for 

the response, and review the response (a 

process estimated to take as little as 60 

seconds or as much as 3 minutes). DOJ 

has included this estimation in the costs 

described in the proposed rule. Clearly, 

if discrepancies are found, the time 

required to process the transaction 

could increase substantially. However, 

DOJ notes that this is not a new cost, but 

a cost that states already have today. 

Comment: One commenter asked ‘‘has 

the agency considered the day-to-day 

cost of requiring a title clerk to ‘switch 

to an internet enabled PC to perform a 

Web search of NMVTIS via a secure 

virtual private network’ for every single 

title check of every single day? (Section 

25.54(c) requires that each state shall 

perform an instant title verification 

check through NMVTIS before issuing a 

certificate of title.) Is this additional cost 

something an underfunded state is 

supposed to bear simply because it is 

underfunded? What is the actual cost of 

having a clerk provide such a search 

based on the total number of title checks 

that a state will do in a year?’’ A state 

motor vehicle administration 

commented on the need to provide a 

‘‘batch’’ verification method via standalone access, so that many title 

verifications can be conducted as part of 

a ‘‘back room’’ operation. 

Response: The estimated costs for this 

function have been included in the 

overall cost calculations for the system 

as described in the response above. It is 

important to point out, however, that a 

state is only required to check NMVTIS 

when an out-of-state title is presented. 

Although states are encouraged to make 

NMVTIS inquiries before all 

transactions, it is only required in these 

limited instances. Additionally, states 

that determine that this process is 

unworkable may make a one-time 

system modification to automate the 

NMVTIS inquiry function. While most 

states may opt to use the individual 

title-verification method for over-thecounter operations, DOJ will encourage 

the operator to make available a ‘‘batch’’ 

verification method as quickly as 

possible to make compliance more 

flexible for central-issue states. 

Comment: One commenter asked 

‘‘what are the anticipated costs of 

causing an insurance carrier to provide 

the requested information ‘in a format 

acceptable to the operator?’ § 25.55(a). 

Where is the study indicating this cost? 

How was this cost determined? And was 

this cost balanced against the benefit of 

consumer protection? This rule will 

increase insurance costs.’’ The 

commenter also asked why insurance 

carriers should have to provide the 

information at its own cost. If the 

information was being collected under 

the ‘‘guise’’ of consumer protection, 

when it will provide ‘‘any real benefit?’’ 

Response: DOJ estimated the costs to 

insurance companies and presented 

these costs and a description of how 

they were determined in the proposed 

rule. These costs were not balanced 

against the benefit of consumer 

protection. For insurance carriers 

already reporting to a third party that 

provides the required information to 

NMVTIS, no additional costs will be 

incurred. Amica Mutual Insurance and 

other insurance organizations that have 

begun reporting this information on 

their own have publicly stated the 

benefits of such reporting. The benefits 

of NMVTIS in terms of consumer 

protection are well founded and 

common sense. 

Comment: The State of Illinois motor 

vehicle administration commented that 

compliance in the first year of the 

program would cost the state an 

estimate $3,700,000, including start-up 

costs, user fees, and the loss of 

approximately $2,600,000 in annual 

sales of vehicle information. Illinois 

commented that these costs and the 

model being implemented by the 

operator is ‘‘nonsensical.’’ Other states 

estimated their costs at approximately 

$200,000. The NADA added that ‘‘[a]ny 

state claims of excessive reporting costs 

should be weighed against the huge 

costs associated with vehicles with 

hidden histories entering the stream of 

used vehicle commerce.’’ 

Response: DOJ disagrees with 

Illinois’s assessment of start-up costs. 

Because the proposed rule did not 

prescribe a specific user-fee model, 

Illinois’s estimate of $700,000 in user 

fees is not reliable. Additionally, 

organizations that typically purchase 

state motor vehicle records have 

signaled that they will continue to 

purchase state data, as they are unable 

to purchase the bulk state data from or 

through NMVTIS. For this reason, 

Illinois’s assertion that it will loose 

$2,600,000 in revenues likely is 

unfounded. The only place these 

organizations can purchase bulk vehicle 

data from Illinois is from Illinois— 

NMVTIS will not sell data in this 

manner. While DOJ is not in a position 

to address Illinois’s estimate of start-up 

costs, DOJ issued a solicitation in fiscal 

years 2007 and 2008 to provide funds to 

states to support NMVTIS start-up costs 

and encouraged states to apply under 

other unrestricted, eligible funding 

programs as well. For many years 

between FY 1997 and FY 2004, AAMVA 

also offered funding support to states 

based on DOJ grant awards to the 

operator. 


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Comment: AAMVA contended that 

although the Anti-Car Theft Act states 

that NMVTIS should be self sustaining, 

NMVTIS represents an unfunded 

mandate that has serious impact on 

states. AAMVA went on to assert that to 

achieve full implementation and longterm success, federal funding of the 

remaining development work and 

support for system operation is needed. 

Response: The Anti-Car Theft Act 

requires NMVTIS to be self-sustaining 

and ‘‘not dependent on federal funds’’ 

for its operation. To date, DOJ has 

invested more than $15 million in 

NMVTIS development, combined with 

investments from the U.S. Department 

of Transportation, as well as a reported 

$30 million investment from AAMVA. 

Since 1992, less than $2 million has 

been collected from user fees. DOJ is 

concerned that additional investments 

of federal funds will be used to support 

the required ‘‘services to states’’ and 

will not lead to additional development 

of the system. Additionally, DOJ notes 

that much of the federal funds provided 

to states through AAMVA remains 

unexpended even years after being 

provided to facilitate participation. 

From 2003 to date, AAMVA and the 

states have strongly encouraged DOJ to 

implement the rules for NMVTIS as a 

necessary step to system 

implementation. With rules now 

published, system operation and user 

fees established, and third-party 

providers generating additional user 

fees, it is DOJ’s hope that additional 

federal funding may not be needed, and 

that the system can begin to be self 

sustaining as originally envisioned. 

Comment: AAMVA commented that 

its Board of Directors recently 

concluded that AAMVA will not be able 

to continue as the system operator if it 

must subsidize the ongoing 

development and operation costs of 

NMVTIS. As a result, AAMVA expects 

a decision by August 2009 from its 

Board of Directors as to its continued 

participation as the operator of the 

system. 

Response: DOJ acknowledges 

AAMVA’s position and, in response, 

developed a Request for Information 

(RFI) that was published to identify 

prospective new operators and 

organizations that could support DOJ 

should DOJ become the operator. DOJ 

expects that any new operator, if not 

DOJ, will comply with the same 

provisions of this rule and will work 

with DOJ, AAMVA, and the NMVTIS 

stakeholders to perform a seamless 

transition. The results from the RFI are 

being used to identify new ideas and 

capabilities to accomplish the program 

objectives while minimizing the burden 

on states. 

Provisions of This Rule 

The continued implementation of 

NMVTIS and its effectiveness depend 

on the participation and cooperation of 

a number of parties. According to the 

cost-benefit study conducted by the 

Logistics Management Institute: ‘‘The 

way NMVTIS is implemented— 

piecemeal, regionally, or nationally— 

will affect how criminals respond. 

Criminals are highly mobile and may 

avoid NMVTIS states until most of the 

country is covered by the system. 

Criminals use technology to their 

advantage, both to identify potential 

theft targets and to camouflage stolen 

vehicles.’’ As a result, any states not 

fully participating in NMVTIS and their 

citizens may be disproportionately 

targeted by criminals committing 

vehicle crimes. This finding has been 

repeatedly confirmed by law 

enforcement at the local, state, and 

federal levels, and by national anti-theft 

organizations based on experience and 

active investigations. Even private 

vehicle-history providers have agreed 

that criminals exploit these and similar 

weaknesses in the vehicle-titling system 

in the U.S., particularly the lack of 

communication between state motor 

vehicle title and registration agencies. 

The Anti-Car Theft Act also referred to 

the ‘‘weakest link’’ in referring to this 

problem as it relates to brand washing. 

See Public Law No. 102–519, section 

140(a)(1). 

Participation in NMVTIS must be 

expanded to all states. In addition, 

insurance carriers, junk yards, and 

salvage yards also need to provide 

certain information relevant to the lifecycle of an automobile in order for 

NMVTIS to function properly and 

achieve the intended benefits. The AntiCar Theft Act requires junk yards, 

salvage yards, and insurance carriers to 

report at least monthly to NMVTIS on 

all junk and salvage automobiles they 

obtain. Pursuant to 49 U.S.C. 30504(c), 

the Attorney General is authorized to 

issue regulations establishing 

procedures and practices to facilitate 

reporting the required information in 

the least-burdensome and costly 

fashion. 

Accordingly, this rule implements the 

reporting requirements imposed on junk 

yards, salvage yards, and insurance 

carriers pursuant to 49 U.S.C. 30504(c). 

In addition, this rule clarifies, consistent 

with section 202(a)(1) of the Act, the 

title and related information to be 

included in the system to determine its 

adequacy, timeliness, reliability, and 

capability of aiding in efforts to prevent 

theft and fraud. The rule also clarifies 

the various responsibilities of the 

operator of NMVTIS, states, junk yards, 

salvage yards, and insurance carriers 

under the Anti-Car Theft Act to help 

ensure its effectiveness. Finally, this 

rule provides a means by which user 

fees will be imposed to fund NMVTIS, 

consistent with the requirements of the 

Anti-Car Theft Act and its requirement 

that NMVTIS be self sustaining and ‘‘not 

dependent on Federal funds.’’ 

1. State Responsibilities 

The effectiveness of NMVTIS 

increases as more states fully 

participate. NMVTIS will only be as 

good as the quality and quantity of 

information it contains. Consequently, 

all non-participating states are strongly 

urged to comply with their obligations 

under the Anti-Car Theft Act and to 

begin title verifications and reporting 

title information to NMVTIS as soon as 

possible. While the immediate 

requirement of this rule is to, at a 

minimum, have all states make 

verifications on incoming, out-of-state 

titles and provide regular (at least daily) 

data updates to NMVTIS, the ultimate 

goal is for all states to participate in the 

system via an integrated, online method 

that provides real-time data updates, 

making inquiries into NMVTIS prior to 

issuing new titles on vehicles coming 

from out-of-state, and sharing other 

information and data electronically, via 

NMVTIS. All states must be fully 

participating as required by the Act and 

this rule by January 1, 2010. However, 

for purposes of continuity and to ensure 

that there is no degradation of services 

currently provided by NMVTIS, the 

final rule requires all states to maintain 

at least the level of participation (data 

provision, title verifications, remitting 

fees) that they had established as of 

January 1, 2009 for the remainder of that 

year and until the full compliance date 

for all states arrives on January 1, 2010. 

In accordance with 49 U.S.C. 30502, 

NMVTIS must provide a means of 

determining whether a title is valid, 

where the automobile previously was 

titled, the automobile’s reported 

mileage, if the automobile is titled as a 

junk or salvage automobile in another 

state, and whether the automobile has 

been reported as a junk or salvage 

automobile under 49 U.S.C. 30504. Each 

state is required to make its titling 

information available to NMVTIS. 49 

U.S.C. 30503(a). Each state also is 

required ‘‘to establish a practice of 

performing an ‘instant’ title verification 

check before issuing a certificate of 

title.’’ 49 U.S.C. 30503(b). This rule 

clarifies the procedures for verifying 

title information and the information 


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3Pursuant to 49 U.S.C. 30102(a)(6), a ‘‘motor 

vehicle’’ means a vehicle driven or drawn by 

mechanical power and manufactured primarily for 

use on public streets, roads, and highways, but does 

not include a vehicle operated only on a rail line. 

states must report to NMVTIS pursuant 

to the Anti-Car Theft Act, and the 

procedures and practices that states 

must follow to provide this needed 

information. Pursuant to 49 U.S.C. 

30503(a), states are required to perform 

an ‘‘instant’’ title verification check 

before issuing a certificate of title to an 

individual or entity bringing a vehicle 

into the state. Because several states are 

‘‘central issue’’ states where titles are 

produced at a central location after an 

application for title has been made, 

‘‘instant’’ is considered to mean at any 

point before a permanent title is issued. 

The primary purpose of the verification 

is to determine the validity and status 

of a document purporting to be a 

certification of title, to determine 

whether the automobile has been a junk 

or salvage vehicle or has been reported 

as such, to compare and verify the 

odometer information presented with 

that reported in the system, and to 

determine the validity of other 

information presented (e.g., lien-holder 

status, etc.). While the laws and 

regulations of the receiving state will 

prevail in determining the status of the 

vehicle (e.g., branding, title type, or 

status), the information in NMVTIS 

should be used by the state to identify 

inconsistencies, errors, or other issues, 

and to follow state procedures and 

policies for their resolution. Because 

NMVTIS can prevent many types of 

fraud in addition to simple brand 

washing, states are encouraged to use 

NMVTIS for verifications on all 

transactions whenever possible. This 

verification includes in-state title 

transactions, dealer reassignments, 

lender and dealer verifications, updates, 

corrections, and other types of title 

transactions. This business process is 

made possible through the integrated, 

online method of state participation and 

is strongly encouraged by law 

enforcement, consumer protection 

groups, and private sector entities. 

States are also required under 49 

U.S.C. 30503(a) to make selected titling 

information they maintain available for 

use in NMVTIS. Specifically, states are 

required to report: (1) An automobile’s 

VIN; (2) any description of the 

automobile included on the certificate 

of title, including all brand information; 

(3) the name of the individual or entity 

to whom the title certificate was issued; 

and (4) information from junk or salvage 

yard operators or insurance carriers 

regarding their acquisition of junk 

automobiles or salvage automobiles, if 

this information is being collected by 

the state. The Anti-Car Theft Act also 

requires that the operator of NMVTIS 

make available the odometer mileage 

that is disclosed pursuant to 49 U.S.C. 

32705 on the date the certificate of title 

was issued and any later mileage 

information, if in the state’s title record 

for that vehicle. Accordingly, the rule 

requires states to provide such mileage 

information to NMVTIS. States shall 

provide new title information and any 

updated title information to NMVTIS at 

least once every 24 hours. 

In addition, with the approval of DOJ, 

the operator, and the state, the rule will 

allow the state to provide any other 

information that is included on a 

certificate of title or that is maintained 

by the state in relation to the certificate 

of title. 

The Anti-Car Theft Act specifically 

covers ‘‘automobiles’’ as defined in 49 

U.S.C. 32901(a). That definition, which 

is part of the fuel economy laws, was 

most recently amended by the Energy 

Independence and Security Act of 2007, 

Public Law No. 110–140, and generally 

covers four-wheel vehicles that are rated 

at less than 10,000 pounds gross vehicle 

weight, but excludes vehicles that 

operate on rails, certain vehicles 

manufactured in different stages by two 

or more manufacturers, and certain 

work trucks. Participating states, 

however, have been providing 

information to NMVTIS on other types 

of motor vehicles 3 possessing VINs, 

such as motorcycles and various work 

trucks. Information on these other types 

of motor vehicles is very useful to the 

users of NMVTIS, and law enforcement 

organizations including DOJ have 

strongly encouraged states to continue 

to provide information on such vehicles 

in order to reduce the theft of such 

vehicles. Therefore, while states only 

are required to report on automobiles, 

they are strongly encouraged to 

continue reporting to NMVTIS 

information on all motor vehicles 

possessing VINs in their state titling 

systems. 

2. Insurance Carriers 

The Anti-Car Theft Act authorized the 

Attorney General to issue regulations 

establishing procedures by which 

insurance companies must report 

monthly to NMVTIS on the junk and 

salvage automobiles they obtain. 49 

U.S.C. 30504(c). Accordingly, this rule 

clarifies the reporting requirements 

imposed on insurance carriers regarding 

junk and salvage automobiles. The AntiCar Theft Act defines a salvage 

automobile to mean ‘‘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.’’ 49 U.S.C. 30501(7). 

For purposes of clarification, the 

Department of Justice has determined 

that this definition includes all 

automobiles found to be a total loss 

under the laws of the applicable state, 

or designated as a total loss by the 

insurance carrier under the terms of its 

policies, regardless of whether an 

insurance carrier retitles the vehicle into 

its name or allows the owner to retain 

the vehicle. 

As a practical matter, the 

determination that an automobile is a 

total loss (i.e., that the automobile has 

been ‘‘totaled’’) is the logical event that 

shall trigger reporting to NMVTIS by an 

insurance carrier. Insurance carriers are 

required under this rule to provide 

NMVTIS with: (1) The VIN of such 

automobiles; (2) the date on which the 

automobile was obtained or designated 

as a junk or salvage automobile; (3) the 

name of the individual or entity from 

whom the automobile was obtained 

(owner name or lien-holder name) and 

who possessed the automobile when it 

was designated a junk or salvage 

automobile; and (4) the name of the 

owner of the automobile at the time of 

the filing of the report with NMVTIS 

(either the insurance company or the 

owner, if owner-retained). DOJ strongly 

encourages insurers to include the 

primary reason for the insurance 

carrier’s designation of salvage or total 

loss in this reporting as well. In 

accordance with 49 U.S.C. 30504(b), the 

report must provide such information 

on ‘‘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.’’ 

In addition, although not specifically 

required by the Anti-Car Theft Act or 

this rule, this rule will permit insurance 

carriers to provide the NMVTIS operator 

with information on other motor 

vehicles, including older model 

automobiles, and other information 

relevant to a motor vehicle’s title, 

including the disposition of such 

automobiles, and the name of the 

individual or entity that takes 

possession of the vehicle. The reporting 

of this information by insurance carriers 

will help reduce instances in which 

thieves use the VINs of junk or salvage 

motor vehicles on stolen motor vehicles 

and will assist in preventing and 


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eliminating fraud. Accordingly, the 

Department of Justice strongly 

encourages insurance carriers to report 

such additional information to the 

operator. 

3. Junk and Salvage Yards and Auto 

Recyclers 

Under this rule, junk yards and 

salvage yards are required to provide 

NMVTIS with the VIN, the date the 

automobile was obtained, the name of 

the individual or entity from whom the 

automobile was obtained, and a 

statement of whether the automobile 

was crushed or disposed of, for sale or 

other purposes. Such entities must also 

report whether the vehicle is intended 

for export out of the United States, 

which will assist law enforcement in 

investigations related to the export and 

cloning of exported vehicles. The 

reporting of this information will be 

limited to junk yards and salvage yards 

located within the United States. 

Pursuant to the Anti-Car Theft Act, junk 

and salvage yards are defined as 

individuals or entities engaged in the 

business of acquiring or owning junk or 

salvage automobiles for resale in their 

entirety or as spare parts or for 

rebuilding, restoration, or crushing. See 

49 U.S.C. 30501(5), (8). ‘‘Rebuilding, 

restoration, and crushing’’ is reflective 

of the varied nature of entities that meet 

this definition. Included in this 

definition are scrap-vehicle shredders 

and scrap-metal processors, as well as 

‘‘pull- or pick-apart yards,’’ salvage 

pools, salvage auctions, and other types 

of auctions, businesses, and individuals 

that handle salvage vehicles (including 

vehicles declared a ‘‘total loss’’). A 

salvage pool is an entity that acquires 

junk and salvage automobiles from a 

variety of parties and consolidates them 

for resale at a common point of sale. The 

pooling of junk and salvage automobiles 

attracts a large number of buyers. It is 

the belief of the Department of Justice 

and the state and local law enforcement 

community that a significant number of 

these buyers purchase junk and salvage 

automobiles at salvage pools in order to 

acquire VINs or titles that can be used 

on stolen motor vehicles or to create 

cloned motor vehicles for other illicit 

purposes. 

Such entities must report all salvage 

or junk vehicles they obtain, including 

vehicles from or on behalf of insurance 

carriers, that can reasonably be assumed 

to be total-loss vehicles. Such entities 

are not required to report any vehicle 

that is determined not to meet the 

definition of salvage or junk after a 

good-faith physical and value appraisal 

conducted by qualified appraisal 

personnel entirely independent of any 

other persons or entities. Second, DOJ 

has added a clarification that 

individuals and entities of this type that 

handle fewer than five vehicles per year 

that are determined to be salvage or total 

loss are not required to report under the 

salvage yard requirements, consistent 

with requirements for automobile 

dealers, see 49 U.S.C. 32702(2). 

Pursuant to 49 U.S.C. 30504(a)(2), 

junk yards and salvage yards will not be 

required to submit reports to NMVTIS if 

they already report the required 

information to the state in which they 

are located and that state makes 

available to the operator the information 

required by this rule of junk and salvage 

entities. Because some junk or salvage 

yards may hold vehicles for several 

months or years before a final 

disposition (e.g., crushed, sold, rebuilt, 

etc.) is known, some junk and salvage 

yards may need to provide a 

supplemental or additional report at the 

time of disposition or within 30 days of 

the date of disposition. Nothing in this 

rule shall preclude a junk or salvage 

yard from reporting the disposition of a 

vehicle at the time of first reporting, if 

such a disposition is known with 

certainty. Junk and salvage yards are 

responsible for ensuring the accuracy 

and completeness of their reporting and 

for providing corrected information to 

the system should the disposition be 

changed from what was initially 

reported. 

4. Lenders and Automobile Dealers 

The Anti-Car Theft Act requires that 

the operator make NMVTIS information 

available to prospective purchasers, 

including auction companies and 

entities engaged in the business of 

purchasing new or used automobiles. 

The Department believes that the scope 

of prospective purchasers also includes 

lenders who are financing the purchase 

of automobiles and automobile dealers. 

Lenders and dealers are integral 

components of the automobile 

purchasing and titling process who also 

can be the victims of fraud. This rule 

allows the operator to permit public and 

private entities involved in the 

purchasing and titling of automobiles to 

access NMVTIS if such access will assist 

in efforts to prevent the introduction or 

reintroduction of stolen motor vehicles 

and parts into interstate commerce and 

to prevent fraud. For purposes of 

clarification, this rule permits 

commercial consumers to access and 

verify NMVTIS information at the time 

of purchases, as well as at any time 

during the ownership of or involvement 

with such vehicles (i.e., lender 

verifications). States are strongly 

encouraged to work with lenders and 

others in using NMVTIS as an electronic 

means of performing title transactions 

and verifications. Conducting such 

efforts in an electronic fashion will 

eliminate a major source of fraud— 

paper-based title exchanges, updates, 

lien releases, etc. 

5. Responsibilities of the Operator of 

NMVTIS 

In accordance with 49 U.S.C. 30502, 

NMVTIS must provide a means of 

determining whether a title is valid, 

where the automobile is currently titled, 

the automobile’s reported mileage, if the 

automobile is titled as a junk or salvage 

automobile in another state, and 

whether the automobile has been 

reported as a junk or salvage automobile 

under 49 U.S.C. 30504. Further, the 

operator of NMVTIS must make relevant 

information available to states, law 

enforcement officials, prospective and 

current purchasers (individual and 

commercial), and prospective and 

current insurers. This rule clarifies that 

the operator of NMVTIS will be 

responsible for collecting the required 

information and providing the necessary 

access to all permitted users. 

The Department will instruct the 

operator that if it is not receiving 

reporting entity data directly, then it 

must identify at least three third-party 

organizations willing to receive reports 

from reporting entities (junk, salvage, 

insurance) and to share such data with 

NMVTIS. The operator also will take 

steps to ensure data quality to the extent 

possible and take steps as described in 

this rule to correct reported data, if not 

reported by a state, which has the 

authority to make changes via updates. 

The operator will be using the 

National Information Exchange Model 

or any successor information-sharing 

model for all new information 

exchanges established, and DOJ may 

require the operator to use Web services 

for all new connections to NMVTIS. 

Services to State Motor Vehicle Title 

Administrations 

The operator will: 

• Make available to state motor 

vehicle title administrations at least two 

methods of interacting with NMVTIS. 

States will have the option of 

participating via ‘‘stand alone’’ access, 

which is a basic Internet site that allows 

a state to enter a VIN and receive the 

results of the search. States currently 

have the option of fully integrating the 

NMVTIS search function into their titleinformation systems. This method of 

access allows state systems to perform 

the search seamlessly and without 

specific effort of the titling staff. This 

method allows updates made after the 


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title transaction to be shared with the 

prior state of title and allows real-time 

updates to NMVTIS as well. The 

operator also will make available a 

modified stand-alone access process 

(that allows for batch inquiries) to 

central-issue states to support their 

efficient title administration needs. 

• Share with states any and all 

information in NMVTIS, including any 

intended export criteria, junk and 

salvage history, and any other 

information obtained by the operator 

(e.g., title history information from other 

North American title administrations, 

etc.). 

• Provide the states with the greatest 

amount of flexibility in such things as 

data standards, mapping, and 

connection methodology. 

Services to Law Enforcement 

In particular, the operator of NMVTIS 

will be responsible for ensuring that 

state and local law enforcement 

agencies have access to all title 

information in or available through 

NMVTIS, including personal 

information collected by NMVTIS for 

law enforcement purposes. A thief can 

take a stolen, cloned vehicle to a nonparticipating state and get a valid title 

by presenting the clone and matching 

fraudulent ownership documentation to 

the new state. Thieves often switch the 

VIN plate (and sometime other VIN 

stickers) of a stolen motor vehicle with 

one from a junked car in order to get a 

valid title for the stolen car. These 

activities were possible because the 

states had no instantly updated, reliable 

way of validating the information on the 

ownership documentation prior to 

issuing the new title. Investigations 

have shown that sophisticated criminal 

organizations typically employ fraud 

schemes involving multiple state-title 

processes and either target nonparticipating states as the new titleissuing agent or use fraudulent or 

counterfeit title documents from a nonparticipating state in order to effect 

brand washing or cloning. Exported 

vehicles also have become a key source 

for cloning activities. NMVTIS will 

provide law enforcement agencies with 

access to make inquiries to further their 

investigations of motor vehicle theft and 

fraud—including fraud committed 

against consumers, businesses, and 

states. This access will allow law 

enforcement agencies to better identify 

stolen motor vehicles, enhance their 

ability to identify vehicle theft rings, 

identify cases of public corruption, and 

identify other criminal enterprises 

involving vehicles. NMVTIS will reduce 

the ability of organized criminal 

organizations to obtain fraudulent 

vehicle registrations by linking state and 

local authorities with real-time 

verification of information. This system 

also will provide an additional tool to 

identify and investigate international 

organized criminal and terrorist activity. 

NMVTIS will assist investigations of 

vehicles involved in violent crimes, 

smuggling (narcotics, weapons, 

undocumented aliens, and currency), 

and fraud. In addition to providing 

access to NMVTIS based on a VIN 

inquiry, the operator also will allow law 

enforcement agencies to make inquiries 

based on other search criteria in the 

system, including the organizations 

reporting data to the system, individuals 

owning, supplying, purchasing, or 

receiving such vehicles (if available), 

and export criteria. 

Services in Support of Consumer 

Access 

The operator of NMVTIS is 

responsible for ensuring that a means 

exists for allowing insurers and 

purchasers to access information, 

including information regarding brands, 

junk and salvage history, and odometer 

readings. Such access shall be provided 

to individual consumers in a single-VIN 

search arrangement and to commercial 

consumers in a single-, multiple-, or 

batch-VIN search arrangement. As noted 

above, motor vehicles that incur 

significant damage are considered 

‘‘junk’’ or ‘‘salvage.’’ Fraud occurs when 

junk or salvage motor vehicles are 

presented for sale to purchasers without 

disclosure of their real condition or 

history. Not only are unsuspecting 

purchasers paying more than the motor 

vehicle is worth, but they do not know 

if the damaged vehicles have been 

adequately repaired and are safe to 

drive. For example, during Hurricane 

Katrina, thousands of motor vehicles 

were completely flooded, and many 

remained under water for weeks before 

flood waters subsided. Many of these 

flooded motor vehicles were taken to 

other states where they were cleaned 

and sold as purportedly undamaged 

used cars, despite the damage caused by 

the flood, which jeopardizes the motor 

vehicles’ electrical and safety systems. 

In several reported cases, consumers 

purchased vehicles that had previously 

been involved in a collision, and airbags 

were not reinstalled. These consumers 

were later killed in a collision where the 

airbags could not deploy because they 

were no longer present. This fraud has 

serious consequences, not only for 

commerce and law enforcement, but 

also for highway and citizen safety. 

The cost for Web-based prospectivepurchaser inquiries for individuals shall 

be nominal and take into consideration 

the potential that consumers may lack 

credit cards or Internet access. 

Consumer-access fees charged by the 

operator may be in addition to fees that 

may be charged by other public or 

private entities participating in 

providing the service. While this rule 

does not establish minimum or 

maximum fees for such consumer access 

in order to allow it to remain ‘‘marketdriven’’ and flexible, the Department 

requires that all consumer-access fees 

and methods be approved by the 

Department prior to enactment. 

The Department anticipates that the 

operator will implement a Web-based 

method of permitting prospective 

purchasers to access NMVTIS 

information as required by the Act. 

Consumer access shall be available to 

individual and commercial consumers 

who are considering purchasing a 

vehicle or who have recently purchased 

a vehicle. Consumers accessing 

NMVTIS shall receive an indication of 

and link to the current state of title, the 

brand history (name of brand/brand 

category), the most recent odometer 

information in the system, and any 

reports on the subject vehicle from junk 

or salvage yards. 

Privacy and Security Protections for 

NMVTIS 

The operator may not release any 

personal information to individual 

prospective purchasers. The operator 

also will develop a privacy policy that 

will address the release of this 

information as well. The operator also 

will ensure that NMVTIS and associated 

access services (i.e., secure networks 

used to facilitate access to personal 

information included in NMVTIS) meet 

or exceed technology industry security 

standards, most notably any relevant 

Global Justice Information Sharing 

Initiative standards and 

recommendations. 

Accountability and Transparency 

The operator shall publish an annual 

report describing the performance of the 

system during the preceding year and 

shall include a detailed report of 

NMVTIS expenses and all revenues 

received as a result of NMVTIS 

operation. Additionally, the operator (if 

not the Department of Justice) shall be 

required to procure an independent 

financial audit of NMVTIS expenses and 

revenues during the preceding year. 

Both the annual performance and 

budget report and the independent audit 

report shall be publicly available via 

www.NMVTIS.gov. 

Although DOJ has primary 

enforcement responsibility for the 

provisions of this rule, the operator 


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shall conduct regular reviews of 

reporting compliance by all reporters to 

assess the extent to which reporting 

entities are reporting appropriately, 

documentation is in place, and other 

requirements of reporting are being met. 

The operator shall provide the results of 

such information to DOJ. The operator 

shall also maintain a publicly available, 

regularly updated listing of all entities 

reporting to NMVTIS. Such listing shall 

include the name of the reporting entity, 

city/state, contact information, and lastdata-reported date. 

6. User Fees 

Pursuant to 49 U.S.C. 30502(c), 

NMVTIS is to be ‘‘paid for by user fees 

and should be self-sufficient and not be 

dependent on amounts from the United 

States Government. The amount of fees 

the operator collects and keeps * * * 

subject to annual appropriations laws, 

excluding fees the operator collects and 

pays to an entity providing information 

to the operator, may be not more than 

the costs of operating the System.’’ 

Rather than charge states user fees based 

on the number of transactions they 

place with NMVTIS, AAMVA (the 

operator of NMVTIS) currently employs 

a ten-tiered fee structure. The fee a 

particular state is charged depends on 

the tier in which that state is placed 

based on the number of currently titled 

motor vehicles in that state. As a result 

of the great disparity between the states 

in their total number of titled motor 

vehicles, the per-vehicle fee currently 

charged by the operator of NMVTIS 

ranges from less than 1 cent per vehicle 

in the states with the most titled motor 

vehicles to nearly 7 cents per vehicle in 

the state with the lowest number of 

titled motor vehicles. This fee structure 

was developed by AAMVA and 

approved by its Board of Directors, 

comprising state motor vehicle 

administrators. As noted above, 

AAMVA is a nonprofit, tax-exempt, 

educational association representing 

U.S. and Canadian officials who are 

responsible for the administration and 

enforcement of motor vehicle laws. 

This rule requires the operator (if not 

the Department of Justice) to continue to 

charge user fees to all states based on 

the total number of motor vehicles titled 

in the state and to continue the tiered 

structure. Such a pro rata fee structure 

simplifies billing for both the states and 

the operator of NMVTIS. In addition, a 

state would not be subject to a 

significant change in user fees if it 

moves from one tier to another. Last, a 

pro rata fee structure eliminates any 

disincentive for states to make title 

verifications and encourages all states to 

participate in order to receive the 

benefits of the system they are funding. 

In addition, the Department of Justice 

requires that the operator charge user 

fees to all states, even if a state is not 

a current participant in NMVTIS. In 

accordance with 49 U.S.C. 30503(a) and 

(b), each state is required to participate 

in the system, which includes making 

titling information available to NMVTIS, 

conducting title-verification checks 

before issuing a title, and paying any 

user fees. Because all states are required 

to participate in NMVTIS, this rule 

requires that the operator charge user 

fees to all states, regardless of their 

current level of participation. Further, 

this rule requires that the operator 

notify states at least one year in advance 

of user fees and invoice every state at 

least once per year. This schedule shall 

remain in place until modified by 

agreement with DOJ. 

Under this rule, and consistent with 

the Anti-Car Theft Act, users, such as 

purchasers, insurers, consumers, and 

other non-governmental entities, may be 

charged a fee for inquiries they make to 

NMVTIS. Because of the varying levels 

of participation by the states, the 

Department has decided to eliminate the 

proposed provision prohibiting the 

operator from charging transaction fees 

for consumer transactions performed by 

fully participating states. However, the 

Department retains the authority to 

allow the operator to discount such fees 

for fully participating states. The 

operator shall not charge any user fees 

or transaction fees for inquiries made by 

law enforcement agencies. The operator 

shall ensure that all third-party 

providers of NMVTIS information are 

eligible for the same prices and 

discounts, based on the product 

implemented or provided (e.g., single 

VIN lookup, batch lookup, etc.). The 

operator shall require that all providers 

and methods of consumer access 

include a visible notice and disclaimer, 

or a link to such a notice or disclaimer, 

that provides consumers with accurate 

information on what NMVTIS includes 

and any limitations in the database. The 

names of all noncompliant states shall 

be disclosed to each consumer for 

purposes of awareness. Providers and 

methods of consumer access also will 

include a link to operator-provided 

information that explains to consumers 

how NMVTIS works, such as how 

different reporting streams may explain 

variances or seemingly conflicting 

information. Those providers and 

methods of consumer access also will 

provide a link to a state’s brand 

definitions if those brands are displayed 

and the information is available. 

The expenses to be recouped by the 

operator of NMVTIS through its fees 

will consist of labor costs, data center 

operations costs, the cost of providing 

access to authorized users, annual 

functional-enhancement costs 

(including labor and hardware), the cost 

of technical upgrades, costs to comply 

with the provisions of this rule, and 

other costs as approved by the 

Department of Justice in advance of the 

expense. The operator is authorized to 

develop a system-enhancement reserve 

that does not exceed 50% of the annual 

cost of operating the system for use in 

ensuring that critical upgrades can be 

implemented on an emergency basis as 

necessary. AAMVA currently estimates 

that the annual cost of operating 

NMVTIS is approximately $5,650,000. 

According to DOT’s 2005 Highway 

Statistics, 241,193,974 vehicles were 

titled in the United States in 2005. 

Therefore, the cost to fund NMVTIS will 

average less than 3 cents per motor 

vehicle title, although states in different 

tiers may pay slightly different rates. 

The operator of NMVTIS will inform the 

states of the applicable fees either 

through publication in the Federal 

Register or by direct notice or invoicing 

to the states. 

The operator will be required to 

recalculate its fees on at least a biennial 

(every two years) basis at least one year 

in advance of their effective date. Any 

fees charged to the states would be 

offset by transaction fees received by the 

operator. In addition, the total fees 

charged to the states would be reduced 

by future funds awarded by the U.S. 

Government to the operator to assist in 

implementing the system. Any fees 

imposed by the operator in connection 

to NMVTIS must be approved by the 

Department of Justice. 

Notwithstanding individual and batch 

lookups or inquiries, the operator shall 

not, under any circumstances, sell a 

state’s entire data set in bulk or sell the 

entire NMVTIS data set in bulk. 

Since Fiscal Year 1997, the 

Department of Justice, through BJA, has 

provided over $15 million to AAMVA 

for NMVTIS implementation. In Fiscal 

Years 2007–2009, BJA invited states to 

apply for direct funding from DOJ to 

support initial NMVTIS 

implementation. In fiscal years 2007 

and 2008, less than six states applied for 

funds each year. BJA awarded funds to 

five states in fiscal year 2007 and one 

state in 2008 to support system 

implementation. BJA also invited 

AAMVA, the system operator, to apply 

for direct funding from BJA in fiscal 

years 2007 and 2008, to supplement 

state participation fees received by 

AAMVA, as authorized under the AntiVerDate Nov<24>2008 14:59 Jan 29, 2009 Jkt 217001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 E:\FR\FM\30JAR3.SGM 30JAR3

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Car Theft Act, and encouraged states to 

apply through its other funding 

programs to enhance NMVTIS 

participation. As a result of these 

solicitations, funding was awarded to 

AAMVA to assist with NMVTIS 

implementation in fiscal years 2007 and 

2008. As noted above, funds awarded to 

the operator of NMVTIS will reduce the 

amount of user fees that must be 

imposed to implement NMVTIS once all 

states are participating. 

7. Governance 

The Department of Justice may 

establish a NMVTIS Advisory Board to 

provide input and recommendations 

from stakeholders on NMVTIS 

operations and administration. If 

created, the Advisory Board’s costs 

would be supported by the operator 

after approval of the Department of 

Justice. 

Regulatory Flexibility Act 

The Attorney General, in accordance 

with the Regulatory Flexibility Act, 5 

U.S.C. 605(b), has reviewed this 

regulation and by approving it certifies 

that this regulation will not have a 

significant economic impact on a 

substantial number of small entities. 

Although the reporting requirements 

imposed by the Anti-Car Theft Act will 

apply to all small insurance companies 

and small junk and salvage yard 

operators that handle junk or salvage 

automobiles, the Department believes 

that the incremental cost for these 

entities to collect VINs and the other 

required information will be minimal 

and that the rule will not have a 

significant economic impact on them. 

Many insurance companies and junk 

and salvage yards already capture VINs 

as a means of positively identifying 

automobiles and tracking inventory. The 

additional cost to insurance companies, 

junk yard operators, and salvage yard 

operators to report the collected 

information electronically to NMVTIS is 

not expected to exceed 1 cent per motor 

vehicle for most entities after the first 

year. In the first year only, start-up 

investments increase this per-vehicle 

cost to approximately 4 cents per 

vehicle. For the estimated small number 

of non-automated reporting entities, a 

manual reporting process may be 

required, in which case the additional 

cost is estimated at 96 cents per vehicle 

annually. In the first year only, the cost 

for these entities is estimated at $1.86 

per vehicle due to initial investment or 

start-up needs. Indeed, these costs may 

be significantly lower or possibly even 

eliminated altogether if insurance, 

salvage, and junk data is provided 

through a third party that may already 

have access to the data and may be in 

a position to establish a data-sharing 

arrangement with NMVTIS in order to 

reduce the reporting burden on these 

entities. 

Moreover, insurance companies will 

not be required to provide data on 

automobiles older than the four 

previous model years. In addition, junk 

and salvage yards will not be required 

to report if they already report the 

required information to the state and the 

state makes that information available to 

the operator. The Department has 

attempted to minimize the impact of the 

rule on small businesses by allowing 

them to use third parties to report the 

statutorily required information to 

NMVTIS. In addition, the monthly 

reporting requirements of this rule only 

apply to automobiles obtained by the 

business within the prior month or in 

cases where an update or correction to 

previously reported data is needed. 

Paperwork Reduction Act 

This information collection has been 

submitted to the Office of Management 

and Budget (OMB) for review in 

accordance with the procedures of the 

Paperwork Reduction Act of 1995, 

Public Law No. 104–13, 109 Stat. 163. 

If additional information is required 

contact: Lynn Bryant, Department 

Clearance Officer, United States 

Department of Justice, Justice 

Management Division, Policy and 

Planning Staff, Patrick Henry Building, 

Suite 1600, 601 D Street, NW., 

Washington, DC 20530. 

Unfunded Mandates Reform Act of 

1995 

This rule will not result in the 

expenditure by state, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year, and it will not 

significantly or uniquely affect small 

governments. Therefore, no actions were 

deemed necessary under the provisions 

of the Unfunded Mandates Reform Act 

of 1995. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This rule is not a major rule as 

defined by section 251 of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, 5 U.S.C. 804. This 

rule will not result in a major increase 

in costs or prices or have significant 

adverse effects on competition, 

employment, investment, productivity, 

innovation, or on the ability of United 

States-based companies to compete with 

foreign-based companies in domestic 

and export markets. 

Executive Order 12866 

This regulation has been drafted and 

reviewed in accordance with Executive 

Order 12866, ‘‘Regulatory Planning and 

Review,’’ section 1(b), Principles of 

Regulation. The Department of Justice 

has determined that this rule is a 

‘‘significant regulatory action’’ under 

Executive Order 12866, section 3(f). 

Accordingly, this rule has been 

reviewed by the Office of Management 

and Budget. 

Regulatory Impact Assessment 

In 1999, the GAO conducted a review 

of NMVTIS. The GAO report found that 

a life-cycle cost and benefits analysis 

should be performed to determine if 

further federal funding of NMVTIS was 

warranted. Accordingly, at the request 

of the Department of Justice, the 

Logistics Management Institute 

conducted such an analysis. The 2001 

LMI report found that NMVTIS would 

achieve significant net benefits if it is 

fully implemented in all 50 states and 

the District of Columbia. In addition, the 

2006 IJIS Institute report found that: 

‘‘the NMVTIS program provides an 

invaluable benefit to state vehicle 

administrators and the public 

community as a whole. Advantages of 

the program include improving the state 

titling process, as well as providing key 

information to consumers and law 

enforcement agencies.’’ Based on these 

reviews of NMVTIS and the 

Department’s experience with 

automobile theft and fraud, the 

Department believes that the full 

implementation of NMVTIS should 

reduce the market for stolen motor 

vehicles, enhance public safety, and 

reduce fraud. This rule will serve to 

enhance the efficacy of NMVTIS by 

implementing the statutory reporting 

requirements imposed on junk and 

salvage yards and insurance carriers and 

clarifying the obligations of the states 

and the operator of NMVTIS. 

The operator of the NMVTIS is 

entitled to receive revenues from user 

fees to support the system. Currently, 

these fees generate approximately $1.5 

million annually. AAMVA, however, 

estimates the annual operating cost of 

the system to be approximately 

$5,650,000—depending on necessary 

system upgrades that may be required 

and user volume. Therefore, the current 

AAMVA fee structure under-funds 

NMVTIS by $4,150,000 according to its 

estimates. According to the Department 

of Transportation’s 2005 Highway 

Statistics, 241,193,974 vehicles were 

titled in the United States in 2005. 

Therefore, the total cost to the operator 

to fund NMVTIS ranges from 1 cent to 


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2.3 cents per motor vehicle title titled in 

the U.S. 

Consequently, the average fees 

charged to the states by the operator 

under this proposed rule should be less 

than 3 cents per vehicle. In most cases, 

states that choose to integrate the 

NMVTIS processes of data provision 

and inquiry into their titling process 

generally incur one-time upgrade costs 

to establish these connections. In nearly 

every case, once a connection to the 

system is established, data transmission 

for uploads and inquiries is automated 

and occurs without recurring costs. 

With these one-time costs and state fees 

considered, the costs to states are 

estimated at 6 cents per vehicle. This 

scenario includes making the data 

available to NMVTIS via real-time 

updates and making inquiries into the 

system prior to issuing new titles. While 

the frequency of reporting does not 

impact costs under this scenario, states 

can lower their upgrade costs by 

choosing to integrate the NMVTIS 

reporting and inquiry requirements into 

their business rules but not into their 

electronic titling processes. In these 

cases, states would see lower costs by 

establishing a regular reporting/data 

upload process but not re-engineering 

their own title-information systems for 

real-time updates. Under this scenario, 

instead of a state’s title-information 

system automatically making the 

NMVTIS inquiry, the title clerk would 

switch to an internet-enabled PC to 

perform a web search of NMVTIS via a 

secure virtual private network (VPN). In 

addition, the cost is minimized because 

a state is only required to check out-ofstate titles. Moreover, because this type 

of search is internet-based versus statetitle-information system-based, no 

changes to the state’s title-information 

system is required and therefore there is 

no cost for this aspect of compliance. 

For the reporting aspect however (i.e., 

programming an automated batch 

upload process via file transfer protocol 

(FTP)), it is anticipated that states 

would incur reporting costs of less than 

1 cent per vehicle. Assuming the 

reporting costs for states are 0.005 cents 

per vehicle and that 241,193,974 

vehicles are titled in the United States, 

the Department estimates that the 

reporting costs for states is 

approximately $1,205,970. 

The incremental cost to insurance 

companies and junk- and salvage-yard 

operators that handle junk or salvage 

automobiles also is expected to be low. 

Many insurance companies and junk 

and salvage yards already capture VINs 

as a means of positively identifying 

automobiles and tracking inventory. 

Additionally, for both the insurance 

sector and the junk/salvage industry, 

many companies are already reporting 

much of the required data to 

independent third parties who have 

indicated a willingness to pass this data 

on to DOJ for NMVTIS use. 

According to the NICB, it is estimated 

that there are approximately 321 

insurance groups representing 

approximately 3,000 insurers that report 

an estimated 2.4 million salvage and 

total-loss records annually (based on the 

most recent three-year average). 

Furthermore, based on 2007 insurance 

data, over 60% of these motor vehicles 

will originate from the ten largest 

insurance groups. These 3,000 insurers 

would then be responsible for reporting 

this total-loss information to NMVTIS if 

not already reported to a third party that 

agrees to provide the data to NMVTIS. 

In those cases where the data is already 

reported to a state or to a cooperating 

third party, there is no additional cost 

to insurance carriers. In cases where this 

data is not currently reported to a 

cooperating third party, the carrier 

would be required to report the data to 

NMVTIS. With the assumption that the 

data is already collected in an 

exportable format, and assuming that 

NMVTIS would establish a reporting 

mechanism involving a simple FTPbased solution, the cost to insurance 

carriers is similar to the state reporting 

costs of less than 1 cent per vehicle. The 

FBI previously has estimated that 

approximately 10.5 million junk and 

salvage vehicles are handled each year. 

Assuming that it costs insurance carriers 

approximately 0.005 cents per vehicle to 

report and that the insurance carriers 

are required to report on all 10.5 million 

junk and salvage vehicles, then the 

reporting costs to insurance carriers will 

be approximately $52,500 annually. 

Similarly, junk and salvage yard 

operators that already are reporting to 

cooperating third parties would not be 

required to report separately. Thus, 

NMVTIS would impose no additional 

burden. For those entities not 

voluntarily reporting to a cooperating 

third party, a separate reporting 

mechanism would be established. 

Depending on the type of mechanism 

established (e.g., FTP-based solution, 

form-fax solution, etc.), the costs will 

vary. It is assumed that all junk and 

salvage yard operators already collect 

much of the information required under 

the rule, and therefore, it is only the 

transmission of this data to NMVTIS 

that will result in costs. The table below 

summarizes these cost estimates. 

Yard size Reporting method 

Initial 

investment 

costs 

Annual ongoing labor 

costs 

Annual vehicle 

volume * 

Total annual 

average labor 

costs per 

vehicle (cents) 

Total first year 

costs (includes 

initial investment costs 

and annual 

labor costs) 

Small (non-automated) Fax .............................. $90 12 hours per year/ 

$96.00.

1–200 96 $1.86. 

Small (automated) ........ FTP ............................. 0 24 minutes per year/ 

$3.12.

1–200 3 3 cents. 

Medium ......................... FTP ............................. 0 24 minutes per year/ 

$3.12.

201–500 <1 <1 cent. 

Large ............................ FTP ............................. 250 24 minutes per year/ 

$3.12.

501–7,800 <1 6 cents. 

(* Note: Per-vehicle costs based on an average annual vehicle volumes.) 

While it is difficult to estimate how 

many junk and salvage yards are not 

automated, the National Salvage Vehicle 

Reporting Program and other industry 

representatives estimate that nearly all 

have some form of data collection even 

if they do not have automation in place. 

The National Salvage Vehicle Reporting 

Program has discussed with many of the 

inventory-management vendors the 

assistance that can be made available to 

establish reliable reporting protocols 

through its voluntary and independent 

efforts within the industry. If such 

assistance is available from these 

vendors, nearly all junk and salvage 

yards will have some form of 

automation and be capable of exporting 


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5776 Federal Register / Vol. 74, No. 19 / Friday, January 30, 2009 / Rules and Regulations 

and sending monthly reports 

electronically. 

In cases in which small junk and 

salvage yards have no form of 

automation or computerized files, the 

Department assumes that a fax or other 

data-transmittal process would be 

needed. This paper-based process 

would likely incur additional labor 

costs that would bring the estimated 

per-vehicle costs for this small number 

of businesses to approximately 0.96 

cents per vehicle (annual labor costs). 

However, according to industry 

representatives, the number of junk and 

salvage yards of this size is relatively 

small (estimated at 20% of licensed junk 

and salvage yards) and the number of 

businesses without any automation is 

even lower (expected to be less than 

1,700 licensed businesses in the U.S.). 

These businesses would not incur these 

costs if already reporting this data to a 

state or another cooperating third party. 

Assuming that small junk and salvage 

yards handle approximately 170,000 

vehicles annually (at $0.96 per vehicle 

annual labor costs) and that the 

remaining junk and salvage yards 

handle 10,330,000 vehicles annually (at 

an average labor cost of 1 cent per 

vehicle), then the Department estimates 

that their annual reporting costs will be 

approximately $266,500. 

The Department anticipates that the 

cost for web-based prospectivepurchaser inquiries will be nominal. 

Similarly, the cost to law enforcement to 

access NMVTIS also is expected to be 

minimal because law enforcement will 

not be charged any direct transaction 

costs. Law enforcement will access 

NMVTIS through their existing 

infrastructure. The only cost will be to 

the operator of the system based on the 

number of inquiries received from law 

enforcement. The expected cost to the 

operator is less than 12 cents per 

inquiry. 

The Department of Justice also 

considered possible alternatives to those 

proposed in the rule. Indeed, pursuant 

to 49 U.S.C. 30504(c), the Attorney 

General was required to establish 

‘‘procedures and practices to facilitate 

reporting in the least burdensome and 

costly fashion’’ on insurance carriers 

and junk and salvage yards. Because of 

the statutory requirements imposed by 

the Anti-Car Theft Act, however, the 

Department of Justice did not have 

many options regarding the information 

that must be provided and the scope of 

the entities that must report the required 

information. In particular, the 

information required to be reported by 

the proposed rule is mandated by the 

Anti-Car Theft Act. The Department also 

considered various alternatives for 

funding NMVTIS, such as a tiered-based 

fee structure and a transaction-based fee 

structure. Based on the comments to the 

proposed rule, the Department believes 

that a tiered fee structure based on the 

total number of motor vehicles titled in 

a state is preferable to these alternatives 

because it complies with the Anti-Car 

Theft Act and minimizes any burden 

imposed on reporting entities. 

With regard to all sector reporting 

requirements, in most cases reducing 

the reporting timelines from monthly to 

semi-annually or less will not 

significantly reduce costs due to the 

benefits of automated processes. 

Additionally, the costs that this reduced 

reporting would incur by enabling theft 

and fraud to continue far outweighs the 

benefits. Consumers, states, law 

enforcement, and others need to know 

as soon as possible when a vehicle is 

reported as totaled or salvage to prevent 

the vehicle from being turned over to 

another state or consumer with a clean 

title. Moreover, a monthly reporting 

cycle is expressly required by statute. 

Executive Order 13132 

In accordance with section 6 of 

Executive Order 13132, the Department 

of Justice has determined that this rule 

does not have sufficient federalism 

implications to warrant a federalism 

summary impact statement. The rule 

does not impose substantial direct 

compliance costs on state and local 

governments and does not preempt state 

law. In formulating this rule, the 

Department has worked closely with 

AAMVA regarding the implementation 

of NMVTIS. 

Executive Order 12988 

This rule meets the applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 

Justice Reform. 

List of Subjects 

28 CFR Part 25 

Crime, Law enforcement, Motor 

vehicles safety, Motor vehicles, 

Reporting and recordkeeping 

requirements, Transportation. 

■ Accordingly, by virtue of the authority 

vested in me as Attorney General, 

including 5 U.S.C. 301 and 28 U.S.C. 

509 and 510 and, for the reasons set 

forth in the preamble, part 25 of chapter 

I of title 28 of the Code of Regulations 

is amended as follows: 

PART 25—DEPARTMENT OF JUSTICE 

INFORMATION SYSTEMS 

■ 1. The Authority citation for part 25 

is revised to read as follows: 

Authority: Public Law 103–159, 107 Stat. 

1536, 49 U.S.C. 30501–30505; Public Law 

101–410, 104 Stat. 890, as amended by Public 

Law 104–134, 110 Stat. 1321. 

■ 2. Add a new subpart B to read as 

follows: 

Subpart B—National Motor Vehicle Title 

Information System (NMVTIS) 

Sec. 

25.51 Purpose and authority. 

25.52 Definitions. 

25.53 Responsibilities of the operator of 

NMVTIS. 

25.54 Responsibilities of the States. 

25.55 Responsibilities of insurance carriers. 

25.56 Responsibilities of junk yards and 

salvage yards and auto recyclers. 

25.57 Erroneous junk or salvage reporting. 

Subpart B—National Motor Vehicle 

Title Information System (NMVTIS) 

§ 25.51 Purpose and authority. 

The purpose of this subpart is to 

establish policies and procedures 

implementing the National Motor 

Vehicle Title Information System 

(NMVTIS) in accordance with title 49 

U.S.C. 30502. The purpose of NMVTIS 

is to assist in efforts to prevent the 

introduction or reintroduction of stolen 

motor vehicles into interstate 

commerce, protect states and individual 

and commercial consumers from fraud, 

reduce the use of stolen vehicles for 

illicit purposes including fundraising 

for criminal enterprises, and provide 

consumer protection from unsafe 

vehicles. 

§ 25.52 Definitions. 

For purposes of this subpart B: 

Acquiring means owning, possessing, 

handling, directing, or controlling. 

Automobile has the same meaning 

given that term in 49 U.S.C. 32901(a). 

Certificate of title means a document 

issued by a state showing ownership of 

an automobile. 

Insurance carrier means an individual 

or entity engaged in the business of 

underwriting automobile insurance. 

Junk automobile means an automobile 

that— 

(1) Is incapable of operating on public 

streets, roads, and highways; and 

(2) Has no value except as a source of 

parts or scrap. 

Junk yard means an individual or 

entity engaged in the business of 

acquiring or owning junk automobiles 

for— 

(1) Resale in their entirety or as spare 

parts; or 

(2) Rebuilding, restoration, or 

crushing. 

Motor vehicle has the same meaning 

given that term in 49 U.S.C. 3102(6). 

NMVTIS means the National Motor 

Vehicle Title Information System. 


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Operator means the individual or 

entity authorized or designated as the 

operator of NMVTIS under 49 U.S.C. 

30502(b), or the office designated by the 

Attorney General, if there is no 

authorized or designated individual or 

entity. 

Purchaser means the individual or 

entity buying an automobile or 

financing the purchase of an 

automobile. For purposes of this 

subpart, purchasers include dealers, 

auction companies or entities engaged 

in the business of purchasing used 

automobiles, lenders financing the 

purchase of new or used automobiles, 

and automobile dealers. 

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. Salvage 

automobiles include automobiles 

determined to be a total loss under the 

law of the applicable jurisdiction or 

designated as a total loss by an insurer 

under the terms of its policies, 

regardless of whether or not the 

ownership of the vehicle is transferred 

to the insurance carrier. 

Salvage yard means an individual or 

entity engaged in the business of 

acquiring or owning salvage 

automobiles for— 

(1) Resale in their entirety or as spare 

parts; or 

(2) Rebuilding, restoration, or 

crushing. 

Note to definition of ‘‘Salvage yard’’: 

For purposes of this subpart, vehicle 

remarketers and vehicle recyclers, 

including scrap vehicle shredders and 

scrap metal processors as well as ‘‘pullor pick-apart yards,’’ salvage pools, 

salvage auctions, and other types of 

auctions handling salvage or junk 

vehicles (including vehicles declared a 

‘‘total loss’’), are included in the 

definition of ‘‘junk or salvage yards.’’ 

State means a state of the United 

States or the District of Columbia. 

Total loss means that the cost of 

repairing such vehicles plus projected 

supplements plus projected diminished 

resale value plus rental reimbursement 

expense exceeds the cost of buying the 

damaged motor vehicle at its preaccident value, minus the proceeds of 

selling the damaged motor vehicle for 

salvage. 

VIN means the vehicle identification 

number; 

§ 25.53 Responsibilities of the operator of 

NMVTIS. 

(a) By no later than March 31, 2009, 

the operator shall make available: 

(1) To a participating state on request 

of that state, information in NMVTIS 

about any automobile; 

(2) To a Government, state, or local 

law enforcement official on request of 

that official, information in NMVTIS 

about a particular automobile, junk 

yard, or salvage yard; 

(3) To a prospective purchaser of an 

automobile on request of that purchaser, 

information in NMVTIS about that 

automobile; and 

(4) To a prospective or current insurer 

of an automobile on request of that 

insurer, information in NMVTIS about 

the automobile. 

(b) NMVTIS shall permit a user of the 

system 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 VIN 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; 

(4) For an automobile known to be 

titled in a particular state, the odometer 

mileage disclosure required under 49 

U.S.C. 32705 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 VIN has been reported as a junk 

automobile or a salvage automobile 

under 49 U.S.C. 30504. 

(c) The operator is authorized to seek 

and accept, with the concurrence of the 

Department of Justice, additional 

information from states and public and 

private entities that is relevant to the 

titling of automobiles and to assist in 

efforts to prevent the introduction or 

reintroduction of stolen motor vehicles 

and parts into interstate commerce. The 

operator, however, may not collect any 

social security account numbers as part 

of any of the information provided by 

any state or public or private entity. The 

operator may not make personally 

identifying information contained 

within NMVTIS, such as the name or 

address of the owner of an automobile, 

available to an individual prospective 

purchaser. With the approval of the 

Department of Justice, the operator may 

allow public and private entities that 

provide information to NMVTIS to 

query the system if such access will 

assist in efforts to prevent the 

introduction or reintroduction of stolen 

motor vehicles and parts into interstate 

commerce. 

(d) The operator shall develop and 

maintain a privacy policy that addresses 

the information in the system and how 

personal information shall be protected. 

DOJ shall review and approve this 

privacy policy. 

(e) The means by which access is 

provided by the operator to users of 

NMVTIS must be approved by the 

Department of Justice. 

(f) The operator shall biennially 

establish and at least annually collect 

user fees from the states and users of 

NMVTIS to pay for its operation, but the 

operator may not collect fees in excess 

of the costs of operating the system. The 

operator is required to recalculate the 

user fees on a biennial basis. After the 

operator establishes its initial user fees 

for the states under this section, 

subsequent state user fees must be 

established at least one year in advance 

of their effective date. Any user fees 

established by the operator must be 

established with the approval of the 

Department of Justice. The operator of 

NMVTIS will inform the states of the 

applicable user fees either through 

publication in the Federal Register or 

by direct notice or invoice to the states. 

(1) The expenses to be recouped by 

the operator of NMVTIS will consist of 

labor costs, data center operations costs, 

the cost of providing access to 

authorized users, annual functional 

enhancement costs (including labor and 

hardware), costs necessary for 

implementing the provisions of this 

rule, the cost of technical upgrades, and 

other costs approved in advance by the 

Department of Justice. 

(2) User fees collected from states 

should be based on the states’ pro rata 

share of the total number of titled motor 

vehicles based on the Highway Statistics 

Program of the Federal Highway 

Administration, U.S. Department of 

Transportation, except in cases where 

states did not report to that program, in 

which case the states shall make 

available the most recent statistics for 

motor vehicle title registrations. 

(3) All states, regardless of their level 

of participation, shall be charged user 

fees by the operator. 

(4) No fees shall be charged for 

inquiries from law enforcement 

agencies. 

(g) The operator will establish 

procedures and practices to facilitate 

reporting to NMVTIS in the least 

burdensome and costly fashion. If the 

operator is not the Department of 

Justice, the operator must provide an 

annual report to the Department of 

Justice detailing the fees it collected and 

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funds to operate NMVTIS. This report 

must also include a status report on the 

implementation of the system, 

compliance with reporting and other 

requirements, and sufficient detail and 

scope regarding financial information so 

that reasonable determinations can be 

made regarding budgeting and 

performance. The operator shall procure 

an independent financial audit of 

NMVTIS revenues and expenses on an 

annual basis. The Department of Justice 

will make these reports available for 

public inspection. 

§ 25.54 Responsibilities of the States. 

(a) Each state must maintain at least 

the level of participation in NMVTIS 

that it had achieved as of January 1, 

2009. By no later than January 1, 2010, 

each state must have completed 

implementation of all requirements of 

participation and provide, or cause to be 

provided by an agent or third party, to 

the designated operator and in an 

electronic format acceptable to the 

operator, at a frequency of once every 24 

hours, titling information for all 

automobiles maintained by the state. 

The titling information provided to 

NMVTIS must include the following: 

(1) VIN; 

(2) Any description of the automobile 

included on the certificate of title 

(including any and all brands associated 

with such vehicle); 

(3) The name of the individual or 

entity to whom the certificate was 

issued; 

(4) Information from junk or salvage 

yard operators or insurance carriers 

regarding the acquisition of junk 

automobiles or salvage automobiles, if 

this information is being collected by 

the state; and 

(5) For an automobile known to be 

titled in a particular state, the odometer 

mileage disclosure required under 49 

U.S.C. 32705 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. 

(b) With the approval of the operator 

and the state, the titling information 

provided to NMVTIS may include any 

other information included on the 

certificates of title and any other 

information the state maintains in 

relation to these titles. 

(c) By no later than January 1, 2010, 

each state shall establish a practice of 

performing a title verification check 

through NMVTIS 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 or in cases of title 

transfers. The check will consist of— 

(1) Communicating to the operator the 

VIN of the automobile for which the 

certificate of title is sought; 

(2) Giving the operator an opportunity 

to communicate to the participating 

state the results of a search of the 

information and using the results to 

determine the validity and status of a 

document purporting to be a 

certification of title, to determine 

whether the automobile has been a junk 

or salvage vehicle or has been reported 

as such, to compare and verify the 

odometer information presented with 

that reported in the system, and to 

determine the validity of other 

information presented (e.g., lien-holder 

status, etc.). 

(d) By January 1, 2010, those states 

not currently paying user fees will be 

responsible for paying user fees as 

established by the operator to support 

NMVTIS. 

§ 25.55 Responsibilities of insurance 

carriers. 

(a) By no later than March 31, 2009, 

and on a monthly basis as designated by 

the operator, any individual or entity 

acting as an insurance carrier 

conducting business within the United 

States shall provide, or cause to be 

provided on its behalf, to the operator 

and in a format acceptable to the 

operator, a report that contains an 

inventory of all automobiles of the 

current model year or any of the four 

prior model years that the carrier, 

during the past month, has obtained 

possession of and has decided are junk 

automobiles or salvage automobiles. An 

insurance carrier shall report on any 

automobiles that it has determined to be 

a total loss under the law of the 

applicable jurisdiction (i.e. , state) or 

designated as a total loss by the 

insurance company under the terms of 

its policies. 

(b) The inventory must contain the 

following information: 

(1) The name, address, and contact 

information for the reporting entity 

(insurance carrier); 

(2) VIN; 

(3) The date on which the automobile 

was obtained or designated as a junk or 

salvage automobile; 

(4) The name of the individual or 

entity from whom the automobile was 

obtained and who possessed it when the 

automobile was designated as a junk or 

salvage automobile; and 

(5) The name of the owner of the 

automobile at the time of the filing of 

the report. 

(c) Insurance carriers are strongly 

encouraged to provide the operator with 

information on other motor vehicles or 

other information relevant to a motor 

vehicle’s title, including the reason why 

the insurance carrier obtained 

possession of the motor vehicle. For 

example, the insurance carrier may have 

obtained possession of a motor vehicle 

because it had been subject to flood, 

water, collision, or fire damage, or as a 

result of theft and recovery. The 

provision of information provided by an 

insurance carrier under this paragraph 

must be pursuant to a means approved 

by the operator. 

(d) Insurance carriers whose required 

data is provided to the operator through 

an operator-authorized third party in a 

manner acceptable to the operator are 

not required to duplicate such reporting. 

For example, if the operator and a 

private third-party organization reach 

agreement on the provision of insurance 

data already reported by insurance to 

the third party, insurance companies are 

not required to subsequently report the 

information directly into NMVTIS. 

§ 25.56 Responsibilities of junk yards and 

salvage yards and auto recyclers. 

(a) By no later than March 31, 2009, 

and continuing on a monthly basis as 

designated by the operator, any 

individual or entity engaged in the 

business of operating a junk yard or 

salvage yard within the United States 

shall provide, or cause to be provided 

on its behalf, to the operator and in a 

format acceptable to the operator, an 

inventory of all junk automobiles or 

salvage automobiles obtained in whole 

or in part by that entity in the prior 

month. 

(b) The inventory shall include the 

following information: 

(1) The name, address, and contact 

information for the reporting entity 

(junk, salvage yard, recycler); 

(2) VIN; 

(3) The date the automobile was 

obtained; 

(4) The name of the individual or 

entity from whom the automobile was 

obtained; 

(5) A statement of whether the 

automobile was crushed or disposed of, 

for sale or other purposes, to whom it 

was provided or transferred, and if the 

vehicle is intended for export out of the 

United States. 

(c) Junk and salvage yards, however, 

are not required to report this 

information if they already report the 

information to the state and the state 

makes the information required in this 

rule available to the operator. 

(d) Junk and salvage yards may be 

required to file an update or 

supplemental report of final disposition 

of any automobile where final 

disposition information was not 

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filing, or if their actual disposition of 

the automobile differs from what was 

initially reported. 

(e) Junk and salvage yards are 

encouraged to provide the operator with 

similar information on motor vehicles 

other than automobiles that they obtain 

that possess VINs. 

(f) Junk- and salvage-yard operators 

whose required data is provided to the 

operator through an operator-authorized 

third party (e.g., state or other public or 

private organization) in a manner 

acceptable to the operator are not 

required to duplicate such reporting. In 

addition, junk and salvage yards are not 

required to report on an automobile if 

they are issued a verification under 49 

U.S.C. 33110 stating that the automobile 

or parts from the automobile are not 

reported as stolen. 

(g) Such entities must report all 

salvage or junk vehicles they obtain, 

including vehicles from or on behalf of 

insurance carriers, which can be 

reasonably assumed are total loss 

vehicles. Such entities, however, are not 

required to report any vehicle that is 

determined not to meet the definition of 

salvage or junk after a good-faith 

physical and value appraisal conducted 

by qualified appraisal personnel, so long 

as such appraisals are conducted 

entirely independent of any other 

interests, persons or entities. 

Individuals and entities that handle less 

than five vehicles per year that are 

determined to be salvage, junk, or total 

loss are not required to report under the 

salvage-yard requirements. 

(h) Scrap metal processors and 

shredders that receive automobiles for 

recycling where the condition of such 

vehicles generally prevent VINs from 

being identified are not required to 

report to the operator if the source of 

each vehicle has already reported the 

vehicle to NMVTIS. In cases where a 

supplier’s compliance with NMVTIS 

cannot be ascertained, however, scrap 

metal processors and shredders must 

report these vehicles to the operator 

based on a visual inspection if possible. 

If the VIN cannot be determined based 

on this inspection, scrap metal 

processors and shredders may rely on 

primary documentation (i.e., title 

documents) provided by the vehicle 

supplier. 

§ 25.57 Erroneous junk or salvage 

reporting. 

(a) In cases where a vehicle is 

erroneously reported to have been 

salvage or junk and subsequently 

destroyed (i.e., crushed), owners of the 

legitimate vehicles are encouraged to 

seek a vehicle inspection in the current 

state of title whereby inspection officials 

can verify via hidden VINs the vehicle’s 

true identity. Owners are encouraged to 

file such inspection reports with the 

current state of title and to retain such 

reports so that the vehicle’s true history 

can be documented. 

(b) To avoid the possibility of fraud, 

the operator may not allow any entity to 

delete a prior report of junk or salvage 

status. 

Dated: January 23, 2009. 

Mark Filip, 

Acting Attorney General. 

[FR Doc. E9–1835 Filed 1–26–09; 11:15 am] 

BILLING CODE 4410–02–P 


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