II

103D CONGRESS

1ST SESSION S. 1232

To amend the Motor Vehicle Information and Cost Savings Act to require

the establishment of Federal requirements regarding the disclosure and

reporting of salvage vehicles and manufacturer buyback vehicles.

IN THE SENATE OF THE UNITED STATES

JULY 15 (legislative day, JUNE 30), 1993

Mr. GORTON introduced the following bill; which was read twice and referred

to the Committee on Commerce, Science, and Transportation

A BILL

To amend the Motor Vehicle Information and Cost Savings

Act to require the establishment of Federal requirements

regarding the disclosure and reporting of salvage vehicles

and manufacturer buyback vehicles.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be referred to as the ‘‘Used Car

5 Consumer Notification and Reporting Act’’.

6 SEC. 2. FINDINGS.

7 The Congress makes the following findings:
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1 (1) Many States do not have specific require2 ments regarding the disclosure of a motor vehicle’s

3 history and even fewer States require that the motor

4 vehicle’s title be stamped or branded to indicate that

5 it is a salvage vehicle or a manufacturer buyback

6 vehicle.

7 (2) The State disclosure requirements that do

8 exist regarding a motor vehicle’s history are incon9 sistent with one another in scope and language, re10 quire the use of various and different forms and ad11 ministrative procedures, and are duplicative, burden12 some on interstate commerce, and confusing to con13 sumers.

14 (3) The fact that a motor vehicle is a salvage

15 vehicle or a manufacturer buyback vehicle is mate16 rial to any subsequent sale of the vehicle.

17 (4) Many salvage vehicles and manufacturer

18 buyback vehicles are subsequently resold at auction

19 or by used motor vehicle dealers and thus recycled

20 back into the marketplace, back onto the streets,

21 and back into repair shops.

22 (5) Rebuilt motor vehicles may not have passed

23 a rigorous safety inspection and may pose a safety

24 risk, according to the National Highway Traffic

25 Safety Administration, and consumers who unknow-
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1 ingly buy these motor vehicles face an increased risk

2 of death or serious injury in motor vehicle accidents.

3 SEC. 3. MOTOR VEHICLE DAMAGE DISCLOSURE REQUIRE4 MENTS.

5 The Motor Vehicle Information and Cost Savings Act

6 (15 U.S.C. 1901 et seq.) is amended by inserting at the

7 end the following new title:

8 ‘‘TITLE VII—MOTOR VEHICLE DAMAGE

9 DISCLOSURE REQUIREMENTS

10 ‘‘SEC. 701. DEFINITIONS.

11 ‘‘For the purposes of this title, the following defini12 tions shall apply:

13 ‘‘(1) CERTIFICATE OF TITLE.—The term ‘cer14 tificate of title’ means a document issued by a State

15 evidencing ownership of a motor vehicle.

16 ‘‘(2) MOTOR VEHICLE.—The term ‘motor vehi17 cle’ has the same meaning as the term ‘passenger

18 motor vehicle’ in section 2 of the Motor Vehicle In19 formation and Cost Savings Act.

20 ‘‘(3) MANUFACTURER BUYBACK VEHICLE.—The

21 term ‘manufacturer buyback vehicle’ means a motor

22 vehicle that has been repurchased, replaced, or reac23 quired by a motor vehicle manufacturer, distributor,

24 or dealer due to a nonconformity in the motor vehi25 cle pursuant to a State lemon law by—
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1 ‘‘(A) an order or judgment by a court of

2 law; or an agreement between the parties to set3 tle before trial; or

4 ‘‘(B) a decision by a formal, informal, or

5 mandatory arbitration procedure;

6 ‘‘(4) SALVAGE VEHICLE.—The term ‘salvage ve7 hicle’ means a motor vehicle that has been issued a

8 title in any State bearing any word or symbol sig9 nifying that the motor vehicle is a ‘salvage’, ‘junk’,

10 ‘reconstructed’, or ‘rebuilt’ motor vehicle, or that the

11 motor vehicle has been severely damaged by flood.

12 ‘‘(5) SECRETARY.—The term ‘Secretary’ means

13 the Secretary of Transportation.

14 ‘‘(6) STATE.—The term ‘State’ means each of

15 the several States of the United States, the District

16 of Columbia, and the Commonwealth of Puerto Rico.

17 ‘‘SEC. 702. DISCLOSURE REQUIREMENTS.

18 ‘‘(a) REGULATIONS.—The Secretary shall promulgate

19 regulations, which shall become effective not later than

20 180 days after the date of the enactment of this title, that

21 establish uniform Federal requirements, as provided in

22 subsection (b), regarding the disclosure to consumers that

23 a motor vehicle is a salvage vehicle or a manufacturer

24 buyback vehicle.
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1 ‘‘(b) SPECIFIC REQUIREMENTS.—In carrying out the

2 provisions of subsection (a), the Secretary shall—

3 ‘‘(1) prescribe the form and content of a na4 tional uniform certificate of title that discloses that

5 a motor vehicle sold on or after the effective date of

6 such regulations is a salvage vehicle or a manufac7 turer buyback vehicle;

8 ‘‘(2) prescribe the form and content of a na9 tional uniform sticker, to be affixed, prior to the sale

10 of the motor vehicle, to the windshield of a salvage

11 vehicle or a manufacturer buyback vehicle sold on or

12 after the effective date of such regulations, which

13 discloses that the motor vehicle is a salvage vehicle

14 or a manufacturer buyback vehicle;

15 ‘‘(3) prescribe the form and content of a na16 tional uniform consumer disclosure statement that—

17 ‘‘(A) includes the motor vehicle make,

18 model, year, vehicle identification number, and

19 any prior title numbers and prior States of title;

20 and

21 ‘‘(B) discloses that a motor vehicle sold on

22 or after the effective date of the regulations

23 promulgated pursuant to this section is (accord24 ing to records available to the State issuing the

25 certificate of title, including records from any
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1 State in which a certificate of title has pre2 viously been issued for such motor vehicle) a

3 salvage vehicle or a manufacturer buyback vehi4 cle and the reason for such designation;

5 ‘‘(4) provide that a motor vehicle, the ownership

6 of which is transferred on or after the effective date

7 of the regulation, may not be licensed for use in any

8 State unless the State discloses in writing on the

9 certificate of title whether records readily accessible

10 to the State indicate whether the vehicle is a salvage

11 vehicle or a manufacturer buyback vehicle; and

12 ‘‘(5) provide for a civil penalty, not to exceed

13 $10,000, which shall be assessed by the Secretary

14 for each violation of a regulation promulgated by the

15 Secretary pursuant to this section.

16 ‘‘SEC. 703. UNFAIR TRADE PRACTICE.

17 ‘‘A violation of any regulation promulgated by the

18 Secretary pursuant to section 4 shall be deemed an unfair

19 or deceptive act or practice for purposes of section 5(a)(1)

20 of the Federal Trade Commission Act.

21 ‘‘SEC. 704. EFFECT ON STATE LAW.

22 ‘‘Effective on the date the regulations promulgated

23 pursuant to section 4 become effective, the provisions of

24 this title shall supersede any provision of the law of any

25 State relating to the disclosure of whether a motor vehicle
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1 is a salvage vehicle or manufacturer buyback vehicle to

2 the extent that the provision of State law is inconsistent

3 with the provisions of this title or a regulation promul4 gated pursuant to this title.’’.

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