I
103D CONGRESS
1ST SESSION
H. R. 3713
To amend the Motor Vehicle Information and Cost Savings Act to establish
certain safeguards for the protection of purchasers with respect to the
sale of motor vehicles that are salvage or have been damaged, to require
inspection of salvage vehicles that have been repaired in order to prevent
the sale of unsafe vehicles or vehicles with stolen parts, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 22, 1993
Mr. WHEAT introduced the following bill; which was referred to the Committee
on Energy and Commerce
A BILL
To amend the Motor Vehicle Information and Cost Savings
Act to establish certain safeguards for the protection
of purchasers with respect to the sale of motor vehicles
that are salvage or have been damaged, to require inspec-
tion of salvage vehicles that have been repaired in order
to prevent the sale of unsafe vehicles or vehicles with
stolen parts, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND REFERENCE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Salvage Vehicle Title Reform and Highway Safety Act’’.
(b) REFERENCE.—Whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Motor Vehicle Information and Cost Savings
Act.
SEC. 2. RESTRUCTURE.
Title IV (15 U.S.C. 1981–1991) is amended—
(1) by amending the title heading to read as
follows:
‘‘TITLE IV—ODOMETER AND DAMAGED
VEHICLE REQUIREMENTS’’,
(2) by inserting after the title heading the fol-
lowing:
‘‘PART A—FINDINGS AND PURPOSE AND DEFINITIONS’’
(3) by redesignating sections 403 through 408
as sections 405 through 410, respectively, by redes-
ignating sections 409 through 416 as sections 425
through 432, respectively, by repealing sections 419
and 420 and by redesignating sections 417 and 418
as sections 435 and 436, respectively.
(4) by inserting after section 402 the following:
‘‘PART B—ODOMETER REQUIREMENTS’’,
(5) by inserting after section 410 (as so redes-
ignated) the following:
‘‘PART C— SALVAGE AND DAMAGED VEHICLE
REQUIREMENTS’’,
(6) by inserting after section 420 (added by
section 5) the following:
‘‘PART D—ENFORCEMENT’’,
(7) by inserting after section 432 (as so redes-
ignated) the following:
‘‘PART E—MISCELLANEOUS’’, and
(8) in section 427(a)(2) (as so redesignated), by
striking out ‘‘409’’ and inserting in lieu thereof
‘‘425’’, in section 431 (as so redesignated), by strik-
ing out ‘‘414’’ each place it appears and inserting in
lieu thereof ‘‘430’’, and in section 432 (as so redes-
ignated), by striking out ‘‘414’’ and inserting in lieu
thereof ‘‘430’’.
SEC. 3. FINDINGS AND PURPOSE.
Section 401 (15 U.S.C. 1981) is amended—
(1) by striking out ‘‘The Congress’’ and insert-
ing in lieu thereof ‘‘(a)(1) For purposes of part B,
the Congress’’,
(2) by inserting after the first sentence the fol-
lowing:
‘‘(2) For purposes of part C, the Congress finds
that—
‘‘(A) the salvage and damage history of a motor
vehicle is important in assisting a purchaser to de-
termine its safety, value, and reliability;
‘‘(B) the rebuilding of salvage vehicles bears re-
semblance in principle to the manufacture of motor
vehicles and as such requires oversight to prevent
the sale and operation on the nation’s highways of
unsafe rebuilt motor vehicles;
‘‘(C) the switching of parts and vehicle identi-
fication numbers between salvage vehicles and stolen
motor vehicles is an important means of profitable
disposal of stolen motor vehicles; and
‘‘(D) purchasers of motor vehicles are entitled
to information with respect to the salvage and dam-
age history of motor vehicles.’’; and
(3) by amending the last sentence to read as
follows:
‘‘(b)(1) It is the purpose of part B to prohibit tam-
pering with odometers on motor vehicles and to establish
certain safeguards for the protection of purchasers with
respect to the sale of motor vehicles having altered or reset
odometers.
‘‘(2) It is the purpose of part C to establish certain
safeguards with respect to the sale of motor vehicles that
are salvage or have been damaged and to require inspec-
tion of salvage vehicles that have been repaired in order
to prevent the sale of unsafe vehicles or vehicles incor-
porating stolen parts.’’.
SEC. 4. DEFINITIONS.
Section 402 (15 U.S.C. 1982) is amended by adding
at the end the following:
‘‘(9) The term ‘motor vehicle’ means a motor
vehicle as defined in section 2(15) but it does not in-
clude—
‘‘(A) a motor vehicle that is more than 25
years old;
‘‘(B) a motor vehicle that is not self-pro-
pelled; or
‘‘(C) a motor vehicle sold directly by the
manufacturer to any agency of the United
States in conformity with contractual specifica-
tions for as long as the motor vehicle is owned
by the United States.
‘‘(10) The term ‘actual cost’ when used in con-
nection with motor vehicle repairs means the price
paid for repairs or the fair market value of the re-
pairs needed to return a motor vehicle to its
undamaged condition, whichever is greater.
‘‘(11) The term ‘salvage vehicle’ means a motor
vehicle that has been damaged and that meets or at
any time in the past has met either of the following
criteria:
‘‘(A) An insurance company has deter-
mined that it is economically impractical to re-
pair the damaged motor vehicle and has made
with respect to the motor vehicle an agreed set-
tlement with the insured or claimant.
‘‘(B) The estimated or the actual cost of
repairing the damaged motor vehicle, whichever
is greater, exceeds 65 percent of the fair mar-
ket value of the motor vehicle immediately be-
fore it was damaged.’’.
SEC. 5. DISCLOSURE REQUIREMENTS.
Title IV (15 U.S.C. 1981-1991) is amended by in-
serting after the heading for part C (as added by section
2(5)) the following:
‘‘SEC. 415. (a)(1) Not later than 180 days after the
date of the enactment of this part, the Secretary shall pre-
scribe rules requiring any transferor to give the following
written and notarized disclosure to the transferee in con-
nection with the transfer of ownership of a motor vehicle:
‘‘(A) Whether the motor vehicle is a salvage
vehicle.
‘‘(B) Whether the motor vehicle has on any oc-
casion during or before the time that it was owned
by the transferor suffered major damage.
‘‘(C) The nature and the amount of damage
sustained on each occasion referred to in subpara-
graph (B), the year the damage was sustained, and
the identity of the person who owned the motor vehi-
cle at the time of the damage.
‘‘(2) The rules under paragraph (1) shall prescribe
the manner in which the information shall be disclosed and
shall be retained and shall require that the original of the
disclosure shall be attached to the title of such motor vehi-
cle, except that if the title conforms to the requirements
of section 416(b), the disclosure shall be placed on the
title.
‘‘(3) The rules under paragraph (1) shall also provide
a definition of the term ‘major damage’. The Secretary
shall provide such definition after consultation with rep-
resentatives of law enforcement agencies, the States, in-
dustry, and consumers. In establishing such definition the
Secretary shall give priority to making the definition sim-
ple and readily understandable to ordinary consumers and
to ensuring coverage of damage that may significantly af-
fect the safety or value of a vehicle and shall give consider-
ation to the costs or the amount of effort required to pro-
vide disclosure of damage.
‘‘(b)(1) In the case of any leased motor vehicle, the
rules under subsection (a) shall require the lessee of the
motor vehicle to make the disclosure required by such
rules to the lessor of the motor vehicle before the lessor
transfers ownership of the leased motor vehicle.
‘‘(2) Under such rules the lessor of a leased motor
vehicle shall provide written notice to the lessee regard-
ing—
‘‘(A) such salvage and damage history disclo-
sure requirement, and
‘‘(B) the penalties for failure to comply with
such requirement.
‘‘(3) The lessor shall retain the disclosures made by
any lessee with respect to any motor vehicle under para-
graph (1) for a period of at least 4 years following the
date the lessor transfers ownership of such motor vehicle.
‘‘(4) If the lessor transfers ownership of any leased
motor vehicle without obtaining possession of such motor
vehicle, the lessor may, in making the disclosure required
by subsection (a), indicate the information disclosed by the
lessee under paragraph (1) unless the lessor has reason
to believe that such disclosure by the lessee does not re-
flect the actual salvage and damage history of the vehicle.
‘‘(c) No transferor, lessor, or lessee of a leased motor
vehicle shall violate any rule promulgated under subsection
(a) or give a false statement to a transferee or lessor, as
the case may be, in making any disclosure required by
such rule.
‘‘(d) No transferee who, for purposes of resale, ac-
quires ownership of a motor vehicle—
‘‘(1) shall fail to obtain, in connection with the
transfer, any written disclosure required to be given
to the transferee under the rules promulgated under
subsection (a), or
‘‘(2) shall accept any disclosure if such disclo-
sure is incomplete.
‘‘MOTOR VEHICLE SALES
‘‘SEC. 416. (a) A dealer or distributor who sells a
motor vehicle to a person who in good faith purchases the
motor vehicle for purposes other than resale shall—
‘‘(1) show the original or a copy of—
‘‘(A) the motor vehicle title, and
‘‘(B) any disclosure required to be made
with respect to such motor vehicle under section
415(a),
to the purchaser before the sale, and
‘‘(2) provide the title and such disclosures, in-
cluding copies of the title or such disclosure, to the
purchaser at the time of the sale.
‘‘(b) If any motor vehicle is sold at an auction, the
auction company which conducts such auction shall estab-
lish and maintain for a period of at least 4 years following
the date of such sale records showing whether any disclo-
sure made in accordance with section 415(a) indicates
whether the motor vehicle was salvage or had been
damaged.
‘‘TITLE REQUIREMENTS
‘‘SEC. 417. (a) Not later than 90 days after the date
of the enactment of this part, the Secretary shall prescribe
rules requiring that any motor vehicle the ownership of
which is transferred may not be licensed for use in any
State unless—
‘‘(1) the transferee in submitting an application
to a State for the title upon which such license will
be issued includes with such application both the ex-
isting title or manufacturer’s statement of origin
and any disclosure made by a transferor under sec-
tion 415(a) that has been delivered to the transferee,
and
‘‘(2) the title issued by the State to such trans-
feree following such transfer shows on its face in
conspicuous and plain wording—
‘‘(A) whether any ‘salvage’, ‘rebuilt’, ‘re-
constructed’, ‘flood damaged’, ‘junk’, or similar
label or indication was shown on the title sur-
rendered by the transferee to the State or on
any title previously issued for the motor vehicle;
‘‘(B) the substance of all such labels and
indications;
‘‘(C) the name of any State previously is-
suing a title for the motor vehicle showing such
a label or indication; and
‘‘(D) whether any disclosure pursuant to
section 415(a) or other documentation received
by such State has shown that the motor vehicle
is a salvage vehicle or has suffered damage as
described in section 415(a)(1)(B).
In determining whether any title was previously issued for
a motor vehicle with such label or indication as described
in subparagraph (A) or whether any disclosure or docu-
mentation as described in subparagraph (D) has been re-
ceived, a State shall make use of all information that is
both available to such State and retrievable without sub-
stantial labor or delay.
‘‘(b) Not later than 180 days after the date of the
enactment of this part, the Secretary shall prescribe rules
requiring that any motor vehicle, the ownership of which
is transferred after 21⁄2 years after the date of the enact-
ment of this part, may not be licensed for use in any State
unless the title which is issued by such State to the trans-
feree—
‘‘(1) indicates all disclosures required to be
made for such motor vehicle under section 415(a);
‘‘(2) contains a space for the transferee to pro-
vide such disclosures in the event of a future trans-
fer of ownership and for the transferee to sign and
date such disclosures before a notary; and
‘‘(3) contains on its face a written statement, in
addition to any statement required by subsection
(a)(2), reciting in conspicuous and plain wording the
substance of any disclosure under section 415(a)
that has been delivered to the State or passed on to
the State on the face of previous titles.
‘‘(c) The rule promulgated under subsection (b) shall
require each State—
‘‘(1) to maintain copies of—
‘‘(A) all motor vehicle titles and title appli-
cations, and
‘‘(B) all disclosures required to be made
under section 415(a) which are delivered to the
State,
as part of the title history for motor vehicles for a
period of at least 10 years from the date such docu-
ments are received, and
‘‘(2) to make a complete copy of the title his-
tory for any motor vehicle available, upon written re-
quest, within 21 days of the request for a fee to any
person who provides to the State the vehicle identi-
fication number of such motor vehicle.
The fee under paragraph (2) shall be a reasonable charge
but not more than the actual cost of making a copy of
a title history. A State may require a person requesting
a title history under paragraph (2) to certify that the title
history is requested for reasons related to the purposes
of this part.
‘‘SETTLEMENTS
‘‘SEC. 418. Whenever an insurance company makes
a settlement on a motor vehicle as a result of major dam-
age, the insurance company shall give notice to the motor
vehicle’s owner at the time of the settlement of the disclo-
sure requirements of section 415.
‘‘SALVAGE VEHICLES
‘‘SEC. 419. (a) Not later than 180 days after the date
of the enactment of this part, the Secretary shall prescribe
rules requiring that any salvage vehicle, the ownership of
which is transferred after one year after such date of en-
actment, may not be licensed for use in any State unless
after being repaired the salvage vehicle has been inspected,
by a person licensed by the State where the inspection is
performed under a program approved by the Secretary,
to check for safety defects and, beginning February 1,
1996, to check for stolen parts. Such rule shall provide—
‘‘(1) the minimum safety standards for repaired
salvage vehicles,
‘‘(2) the minimum steps and inquiry to be un-
dertaken during any such inspection,
‘‘(3) that such inspections shall be at the ex-
pense of the owners of the salvage vehicles,
‘‘(4) the manner in which information relating
to inspections shall be retained,
‘‘(5) the minimum requirements for any person
to be licensed as an inspector,
‘‘(6) the manner in which information relating
to licensing of inspectors shall be retained,
‘‘(7) that any program for inspection shall be
subject to the continuing review and approval of the
Secretary, and
‘‘(8) that any inspector licensed by any State
shall be subject to section 430(b) to the same extent
as a dealer or distributor.
‘‘(b) The fact that a motor vehicle has been inspected
under subsection (a) shall not be admissible as evidence
in any legal proceeding for the purpose of showing—
‘‘(1) that the motor vehicle was in fact safe or
did not contain stolen parts, or
‘‘(2) that any person reasonably believed that
the motor vehicle was safe or did not contain stolen
parts.
‘‘CONSPIRACY
‘‘SEC. 420. No person shall conspire with any other
person to violate section 415, 416, 417, 418, or 419.’’.
SEC. 6. CONFORMING AMENDMENTS.
(a) PRIVATE CIVIL ACTION.—Subsection (a) of sec-
tion 425 (as so redesignated) (15 U.S.C. 1989) is amend-
ed to read as follows:
‘‘(a) Any person who, with intent to defraud, violates
or participates in violating any requirement imposed under
part B or C shall be liable—
‘‘(1) jointly and severally with any other such
violator for actual damages sustained;
‘‘(2) separately and individually for twice the
actual damages, punitive damages, or $5,000, which-
ever is greater; and
‘‘(3) in the case of any successful action to en-
force the foregoing liability jointly and severally with
any other such attorney fees as determined by the
court.
The failure of a dealer, distributor, or lessor to exercise
reasonable care in confirming the accuracy of any disclo-
sure it receives or gives under section 410 or 415 shall
be prima facie evidence of an intent to defraud on claims
relating to a violation of the requirements of this part.’’.
(b) PREEMPTION.—Section 436 (as so redesignated)
(15 U.S.C. 1991) is amended by striking out ‘‘or’’ at the
end of paragraph (1), by redesignating paragraph (2) as
paragraph (3), and by inserting after paragraph (1) the
following:
‘‘(2) annul, alter, or affect the laws of any
State with respect to the disclosure of salvage or
damage history of a motor vehicle or with respect to
the inspection of a motor vehicle, or’’.
(c) TECHNICAL AMENDMENTS.—
(1) SECTION 410(b).—Subsection (b) of section
410 (as so redesignated) (15 U.S.C. 1988) is
amended—
(A) by striking ‘‘transferor’’ and inserting
‘‘transferor of a motor vehicle or lessor or lessee
of a leased motor vehicle’’; and
(B) by striking ‘‘to a transferee’’ and in-
serting ‘‘to a transferee or lessor, as the case
may be,’’.
(2) SECTION 410(c).—Subsection (c) of section
410 (as so redesignated) (15 U.S.C. 1988) is
amended—
(A) by striking ‘‘shall accept’’ and insert-
ing ‘‘shall fail to obtain, in connection with the
transfer,’’;
(B) by striking ‘‘required by’’ and insert-
ing ‘‘required to be given to the transferee
under’’;
(C) by striking ‘‘under this section’’ and
inserting ‘‘under subsection (a)’’; and
(D) by striking ‘‘if such disclosure’’ and in-
serting ‘‘or shall accept any disclosure if such
disclosure’’.
(3) SECTION 410(e).—Subsection (e) of section
410 (19 U.S.C. 1988) is amended—
(A) in paragraph (1), by striking ‘‘rules’’
and inserting ‘‘rules’’ and by striking ‘‘upon
the’’ and inserting ‘‘before the’’; and
(B) in paragraph (4), by striking ‘‘on the
title’’ and by striking ‘‘For purposes of this sec-
tion, if’’ and inserting ‘‘If’’.
Æ
HR 3713 IH——2