SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘National Salvage
Motor Vehicle Consumer Protection Act of 1997’’.
SEC. 2. MOTOR VEHICLE TITLING AND DISCLOSURE RE-
QUIREMENTS.
(a) AMENDMENT
TO TITLE 49, UNITED STATES
CODE.—Subtitle VI of title 49, United States Code, is
amended by inserting a new chapter at the end:
‘‘CHAPTER 333—AUTOMOBILE SAFETY
AND TITLE DISCLOSURE REQUIREMENTS
‘‘Sec.
‘‘33301. Definitions.
‘‘33302. Passenger motor vehicle titling.
‘‘33303. Disclosure and label requirements on transfer of rebuilt salvage vehi-
cles.
‘‘33304. Report on funding.
‘‘33305. Effect on State law.
‘‘33306. Civil and criminal penalties.
‘‘33307. Actions by States.
‘‘§ 33301. Definitions
‘‘(a) DEFINITIONS.—For the purposes of this chap-
ter:
‘‘(1) PASSENGER MOTOR VEHICLE.—The term
‘passenger motor vehicle’ shall have the same mean-
ing given such term by section 32101(10), except,
notwithstanding section 32101(9), it shall include a
multipurpose passenger vehicle (constructed on a
truck chassis or with special features for occasional
off-road operation), or a truck, other than a truck
referred to in section 32101(10)(B), when that vehi-
cle or truck is rated by the manufacturer of such ve-
hicle or truck at not more than 10,000 pounds gross
vehicle weight, and except further, it shall only in-
clude a vehicle manufactured primarily for use on
public streets, roads, and highways.
‘‘(2) SALVAGE VEHICLE.—The term ‘salvage ve-
hicle’ means any passenger motor vehicle, other than
a flood vehicle or a nonrepairable vehicle, which—
‘‘(A) is a late model vehicle which has been
wrecked, destroyed, or damaged, to the extent
that the total cost of repairs to rebuild or re-
construct the passenger motor vehicle to its
condition immediately before it was wrecked,
destroyed, or damaged, and for legal operation
on the roads or highways, exceeds 80 percent of
the retail value of the passenger motor vehicle;
‘‘(B) is a late model vehicle which has been
wrecked, destroyed, or damaged, and to which
an insurance company acquires ownership pur-
suant to a damage settlement (except in the
case of a settlement in connection with a recov-
ered stolen vehicle, unless such vehicle sus-
tained damage sufficient to meet the damage
threshold prescribed by subparagraph (A)); or
‘‘(C) the owner wishes to voluntarily des-
ignate as a salvage vehicle by obtaining a sal-
vage title, without regard to the level of dam-
age, age, or value of such vehicle or any other
factor, except that such designation by the
owner shall not impose on the insurer of the
passenger motor vehicle or on an insurer proc-
essing a claim made by or on behalf of the
owner of the passenger motor vehicle any obli-
gation or liability.
‘‘(3) SALVAGE TITLE.—The term ‘salvage title’
means a passenger motor vehicle ownership docu-
ment issued by the State to the owner of a salvage
vehicle. A salvage title shall be conspicuously labeled
with the word ‘salvage’ across the front.
‘‘(4) REBUILT SALVAGE VEHICLE.—The term
‘rebuilt salvage vehicle’ means—
‘‘(A) any passenger motor vehicle which
was previously issued a salvage title, has passed
State anti-theft inspection, has been issued a
certificate indicating that the passenger motor
vehicle has passed the required anti-theft in-
spection, has passed the State safety inspection
in those States requiring a safety inspection
pursuant to section 33302(b)(8), has been is-
sued a certificate indicating that the passenger
motor vehicle has passed the required safety in-
spection in those States requiring such a safety
inspection pursuant to section 33302(b)(8), and
has a decal stating ‘Rebuilt Salvage Vehicle—
Anti-theft and Safety Inspections Passed’ af-
fixed to the driver’s door jamb; or
‘‘(B) any passenger motor vehicle which
was previously issued a salvage title, has passed
a State anti-theft inspection, has been issued a
certificate indicating that the passenger motor
vehicle has passed the required anti-theft in-
spection, and has, affixed to the driver’s door
jamb, a decal stating ‘Rebuilt Salvage Vehicle—
Anti-theft Inspection Passed/No Safety Inspec-
tion Pursuant to National Criteria’ in those
States not requiring a safety inspection pursu-
ant to section 33302(b)(8).
‘‘(5) REBUILT SALVAGE TITLE.—The term ‘re-
built salvage title’ means the passenger motor vehi-
cle ownership document issued by the State to the
owner of a rebuilt salvage vehicle. A rebuilt salvage
title shall be conspicuously labeled either with the
words ‘Rebuilt Salvage Vehicle—Anti-theft and
Safety Inspections Passed’ or ‘Rebuilt Salvage Vehi-
cle—Anti-theft Inspection Passed/No Safety Inspec-
tion Pursuant to National Criteria,’ as appropriate,
across the front.
‘‘(6) NONREPAIRABLE
VEHICLE.—The term
‘nonrepairable vehicle’ means any passenger motor
vehicle, other than a flood vehicle, which is incapable
of safe operation for use on roads or highways and
which has no resale value except as a source of parts
or scrap only or which the owner irreversibly des-
ignates as a source of parts or scrap. Such pas-
senger motor vehicle shall be issued a nonrepairable
vehicle certificate and shall never again be titled or
registered.
‘‘(7) 
NONREPAIRABLE
VEHICLE
CERTIFI-
CATE.—The term ‘nonrepairable vehicle certificate’
means a passenger motor vehicle ownership docu-
ment issued by the State to the owner of a non-
repairable vehicle. A nonrepairable vehicle certificate
shall be conspicuously labeled with the word ‘Non-
repairable’ across the front.
‘‘(8) SECRETARY.—The term ‘Secretary’ means
the Secretary of Transportation.
‘‘(9) LATE MODEL VEHICLE.—The term ‘Late
Model Vehicle’ means any passenger motor vehicle
which—
‘‘(A) has a manufacturer’s model year des-
ignation of or later than the year in which the
vehicle was wrecked, destroyed, or damaged, or
any of the six preceding years; or
‘‘(B) has a retail value of more than
$7,500.
The Secretary shall adjust such retail value on an
annual basis in accordance with changes in the
consumer price index.
‘‘(10) RETAIL VALUE.—The term ‘retail value’
means the actual cash value, fair market value, or
retail value of a passenger motor vehicle as—
‘‘(A) set forth in a current edition of any
nationally recognized compilation (to include
automated databases) of retail values; or
‘‘(B) determined pursuant to a market sur-
vey of comparable vehicles with regard to condi-
tion and equipment.
‘‘(11) COST OF REPAIRS.—The term ‘cost of re-
pairs’ means the estimated retail cost of parts need-
ed to repair the vehicle or, if the vehicle has been
repaired, the actual retail cost of the parts used in
the repair, and the cost of labor computed by using
the hourly labor rate and time allocations that are
reasonable and customary in the automobile repair
industry in the community where the repairs are to
be performed.
‘‘(12) FLOOD VEHICLE.—The term ‘flood vehi-
cle’ means any passenger motor vehicle that—
‘‘(A) has been acquired by an insurance
company as part of a damage settlement due to
water damage; or
‘‘(B) has been submerged in water to the
point that rising water has reached over the
door sill, has entered the passenger or trunk
compartment, and has exposed any electrical,
computerized, or mechanical component to
water, except—
‘‘(i) where a passenger motor vehicle
which, pursuant to an inspection conducted
by an insurance adjuster or estimator, a
motor vehicle repairer or motor vehicle
dealer in accordance with inspection guide-
lines or procedures established by the Sec-
retary or the State, is determined to have
no electrical, computerized or mechanical
components which were damaged by water;
or
‘‘(ii) where a passenger motor vehicle
which, pursuant to an inspection conducted
by an insurance adjuster or estimator, a
motor vehicle repairer or motor vehicle
dealer in accordance with inspection guide-
lines or procedures established by the Sec-
retary or the State, is determined to have
one or more electrical, computerized or me-
chanical components which were damaged
by water and where all such damaged com-
ponents have been repaired or replaced.
Disclosure that a vehicle is a flood vehicle must be
made at the time of transfer of ownership and the
brand ‘Flood’ shall be conspicuously marked on all
subsequent titles for the vehicle. No inspection shall
be required unless the owner or insurer of the pas-
senger motor vehicle is seeking to avoid a brand of
‘Flood’ pursuant to subparagraph (B). Disclosing a
passenger motor vehicle’s status as a flood vehicle or
conducting an inspection pursuant to subparagraph
(B) shall not impose on any person any liability for
damage to (except in the case of damage caused by
the inspector at the time of the inspection) or re-
duced value of a passenger motor vehicle.
‘‘(b) CONSTRUCTION.—The definitions set forth in
subsection (a) shall only apply to vehicles in a State which
are wrecked, destroyed, or otherwise damaged on or after
the date on which such State complies with the require-
ments of this chapter and the rule promulgated pursuant
to section 33302(b).
‘‘§ 33302. Passenger motor vehicle titling
‘‘(a) CARRY-FORWARD
OF
INFORMATION
ON
A
NEWLY ISSUED TITLE WHERE THE PREVIOUS TITLE FOR
THE VEHICLE WAS NOT ISSUED PURSUANT TO NEW NA-
TIONALLY UNIFORM STANDARDS.—For any passenger
motor vehicle, the ownership of which is transferred on
or after the date that is 1 year from the date of the enact-
ment of this chapter, each State receiving funds, either
directly or indirectly, appropriated under section 30503(c)
of this title after fiscal year 1998, in licensing such vehicle
for use, shall disclose in writing on the certificate of title
whenever records readily accessible to the State indicate
that the passenger motor vehicle was previously issued a
title that bore any word or symbol signifying that the vehi-
cle was ‘salvage’, ‘unrebuildable’, ‘parts only’, ‘scrap’,
‘junk’, ‘nonrepairable’, ‘reconstructed’, ‘rebuilt’, or any
other symbol or word of like kind, or that it has been dam-
aged by flood.
‘‘(b) NATIONALLY UNIFORM TITLE STANDARDS AND
CONTROL METHODS.—Not later than 18 months after the
date of the enactment of this chapter, the Secretary shall
by rule require each State receiving funds, either directly
or indirectly, appropriated under section 30503(c) of this
title after fiscal year 1998, in licensing any passenger
motor vehicle where ownership of such passenger motor
vehicle is transferred more than 2 years after publication
of such final rule, to apply uniform standards, procedures,
and methods for the issuance and control of titles for
motor vehicles and for information to be contained on such
titles. Such titling standards, control procedures, methods,
and information shall include the following requirements:
‘‘(1) A State shall conspicuously indicate on the
face of the title or certificate for a passenger motor
vehicle, as applicable, if the passenger motor vehicle
is a salvage vehicle, a nonrepairable vehicle, a rebuilt
salvage vehicle, or a flood vehicle.
‘‘(2) Such information concerning a passenger
motor vehicle’s status shall be conveyed on any sub-
sequent title, including a duplicate or replacement
title, for the passenger motor vehicle issued by the
original titling State or any other State.
‘‘(3) The title documents, the certificates, and
decals required by section 33301(4), and the issuing
system shall meet security standards minimizing the
opportunities for fraud.
‘‘(4) The certificate of title shall include the
passenger motor vehicle make, model, body type,
year, odometer disclosure, and vehicle identification
number.
‘‘(5) The title documents shall maintain a uni-
form layout, to be established in consultation with
the States or an organization representing them.
‘‘(6) A passenger motor vehicle designated as
nonrepairable shall be issued a nonrepairable vehicle
certificate and shall not be retitled.
‘‘(7) No rebuilt salvage title shall be issued to
a salvage vehicle unless, after the salvage vehicle is
repaired or rebuilt, it complies with the requirements
for a rebuilt salvage vehicle pursuant to section
33301(4). Any State inspection program operating
under this paragraph shall be subject to continuing
review by and approval of the Secretary. Any such
anti-theft inspection program shall include the fol-
lowing:
‘‘(A) A requirement that the owner of any
passenger motor vehicle submitting such vehicle
for an anti-theft inspection provide a completed
document identifying the vehicle’s damage prior
to being repaired, a list of replacement parts
used to repair the vehicle, and proof of owner-
ship of such replacement parts, as may be evi-
denced by bills of sale, invoices, or, if such doc-
uments are not available, other proof of owner-
ship for the replacement parts. The owner shall
also include an affirmation that the information
in the declaration is complete and accurate and
that, to the knowledge of the declarant, no sto-
len parts were used during the rebuilding.
‘‘(B) A requirement to inspect the pas-
senger motor vehicle or any major part or any
major replacement part required to be marked
under section 33102 for signs of such mark or
vehicle identification number being illegally al-
tered, defaced, or falsified. Any such passenger
motor vehicle or any such part having a mark
or vehicle identification number that has been
illegally altered, defaced, or falsified, and that
cannot be identified as having been legally ob-
tained (through bills of sale, invoices, or other
ownership documentation), shall be contraband
and subject to seizure. The Secretary, in con-
sultation with the Attorney General, shall, as
part of the rule required by this section, estab-
lish procedures for dealing with those parts
whose mark or vehicle identification number is
normally removed during industry accepted re-
manufacturing or rebuilding practices, which
parts shall be deemed identified for purposes of
this section if they bear a conspicuous mark of
a type, and applied in such a manner, as des-
ignated by the Secretary, indicating that they
have been rebuilt or remanufactured. With re-
spect to any vehicle part, the Secretary’s rule,
as required by this section, shall acknowledge
that a mark or vehicle identification number on
such part may be legally removed or altered as
provided for in section 511 of title 18, United
States Code, and shall direct inspectors to
adopt such procedures as may be necessary to
prevent the seizure of a part from which the
mark or vehicle identification number has been
legally removed or altered.
‘‘(8) Any safety inspection for a rebuilt salvage
vehicle performed pursuant to this chapter shall be
performed in accordance with nationally uniform
safety inspection criteria established by the Sec-
retary. A State may determine whether to conduct
such safety inspection itself, contract with one or
more third parties, or permit self-inspection by a
person licensed by such State in an automotive-relat-
ed business, all subject to criteria promulgated by
the Secretary hereunder. Any State inspection pro-
gram operating under this paragraph shall be sub-
ject to continuing review by and approval of the Sec-
retary. A State requiring such safety inspection may
require the payment of a fee for the privilege of such
inspection or the processing thereof.
‘‘(9) No duplicate or replacement title shall be
issued unless the word ‘duplicate’ is clearly marked
on the face thereof and unless the procedures for
such issuance are substantially consistent with Rec-
ommendation three of the Motor Vehicle Titling,
Registration and Salvage Advisory Committee.
‘‘(10) A State shall employ the following titling
and control methods:
‘‘(A) If an insurance company is not in-
volved in a damage settlement involving a sal-
vage vehicle or a nonrepairable vehicle, the pas-
senger motor vehicle owner shall apply for a
salvage title or nonrepairable vehicle certificate,
whichever is applicable, before the passenger
motor vehicle is repaired or the ownership of
the passenger motor vehicle is transferred, but
in any event within 30 days after the passenger
motor vehicle is damaged.
‘‘(B) If an insurance company, pursuant to
a damage settlement, acquires ownership of a
passenger motor vehicle that has incurred dam-
age requiring the vehicle to be titled as a sal-
vage vehicle or nonrepairable vehicle, the insur-
ance company or salvage facility or other agent
on its behalf shall apply for a salvage title or
nonrepairable vehicle certificate within 30 days
after the title is properly assigned by the owner
to the insurance company and delivered to the
insurance company or salvage facility or other
agent on its behalf with all liens released.
‘‘(C) If an insurance company does not as-
sume ownership of an insured’s or claimant’s
passenger motor vehicle that has incurred dam-
age requiring the vehicle to be titled as a sal-
vage vehicle or nonrepairable vehicle, the insur-
ance company shall notify the owner of the
owner’s obligation to apply for a salvage title or
nonrepairable vehicle certificate for the pas-
senger motor vehicle and notify the State pas-
senger motor vehicle titling office that a salvage
title or nonrepairable vehicle certificate should
be issued for the vehicle, except to the extent
such notification is prohibited by State insur-
ance law.
‘‘(D) If a leased passenger motor vehicle
incurs damage requiring the vehicle to be titled
as a salvage vehicle or nonrepairable vehicle,
the lessor shall apply for a salvage title or non-
repairable vehicle certificate within 21 days
after being notified by the lessee that the vehi-
cle has been so damaged, except when an insur-
ance company, pursuant to a damage settle-
ment, acquires ownership of the vehicle. The
lessee of such vehicle shall inform the lessor
that the leased vehicle has been so damaged
within 30 days after the occurrence of the dam-
age.
‘‘(E) Any person acquiring ownership of a
damaged passenger motor vehicle that meets
the definition of a salvage or nonrepairable ve-
hicle for which a salvage title or nonrepairable
vehicle certificate has not been issued, shall
apply for a salvage title or nonrepairable vehicle
certificate, whichever is applicable. This appli-
cation shall be made before the vehicle is fur-
ther transferred, but in any event, within 30
days after ownership is acquired. The require-
ments of this subparagraph shall not apply to
any scrap metal processor which acquires a pas-
senger motor vehicle for the sole purpose of
processing it into prepared grades of scrap and
which so processes such vehicle.
‘‘(F) State records shall note when a non-
repairable vehicle certificate is issued. No State
shall issue a nonrepairable vehicle certificate
after 2 transfers of ownership.
‘‘(G) When a passenger motor vehicle has
been flattened, baled, or shredded, whichever
comes first, the title or nonrepairable vehicle
certificate for the vehicle shall be surrendered
to the State within 30 days. If the second
transferee on a nonrepairable vehicle certificate
is unequipped to flatten, bale, or shred the vehi-
cle, such transferee shall, at the time of final
disposal of the vehicle, use the services of a pro-
fessional automotive recycler or professional
scrap processor who is hereby authorized to
flatten, bale, or shred the vehicle and to effect
the surrender of the nonrepairable vehicle cer-
tificate to the State on behalf of such second
transferee. State records shall be updated to in-
dicate the destruction of such vehicle and no
further ownership transactions for the vehicle
will be permitted. If different than the State of
origin of the title or nonrepairable vehicle cer-
tificate, the State of surrender shall notify the
State of origin of the surrender of the title or
nonrepairable vehicle certificate and of the de-
struction of such vehicle.
‘‘(H) When a salvage title is issued, the
State records shall so note. No State shall per-
mit the retitling for registration purposes or is-
suance of a rebuilt salvage title for a passenger
motor vehicle with a salvage title without a cer-
tificate of inspection, which complies with the
security and guideline standards established by
the Secretary pursuant to paragraphs (3), (7),
and (8), as applicable, indicating that the vehi-
cle has passed the inspections required by the
State. This subparagraph does not preclude the
issuance of a new salvage title for a salvage ve-
hicle after a transfer of ownership.
‘‘(I) After a passenger motor vehicle titled
with a salvage title has passed the inspections
required by the State, the inspection official will
affix the secure decal required pursuant to sec-
tion 33301(4) to the driver’s door jamb of the
vehicle and issue to the owner of the vehicle a
certificate indicating that the passenger motor