House File 2444
HOUSE FILE
BY COMMITTEE ON TRANSPORTATION
(SUCCESSOR TO HSB 639)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to disclosure requirements for the transfer of
2 ownership of a motor vehicle and providing penalties.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 6098HV 80
5 dea/gg/14
PAG LIN
1 1 Section 1. Section 321.69, subsections 1, 2, 3, 4, 7, 8,
1 2 and 9, Code Supplement 2003, are amended to read as follows:
1 3 1. A certificate of title shall not be issued for a motor
1 4 vehicle unless a damage disclosure statement has been made by
1 5 the transferor of the vehicle and is furnished with the
1 6 application for certificate of title. A damage disclosure
1 7 statement must shall be provided by the transferor to the
1 8 transferee in a transfer of ownership of a motor vehicle. The
1 9 new certificate of title and registration receipt shall state
1 10 on the face of the title the total cumulative dollar amount of
1 11 damage reported by owners prior to the owner listed on the
1 12 front of the title whether a prior owner had disclosed that
1 13 the vehicle was damaged to the extent that it was a wrecked or
1 14 salvage vehicle as defined in section 321.52, subsection 4,
1 15 paragraph "d".
1 16 2. The damage disclosure statement required by this
1 17 section shall, at a minimum, state the total retail dollar
1 18 amount of all damage to the vehicle during the period of the
1 19 transferor's ownership of the vehicle and whether the
1 20 transferor knows if the vehicle was titled as a salvage,
1 21 rebuilt, or flood vehicle in this or any other state prior to
1 22 the transferor's ownership of the vehicle and, if not, whether
1 23 the transferor knows if the vehicle was damaged to the extent
1 24 that it was a wrecked or salvage vehicle as defined in section
1 25 321.52, subsection 4, paragraph "d", during or prior to the
1 26 transferor's ownership of the vehicle. For the purposes of
1 27 this section, "damage" refers to damage to the vehicle caused
1 28 by fire, vandalism, collision, weather, falling objects,
1 29 submersion in water, or flood, where the cost of repair is six
1 30 thousand dollars or more per incident, but does not include
1 31 normal wear and tear, glass damage, mechanical repairs or
1 32 electrical repairs that have not been caused by fire,
1 33 vandalism, collision, weather, falling objects, submersion in
1 34 water, or flood. "Damage" does not include the cost of
1 35 repairing, replacing, or reinstalling tires, lights,
2 1 batteries, windshields, windows, a sound system, or an
2 2 inflatable restraint system. A determination of the amount of
2 3 damage to a vehicle shall be based on estimates of the retail
2 4 cost of repairing the vehicle, including labor, parts, and
2 5 other materials, if the vehicle has not been repaired or on
2 6 the actual retail cost of repair, including labor, parts, and
2 7 other materials, if the vehicle has been repaired. Only
2 8 individual incidents in which the retail cost of repairs is
2 9 six thousand dollars or more are required to be disclosed by
2 10 this section. If the vehicle has incurred damage of six
2 11 thousand dollars or more per incident in more than one
2 12 incident, the damage amounts must be combined and disclosed as
2 13 the total of all separate incidents.
2 14 3. The damage disclosure statement shall be provided by
2 15 the transferor to the transferee at or before the time of
2 16 sale. However, if the transferor has a salvage certificate of
2 17 title for the vehicle, the transferor is not required to
2 18 disclose under this section the total retail cost of repairs
2 19 to the vehicle during the period of the transferor's ownership
2 20 of the vehicle. If the transferor is not a resident of this
2 21 state or if the transferee acquired the vehicle by operation
2 22 of law as provided in section 321.47, the transferee shall not
2 23 be required to submit a damage disclosure statement from the
2 24 transferor with the transferee's application for title unless
2 25 the state of the transferor's residence requires a damage
2 26 disclosure statement. However, the transferee shall submit a
2 27 damage disclosure statement with the transferee's application
2 28 for title indicating whether a salvage, or rebuilt, or flood
2 29 title had ever existed for the vehicle and, if not, whether
2 30 the vehicle had incurred prior damage of six thousand dollars
2 31 or more per incident, was damaged to the extent that it was a
2 32 wrecked or salvage vehicle as defined in section 321.52,
2 33 subsection 4, paragraph "d", during or prior to the
2 34 transferor's ownership of the vehicle and the year, make, and
2 35 vehicle identification number of the motor vehicle. The
3 1 transferee shall not be required to indicate whether the
3 2 vehicle had incurred prior damage of six thousand dollars or
3 3 more per incident was damaged to the extent that it was a
3 4 wrecked or salvage vehicle as defined in section 321.52,
3 5 subsection 4, paragraph "d", under this subsection if the
3 6 transferor's certificate of title is from another state and if
3 7 it indicates that the vehicle is salvaged and not rebuilt or
3 8 is another state's salvage certificate of title.
3 9 4. A lessee who has executed a lease as defined in section
3 10 321F.1 shall provide a damage disclosure statement to the
3 11 lessor at the termination of the lease. The damage disclosure
3 12 statement shall be made on a separate disclosure document and
3 13 shall state the total dollar amount of all damage to the
3 14 vehicle which occurred during the term of the lease whether
3 15 the vehicle was damaged during the term of the lease to the
3 16 extent that it was a wrecked or salvage vehicle as defined in
3 17 section 321.52, subsection 4, paragraph "d". The lessee's
3 18 damage disclosure statement shall not be submitted with the
3 19 application for title, but the lessor shall retain the
3 20 lessee's damage disclosure statement for five years following
3 21 the date of the statement.
3 22 7. The damage disclosure statements shall be made on the
3 23 back of the certificate of title if the title is available to
3 24 the transferor at the time of sale. If the title is not
3 25 available at the time of sale or if the face of the
3 26 transferor's Iowa title contains no indication that the
3 27 vehicle was previously salvaged or titled as salvaged or a
3 28 salvage, rebuilt, or flood vehicle and the transferor knows or
3 29 reasonably should know that the vehicle was previously
3 30 salvaged or titled as salvaged or a salvage, rebuilt, or flood
3 31 vehicle in another state, the transferor shall make the
3 32 disclosure on a separate disclosure document. The damage
3 33 disclosure statement forms shall be as approved by the
3 34 department. The treasurer shall not accept a damage
3 35 disclosure statement and issue a title unless the back of the
4 1 title or separate disclosure document has been fully completed
4 2 and signed and dated by the transferee and the transferor, if
4 3 applicable. If a separate damage disclosure document from a
4 4 prior owner is required to be furnished with the application
4 5 for title, the transferor must shall provide a copy of the
4 6 separate damage disclosure document to the transferee at or
4 7 before the time of sale.
4 8 In addition to the information required in subsection 2, a
4 9 separate disclosure document shall state whether the vehicle's
4 10 certificate of title indicates the existence of damage prior
4 11 to the period of the transferor's ownership of the vehicle,
4 12 and the amount of that damage if the transferor knows or
4 13 reasonably should know of the prior damage, and whether the
4 14 vehicle was titled as a salvage, rebuilt, or flood vehicle
4 15 during the period of the transferor's ownership of the
4 16 vehicle.
4 17 8. A person, authorized vehicle recycler licensed under
4 18 chapter 321H, or motor vehicle dealer licensed under chapter
4 19 322 shall not be liable to a subsequent owner, driver, or
4 20 passenger of a vehicle because a prior owner or lessee gave a
4 21 false or inaccurate damage disclosure statement or failed to
4 22 disclose that the vehicle had previously been damaged and
4 23 repaired or had been titled on a salvage, or rebuilt, or flood
4 24 certificate of title unless the person, recycler, or dealer
4 25 knew or reasonably should have known that the prior owner or
4 26 lessee gave a false or inaccurate damage disclosure statement
4 27 or failed to disclose that the vehicle had been damaged and
4 28 repaired or had been titled on a salvage, or rebuilt, or flood
4 29 certificate of title.
4 30 9. Except for subsection 10 subsections 10 and 11, this
4 31 section does not apply to motor trucks and truck tractors with
4 32 a gross vehicle weight rating of sixteen thousand pounds or
4 33 more, vehicles more than nine five model years old,
4 34 motorcycles, motorized bicycles, and special mobile equipment.
4 35 This section does apply to motor homes. The requirement in
5 1 subsection 1 that the new certificate of title and
5 2 registration receipt shall state on the face of the title the
5 3 total cumulative dollar amount of damage whether a prior owner
5 4 had disclosed that the vehicle was damaged to the extent that
5 5 it was a wrecked or salvage vehicle as defined in section
5 6 321.52, subsection 4, paragraph "d", does not apply to a
5 7 vehicle with a certificate of title bearing a designation that
5 8 the vehicle was previously titled on a salvage certificate of
5 9 title pursuant to section 321.52, subsection 4, paragraph "b",
5 10 or to a vehicle with a certificate of title bearing a
5 11 "REBUILT" or "SALVAGE" designation pursuant to section 321.24,
5 12 subsection 4 or 5. Except for subsection 10 subsections 10
5 13 and 11, this section does not apply to new motor vehicles with
5 14 a true mileage, as defined in section 321.71, of one thousand
5 15 miles or less, unless such vehicle has incurred damage as
5 16 defined in subsection 2.
5 17 EXPLANATION
5 18 This bill amends Code section 321.69 relating to disclosure
5 19 requirements for the transfer of ownership of a motor vehicle.
5 20 Current law requires that a transferor must disclose damage
5 21 resulting from a single accident for which the cost of repairs
5 22 is $6,000 or more, whether the damage was reported by prior
5 23 owners or sustained during the transferor's period of
5 24 ownership. The bill changes the amount of damage that must be
5 25 disclosed to match the standard for establishing a vehicle as
5 26 a wrecked or salvage vehicle, which is damage for which the
5 27 retail cost of repair exceeds 50 percent of the fair market
5 28 value of the vehicle before it became damaged. The current
5 29 requirement that a damage disclosure statement provide whether
5 30 the transferor knows if the vehicle was ever titled as a
5 31 salvage or flood vehicle is amended to include rebuilt titles.
5 32 A similar provision relating to vehicles transferred by
5 33 nonresidents is amended to require disclosure of a previous
5 34 flood title, in addition to salvage and rebuilt titles. The
5 35 bill also amends the requirement that a lessee make a damage
6 1 disclosure upon termination of a lease by changing the damage
6 2 standard for reporting to the wrecked or salvage vehicle
6 3 standard.
6 4 The bill retains the requirements that disclosures be made
6 5 prior to the time of sale of a vehicle and that they be in the
6 6 form of a statement on the face of the certificate of title or
6 7 on a separate disclosure document. The bill retains the
6 8 provision that licensed vehicle recyclers and motor vehicle
6 9 dealers are not liable to subsequent owners, drivers, or
6 10 passengers because of false or inaccurate damage disclosure
6 11 statements of prior owners or lessees, but the provision is
6 12 amended to include vehicles previously titled as flood
6 13 vehicles.
6 14 Disclosure requirements relating to nonoperative or missing
6 15 airbags apply for all motor vehicles except motor homes. The
6 16 bill makes a corrective amendment to provide that penalties
6 17 for airbag disclosure violations apply for all of these
6 18 vehicles as well. Under current law, vehicles more than nine
6 19 model years old are exempt from damage disclosure requirements
6 20 other than airbag disclosure requirements. The bill amends
6 21 the exemption by making it applicable to vehicles more than
6 22 five model years old.
6 23 Existing law provides that a person who knowingly makes a
6 24 false damage disclosure statement commits a fraudulent
6 25 practice. Otherwise, failure to comply with a duty imposed
6 26 under Code section 321.69 constitutes consumer fraud.
6 27 LSB 6098HV 80
6 28 dea/gg/14