House File 563 - Introduced HOUSE FILE 563 BY COMMITTEE ON TRANSPORTATION (SUCCESSOR TO HF 482) (COMPANION TO LSB 2328HV BY COMMITTEE ON TRANSPORTATION) A BILL FOR An Act relating to vehicle recyclers, including the transfer 1 of motor vehicles to vehicle recyclers and compliance 2 with the national motor vehicle title information system, 3 making penalties applicable, and including effective date 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2328HV (2) 86 ns/nh

H.F. 563 Section 1. Section 321.45, subsection 2, paragraph a, Code 1 2015, is amended by adding the following new subparagraph: 2 NEW SUBPARAGRAPH . (5) The vehicle is disposed of pursuant 3 to section 321.52, subsection 2, paragraph “b” . 4 Sec. 2. Section 321.46, subsection 1, Code 2015, is amended 5 to read as follows: 6 1. The transferee shall, within thirty calendar days after 7 purchase or transfer, apply for and obtain from the county 8 treasurer of the person’s residence, or if a nonresident, the 9 county treasurer of the county where the primary users of the 10 vehicle are located or the county where all other vehicles 11 owned by the nonresident are registered, or in the case of a 12 mobile home or manufactured home, the county treasurer of the 13 county where the mobile home or manufactured home is located, 14 or if a firm, association, or corporation with vehicles in 15 multiple counties, the transferee may apply for and obtain 16 from the county treasurer of the county where the primary 17 user of the vehicle is located, a new registration and a new 18 certificate of title for the vehicle except as provided in 19 section 321.25 , 321.48 , or 322G.12 , or when the transferee 20 obtains the vehicle pursuant to section 321.52, subsection 21 2, paragraph “b” . The transferee shall present with the 22 application the certificate of title endorsed and assigned by 23 the previous owner and shall indicate the name of the county 24 in which the vehicle was last registered and the registration 25 expiration date. 26 Sec. 3. Section 321.52, subsection 2, Code 2015, is amended 27 to read as follows: 28 2. a. The purchaser or transferee of a motor vehicle 29 subject to registration for which a certificate of title is 30 issued which is sold for scrap or junk shall surrender the 31 certificate of title, properly endorsed and signed by the 32 previous owner, to the county treasurer of the county of 33 residence of the transferee, and shall apply for a junking 34 certificate from the county treasurer, within thirty days after 35 -1- LSB 2328HV (2) 86 ns/nh 1/ 7

H.F. 563 assignment of the certificate of title , except when the vehicle 1 is disposed of pursuant to paragraph “b” . The county treasurer 2 shall issue to such person without fee a junking certificate. 3 A junking certificate shall authorize the holder to possess, 4 transport, or transfer by endorsement the ownership of the 5 junked vehicle. A certificate of title shall not again be 6 issued for the vehicle subsequent to the issuance of a junking 7 certificate except as provided in subsection 3 . The county 8 treasurer shall cancel the record of the vehicle. The junking 9 certificate shall be printed on the registration receipt form 10 and shall be imprinted with the words “junking certificate”, 11 as prescribed by the department. A space for transfer by 12 endorsement shall be on the junking certificate. A separate 13 form for the notation of the transfer of component parts shall 14 be attached to the junking certificate when the certificate is 15 issued. 16 b. The owner of a motor vehicle subject to registration that 17 does not have a certificate of title or a junking certificate 18 may dispose of the vehicle to a vehicle recycler licensed under 19 chapter 321H for scrap or junk if the vehicle is twelve model 20 years old or older and has a fair market value of less than one 21 thousand dollars. 22 Sec. 4. Section 321.52, subsection 3, paragraph a, Code 23 2015, is amended to read as follows: 24 a. When a vehicle for which a certificate of title is issued 25 is junked or dismantled by the owner, the owner shall detach 26 the registration plates and surrender the plates to the county 27 treasurer, unless the plates are properly assigned to another 28 vehicle. The owner shall also surrender the certificate of 29 title to the county treasurer except when the vehicle is 30 disposed of pursuant to subsection 2, paragraph “b” . 31 Sec. 5. Section 321.67, Code 2015, is amended to read as 32 follows: 33 321.67 Certificate of title must be executed. 34 1. No person, except as provided in sections 321.23 and 35 -2- LSB 2328HV (2) 86 ns/nh 2/ 7

H.F. 563 321.45 , and section 321.52, subsection 2, paragraph “b” , shall 1 sell or otherwise dispose of a registered vehicle or a vehicle 2 subject to registration without delivering to the purchaser or 3 transferee thereof a certificate of title with such assignment 4 thereon as may be necessary to show title in the purchaser. 5 2. No person shall purchase or otherwise acquire or bring 6 into this state a registered vehicle or a vehicle subject to 7 registration without obtaining a certificate of title thereto 8 except for temporary use or as provided in sections 321.23 and 9 321.45 , and section 321.52, subsection 2, paragraph “b” . 10 Sec. 6. Section 321.104, subsection 4, Code 2015, is amended 11 to read as follows: 12 4. To sell, offer for sale, or transfer a motor vehicle, 13 trailer, or semitrailer, except as provided in section 321.47 14 or 321.48 , or section 321.52, subsection 2, paragraph “b” , 15 without obtaining a certificate of title in the name of the 16 seller or transferor or without delivering to the purchaser 17 or transferee a certificate of title or a manufacturer’s or 18 importer’s certificate duly assigned to the purchaser or 19 transferee as provided in this chapter . 20 Sec. 7. Section 321H.2, Code 2015, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 3A. “National motor vehicle title 23 information system” means the federally mandated motor vehicle 24 title history database maintained by the United States 25 department of justice that links the states’ motor vehicle 26 title records, including the department’s title records, and 27 that requires the reporting of junk and salvage motor vehicles 28 in order to ensure that states, law enforcement agencies, 29 insurers, and consumers have access to information that enables 30 the verification of a vehicle’s history, and the accuracy and 31 legality of a motor vehicle’s title, before a purchase or title 32 transfer occurs. 33 Sec. 8. Section 321H.4, subsection 2, paragraph a, Code 34 2015, is amended to read as follows: 35 -3- LSB 2328HV (2) 86 ns/nh 3/ 7

H.F. 563 a. Application for a license as an authorized vehicle 1 recycler shall be made to the department on forms provided by 2 the department. The application shall be accompanied by a 3 fee of seventy dollars for a two-year period or part thereof 4 and proof of registration with the national motor vehicle 5 title information system . The license shall be approved or 6 disapproved within thirty days after application for the 7 license. A license expires on December 31 of even-numbered 8 years. A licensee shall have the month of expiration and the 9 month after the month of expiration to renew the license. A 10 person who fails to renew a license by the end of this time 11 period and desires to hold a license shall file a new license 12 application and pay the required fee. A separate license shall 13 be obtained for each county in which an applicant conducts 14 operations. 15 Sec. 9. NEW SECTION . 321H.4A National motor vehicle title 16 information system. 17 1. A vehicle recycler licensed under this chapter and 18 subject to the requirements of 28 C.F.R. §25.56 shall register 19 with the national motor vehicle title information system. 20 2. a. Except as provided in paragraph “b” , for any vehicle 21 subject to registration under chapter 321 purchased by a 22 vehicle recycler licensed under this chapter and subject to the 23 requirements of 28 C.F.R. §25.56, the vehicle recycler shall 24 comply with the reporting requirements of 28 C.F.R. §25.56 25 within two business days of purchasing the vehicle. Records of 26 the vehicle recycler’s compliance shall be kept by the vehicle 27 recycler for at least three years after the purchase of the 28 vehicle, and shall be open for inspection by any peace officer 29 during normal business hours. The department shall adopt rules 30 to implement this section, including but not limited to rules 31 requiring the submission and retention of records not required 32 by 28 C.F.R. §25.56. 33 b. Paragraph “a” does not apply to a vehicle that has 34 been crushed or flattened by mechanical means in such a way 35 -4- LSB 2328HV (2) 86 ns/nh 4/ 7

H.F. 563 that it no longer resembles the vehicle described by the 1 certificate of title if the vehicle recycler who purchased the 2 vehicle verifies that the seller of the vehicle has met the 3 requirements of paragraph “a” . The department shall adopt rules 4 relating to the form of the verification, and the manner in 5 which the verification shall be retained. 6 Sec. 10. Section 321H.5, Code 2015, is amended to read as 7 follows: 8 321H.5 Display of license. 9 A license issued under the provisions of this chapter shall 10 specify the location of the principal place of business, the 11 location of each extension within the county of the principal 12 place of business and the , and the licensee’s registration 13 number for the national motor vehicle title information system. 14 The license shall be conspicuously displayed at the principal 15 place of business except during periods when the license is 16 surrendered for modifications. 17 Sec. 11. Section 321H.6, unnumbered paragraph 1, Code 2015, 18 is amended to read as follows: 19 The license of a person issued under the provisions of 20 this chapter may be denied, revoked, or suspended , and an 21 application for a license under this chapter may be denied, if 22 the department finds any of the following: 23 Sec. 12. Section 321H.6, Code 2015, is amended by adding the 24 following new subsection: 25 NEW SUBSECTION . 7. The licensee has failed to comply with 26 section 321H.4A or 28 C.F.R. §25.56. 27 Sec. 13. Section 321H.8, subsection 1, Code 2015, is amended 28 to read as follows: 29 1. a. A Except as provided in paragraph “b” , a person 30 convicted of violating a provision of this chapter is guilty of 31 a serious misdemeanor. 32 b. A person convicted of violating section 321H.4A, 33 subsection 2, paragraph “a” , for failing to comply with the 34 reporting requirements of 28 C.F.R. §25.56 within two business 35 -5- LSB 2328HV (2) 86 ns/nh 5/ 7

H.F. 563 days of purchasing a vehicle is guilty of a simple misdemeanor 1 punishable by a fine of not less than two hundred fifty 2 dollars nor more than one thousand five hundred dollars or by 3 imprisonment not to exceed thirty days. 4 Sec. 14. EFFECTIVE DATE. This Act takes effect January 1, 5 2016. 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 This bill relates to vehicle recyclers, including the 10 transfer of motor vehicles to vehicle recyclers and compliance 11 with the national motor vehicle title information system. 12 The bill provides that the owner of a motor vehicle that does 13 not have a certificate of title or a junking certificate may 14 dispose of the vehicle to a vehicle recycler licensed under 15 Code chapter 321H for scrap or junk if the vehicle is 12 model 16 years old or older and has a fair market value of less than 17 $1,000. The bill exempts vehicles disposed of this way from 18 certain title application, delivery, surrender, and transfer 19 requirements. 20 The bill defines “national motor vehicle title information 21 system” (NMVTIS) as the federally mandated motor vehicle title 22 history database maintained by the United States department of 23 justice that links the states’ motor vehicle title records, 24 including the department of transportation’s title records, and 25 that requires the reporting of junk and salvage motor vehicles 26 in order to ensure that states, law enforcement agencies, 27 insurers, and consumers have access to information that enables 28 the verification of a vehicle’s history, and the accuracy and 29 legality of a motor vehicle’s title, before a purchase or title 30 transfer occurs. 31 The bill requires applicants seeking to become an authorized 32 vehicle recycler to provide proof of registration with the 33 NMVTIS. In addition, the bill requires a vehicle recycler 34 license to state the licensee’s registration number for the 35 -6- LSB 2328HV (2) 86 ns/nh 6/ 7

H.F. 563 NMVTIS. 1 The bill requires a licensed vehicle recycler subject to 2 federal regulations relating to the NMVTIS to register with 3 the NMVTIS, and for any vehicle purchased by the vehicle 4 recycler, to comply with the federal reporting requirements 5 within two business days of purchasing the vehicle. Records 6 of the vehicle recycler’s compliance shall be kept by the 7 vehicle recycler for at least three years after the purchase 8 of the vehicle, and shall be open for inspection by any peace 9 officer during normal business hours. The bill provides that 10 the department of transportation shall adopt rules to implement 11 these provisions, including but not limited to rules requiring 12 the submission and retention of records not required by federal 13 regulations relating to the NMVTIS. These requirements do 14 not apply to a vehicle that has been crushed or flattened by 15 mechanical means in such a way that it no longer resembles the 16 vehicle described by the certificate of title if the vehicle 17 recycler who purchased the vehicle verifies that the seller of 18 the vehicle has met the requirements. The bill provides that 19 the department of transportation shall adopt rules relating 20 to the form of the verification, and the manner in which the 21 verification shall be retained. A violation for failing to 22 comply with the reporting requirements of the NMVTIS within two 23 business days of purchasing a vehicle is a simple misdemeanor 24 punishable by a fine of at least $250, but not more than 25 $1,500, or imprisonment not to exceed 30 days. A violation of 26 the remaining provisions is a serious misdemeanor punishable 27 by a fine of at least $315, but not more than $1,875, and 28 imprisonment not to exceed one year. 29 The bill provides that an authorized vehicle recycler 30 license, or an application for such a license, may be denied, 31 revoked, or suspended if the department of transportation finds 32 that the licensee has not complied with the provisions of the 33 bill or with federal regulations relating to the NMVTIS. 34 The bill takes effect January 1, 2016. 35 -7- LSB 2328HV (2) 86 ns/nh 7/ 7