H.F. _____ Section 1. Section 321.52, subsection 4, paragraphs b and e, 1 Code 2018, are amended to read as follows: 2 b. (1) A vehicle rebuilder or a person engaged in the 3 business of buying, selling, or exchanging vehicles of a type 4 required to be registered in this state, upon acquisition of 5 a wrecked or salvage vehicle, shall surrender the certificate 6 of title or manufacturer’s or importer’s statement of origin 7 properly assigned, together with an application for a salvage 8 certificate of title, to the county treasurer of the county of 9 residence of the purchaser or transferee within thirty days 10 after the date of assignment of the certificate of title for 11 the wrecked or salvage motor vehicle. This subsection applies 12 only to vehicles with a fair market value of five hundred 13 dollars or more, based on the value before the vehicle became 14 wrecked or salvage. Upon payment of a fee of ten dollars, the 15 county treasurer shall issue a salvage certificate of title 16 which shall bear the word “SALVAGE” stamped or printed on the 17 face of the title in a manner prescribed by the department. A 18 salvage certificate of title may be assigned to an educational 19 institution, a new motor vehicle dealer licensed under chapter 20 322 , a person engaged in the business of purchasing bodies, 21 parts of bodies, frames , or component parts of vehicles for 22 sale as scrap metal, a salvage pool, or an authorized vehicle 23 recycler licensed under chapter 321H . An authorized vehicle 24 recycler licensed under chapter 321H or a new motor vehicle 25 dealer licensed under chapter 322 may assign or reassign an 26 Iowa salvage certificate of title or a salvage certificate of 27 title from another state to any person, and the provisions of 28 section 321.24, subsection 5 , requiring issuance of an Iowa 29 salvage certificate of title shall not apply. 30 (2) A vehicle on which ownership has transferred to an 31 insurer of the vehicle as a result of a settlement with the 32 owner of the vehicle arising out of damage to, or unrecovered 33 theft of, the vehicle shall be deemed to be a wrecked or 34 salvage vehicle and the insurer shall comply with this 35 -1- LSB 5164YC (4) 87 ns/rh 1/ 4

H.F. _____ subsection to obtain a salvage certificate of title within 1 thirty days after the date of assignment of the certificate of 2 title of the vehicle. If the cost of repair of the vehicle does 3 not exceed seventy-five percent of the fair market value of the 4 vehicle as determined pursuant to paragraph “e” , the insurer’s 5 application for a salvage certificate of title shall contain a 6 statement in substantially the following form: 7 This vehicle has been acquired by an insurance company as a 8 result of a claim settlement and the cost to repair the vehicle 9 does not exceed seventy-five percent of the fair market value 10 of the vehicle prior to sustaining the damage for which the 11 claim was paid. 12 (3) A determination that the cost of repair of the vehicle 13 does not exceed seventy-five percent of the fair market value 14 of the vehicle as determined pursuant to paragraph “e” shall 15 not affect the right of an insurer or vehicle owner to make an 16 economic or safety-related decision not to repair the vehicle. 17 e. For purposes of this subsection , “wrecked or salvage 18 vehicle” means a damaged motor vehicle subject to registration 19 for which the cost of repair exceeds fifty seventy-five percent 20 of the fair market value of the vehicle, as determined in 21 accordance with rules adopted by the department, before it 22 the vehicle became damaged. The calculation of the cost of 23 repair shall not include costs associated with towing, storage, 24 vehicle rental, cosmetic damage repairs, or tax on labor and 25 materials used to repair the vehicle. For purposes of this 26 paragraph, “cosmetic damage repairs” means repairs done only for 27 the sake of appearance, including for decorative, ornamental, 28 or superficial purposes, that if left unrepaired would not 29 impact the functionality of the vehicle or render the vehicle 30 unsafe or unable to operate. “ Cosmetic damage repairs” includes 31 costs for vehicle refinishing materials and repairs relating 32 to external trim molding and fascia; molded, nonmetal bumper 33 covers; grilles; entertainment systems; audiovisual, telephone, 34 and mapping equipment; emblems, stripes, and decals; hubcaps 35 -2- LSB 5164YC (4) 87 ns/rh 2/ 4

H.F. _____ and wheel covers; interior carpet; upholstery other than for 1 the driver seat; and interior door trim panels. “Cosmetic 2 damage repairs” does not include the cost of labor other than 3 labor associated with vehicle refinishing, or the cost of any 4 repair necessary to pass a safety inspection required by law. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 Under current law, a vehicle on which ownership has 9 transferred to an insurer as a result of a settlement 10 with the owner of the vehicle arising out of damage to, or 11 unrecovered theft of, the vehicle is deemed to be a wrecked 12 or salvage vehicle and the insurer is required to obtain a 13 salvage certificate of title within 30 days after the date of 14 assignment of the certificate of title of the vehicle. This 15 bill provides that if the cost of repair of the vehicle does 16 not exceed 75 percent of the fair market value of the vehicle, 17 the insurer’s application for a salvage certificate of title 18 must contain a statement in substantially the following form: 19 “This vehicle has been acquired by an insurance company as a 20 result of a claim settlement and the cost to repair the vehicle 21 does not exceed seventy-five percent of the fair market value 22 of the vehicle prior to sustaining the damage for which the 23 claim was paid.” 24 The bill also provides that a determination that the cost of 25 repair of the vehicle does not exceed 75 percent of the fair 26 market value of the vehicle shall not affect the right of an 27 insurer or vehicle owner to make an economic or safety-related 28 decision not to repair the vehicle. 29 Under current law, a wrecked or salvage vehicle means a 30 damaged vehicle for which the cost of repair exceeds 50 percent 31 of the fair market value of the vehicle. The bill increases 32 the cost of repair threshold to 75 percent of the fair market 33 value of the vehicle and prohibits the calculation of the cost 34 of repair from including costs associated with towing, storage, 35 -3- LSB 5164YC (4) 87 ns/rh 3/ 4

H.F. _____ vehicle rental, cosmetic damage repairs, or tax on labor 1 and materials used to repair the vehicle. The bill defines 2 “cosmetic damage repairs” to mean repairs done only for the 3 sake of appearance, including for decorative, ornamental, or 4 superficial purposes, that if left unrepaired would not impact 5 the functionality of the vehicle or render the vehicle unsafe 6 or unable to operate. The bill specifies that “cosmetic damage 7 repairs” includes costs for vehicle refinishing materials 8 and repairs relating to external trim molding and fascia; 9 molded, nonmetal bumper covers; grilles; entertainment systems; 10 audiovisual, telephone, and mapping equipment; emblems, 11 stripes, and decals; hubcaps and wheel covers; interior carpet; 12 upholstery other than for the driver seat; and interior door 13 trim panels. The bill further specifies that “cosmetic damage 14 repairs” does not include the cost of labor other than labor 15 associated with vehicle refinishing or the cost of any repair 16 necessary to pass a safety inspection required by law. 17 Under current law, a violation of Code section 321.52 is 18 punishable by a scheduled fine of $100. 19 -4- LSB 5164YC (4) 87 ns/rh 4/ 4