SSB 1139 (LSB 2241XC (5) 87)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON KAPUCIAN)

A BILL FOR

An Act relating to record retention and reporting by licensed vehicle recyclers, demolishers, salvage and junk yards, and the department of transportation’s authorized data consolidator, establishing fees, and providing penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.1, Code 2017, is amended by adding the following new subsections:
   NEW SUBSECTION.  5A.  “Authorized data consolidator” means the third party approved by the United States department of justice to act as a third party data consolidator for the national motor vehicle title information system that has contracted with the department to act as the department’s authorized data consolidator for the administration of section 321.52B.
   NEW SUBSECTION.  44A.  “National motor vehicle title information system” means as defined in section 321H.2.
    Sec. 2.  Section 321.45, subsection 2, paragraph a, subparagraph (5), Code 2017, is amended to read as follows:
   (5)  The vehicle is disposed of pursuant to section 321.52, subsection 2, paragraph “b”, subparagraph (2).
    Sec. 3.  Section 321.52, subsection 2, paragraph a, Code 2017, is amended to read as follows:
   a.  The Except as provided in paragraph “b”, the purchaser or transferee of a motor vehicle subject to registration for which a certificate of title is issued which is sold for scrap or junk shall surrender the certificate of title, properly endorsed and signed by the previous owner, to the county treasurer of the county of residence of the transferee, and shall apply for a junking certificate from the county treasurer, within thirty days after assignment of the certificate of title, except when the vehicle is disposed of pursuant to paragraph “b”. The county treasurer shall issue to such person without fee a junking certificate. A junking certificate shall authorize the holder to possess, transport, or transfer by endorsement the ownership of the junked vehicle. A certificate of title shall not again be issued for the vehicle subsequent to the issuance of a junking certificate except as provided in subsection 3. The county treasurer shall cancel the record of the vehicle. The junking certificate shall be printed on the registration receipt form and shall be imprinted with the words “junking certificate”, as prescribed by the department. A space for transfer by endorsement shall be on the junking certificate. A separate form for the notation of the transfer of component parts shall be attached to the junking certificate when the certificate is issued.
    Sec. 4.  Section 321.52, subsection 2, paragraph b, Code 2017, is amended by striking the paragraph and inserting in lieu thereof the following:
   b.  (1)  If a motor vehicle with a salvage certificate of title, rebuilt certificate of title, or junking certificate is sold for scrap or junk to a vehicle recycler licensed under chapter 321H, the vehicle recycler shall obtain the vehicle’s certificate of title or junking certificate, properly endorsed and signed by the previous owner, and the seller’s unique number issued to the seller through the national motor vehicle title information system, or if the seller has not been issued such a number, a copy of the seller’s driver’s license or nonoperator’s identification card, and within two business days shall report the purchase of the vehicle to the authorized data consolidator.
   (2)  If a motor vehicle without a certificate of title or junking certificate is sold for scrap or junk to a vehicle recycler licensed under chapter 321H, and the vehicle is twelve model years old or older and is acquired by the vehicle recycler for reasonable consideration equaling less than one thousand dollars, the vehicle recycler and the seller shall complete a derelict affidavit form created by the department. The vehicle recycler shall retain the form along with the seller’s unique number issued to the seller through the national motor vehicle title information system, or if the seller has not been issued such a number, a copy of the seller’s driver’s license or nonoperator’s identification card, and within two business days shall report the purchase of the vehicle to the authorized data consolidator.
   (3)  When the department receives information through the authorized data consolidator that a motor vehicle has been purchased by a vehicle recycler in a manner described in this paragraph “b”, the department shall designate the electronic record of the vehicle’s certificate of title as “JUNKED” and shall cancel the record of the vehicle. A certificate of title shall not again be issued for the vehicle subsequent to the department designating the vehicle as “JUNKED” and cancelling the record of the vehicle.
    Sec. 5.  Section 321.52, subsection 4, paragraph a, Code 2017, is amended to read as follows:
   a.  A vehicle rebuilder or a person engaged in the business of buying, selling, or exchanging vehicles of a type required to be registered in this state, upon acquisition of a wrecked or salvage vehicle, shall surrender the certificate of title or manufacturer’s or importer’s statement of origin properly assigned, together with an application for a salvage certificate of title, to the county treasurer of the county of residence of the purchaser or transferee within thirty days after the date of assignment of the certificate of title for the wrecked or salvage motor vehicle.  If the vehicle rebuilder or person acquiring the vehicle is subject to the requirements of 28 C.F.R. §25.56, the vehicle rebuilder or person shall obtain the seller’s unique number issued to the seller through the national motor vehicle title information system, or if the seller has not been issued such a number, a copy of the seller’s driver’s license or nonoperator’s identification card, and within two business days shall report the purchase of the vehicle to the authorized data consolidator. This subsection applies only to vehicles with a fair market value of five hundred dollars or more, based on the value before the vehicle became wrecked or salvage. Upon payment of a fee of ten dollars, the county treasurer shall issue a salvage certificate of title which shall bear the word “SALVAGE” stamped or printed on the face of the title in a manner prescribed by the department. A salvage certificate of title may be assigned to an educational institution, a new motor vehicle dealer licensed under chapter 322, a person engaged in the business of purchasing bodies, parts of bodies, frames or component parts of vehicles for sale as scrap metal, a salvage pool, or an authorized vehicle recycler licensed under chapter 321H. An authorized vehicle recycler licensed under chapter 321H or a new motor vehicle dealer licensed under chapter 322 may assign or reassign an Iowa salvage certificate of title or a salvage certificate of title from another state to any person, and the provisions of section 321.24, subsection 5, requiring issuance of an Iowa salvage certificate of title shall not apply. A vehicle on which ownership has transferred to an insurer of the vehicle as a result of a settlement with the owner of the vehicle arising out of damage to, or unrecovered theft of, the vehicle shall be deemed to be a wrecked or salvage vehicle and the insurer shall comply with this subsection to obtain a salvage certificate of title within thirty days after the date of assignment of the certificate of title of the vehicle.
    Sec. 6.  NEW SECTION.  321.52B  Authorized data consolidator —— record retention —— national motor vehicle title information system.
   1.  The department shall contract with a third party to act as the department’s authorized data consolidator for the administration of this section. The department shall follow the competitive bidding procedures as provided in chapter 8A, subchapter III. The third party shall be approved by the United States department of justice to act as a third party data consolidator for the national motor vehicle title information system. The third party may charge a fee for any service provided pursuant to this section to any nongovernmental entity or person not seeking such services on behalf of a governmental entity.
   2.  A person subject to the requirements of 28 C.F.R. §25.56 that sells a motor vehicle with a salvage certificate of title or junking certificate shall retain for three years after the sale of the vehicle an electronic record of all of the following:
   a.  The vehicle’s make, model, model year, vehicle identification number, and, if available, current odometer reading.
   b.  The name and address of the purchaser.
   c.  The purchaser’s unique number issued to the purchaser through the national motor vehicle title information system, or if the purchaser has not been issued such a number, the purchaser’s driver’s license or nonoperator’s identification card number.
   3.  A person required to retain information under subsection 2 shall report the information retained to the authorized data consolidator within seven business days after the date on which the sale of the vehicle occurred.
   4.  Within two business days after the date on which the authorized data consolidator receives information pursuant to subsection 3 or section 321.52 or 321H.4A, the authorized data consolidator shall report the information to the department and to the national motor vehicle title information system. The authorized data consolidator shall also verify whether the vehicle purchased or sold is designated as an active stolen vehicle in the federal bureau of investigation’s national crime information center database. If the vehicle is so designated, the authorized data consolidator shall notify the department and the person or entity who submitted the information relating to the purchase or sale of the vehicle.
   5.  a.  Except as provided in this section, the authorized data consolidator shall not release or make available any personal information received under this section, including but not limited to a person’s name, address, and driver’s license or nonoperator’s identification card number.
   b.  The authorized data consolidator shall make any information received under this section available to the department or any law enforcement agency without cost and upon request, provided the person requesting the information on behalf of the department or a law enforcement agency is acting within the scope of the person’s duties.
   c.  The authorized data consolidator shall make available the make, model, model year, vehicle identification number, and, if available, current odometer reading of any vehicle to a person or entity approved by the department to receive such information from the authorized data consolidator.
   6.  The authorized data consolidator shall retain for five years all of the following information about the sale or purchase of a motor vehicle:
   a.  A copy of the vehicle’s certificate of title, junking certificate, or derelict affidavit form, as applicable.
   b.  The vehicle’s make, model, model year, vehicle identification number, and, if available, current odometer reading.
   c.  The name and address of the purchaser and the seller.
   d.  The purchaser’s and seller’s unique numbers issued to the purchaser and seller through the national motor vehicle title information system, or if the purchaser or seller has not been issued such a number, the purchaser’s or seller’s driver’s license or nonoperator’s identification card number.
   7.  The department shall impose a civil penalty in the amount of one thousand dollars per transaction on a person or on the authorized data consolidator for a violation of this section.
    Sec. 7.  Section 321.67, Code 2017, is amended to read as follows:
   321.67  Certificate of title must be executed.
   1.  No person, except as provided in sections 321.23 and 321.45, and section 321.52, subsection 2, paragraph “b”, subparagraph (2), shall sell or otherwise dispose of a registered vehicle or a vehicle subject to registration without delivering to the purchaser or transferee thereof a certificate of title with such assignment thereon as may be necessary to show title in the purchaser.
   2.  No person shall purchase or otherwise acquire or bring into this state a registered vehicle or a vehicle subject to registration without obtaining a certificate of title thereto except for temporary use or as provided in sections 321.23 and 321.45, and section 321.52, subsection 2, paragraph “b”, subparagraph (2).
    Sec. 8.  Section 321.89, subsection 4, paragraph a, Code 2017, is amended to read as follows:
   a.  If an abandoned vehicle has not been reclaimed as provided for in subsection 3, the police authority or private entity shall make a determination as to whether or not the vehicle shall be sold for use upon the highways. If the vehicle is not sold for use upon the highways, it shall be sold for junk, or demolished and sold as scrap. The police authority or private entity shall sell the vehicle at public auction. Notwithstanding any other provision of this section, a police authority or private entity may dispose of the vehicle to a demolisher for junk without public auction after complying with the notification procedures in subsection 3. The purchaser of the vehicle takes title free and clear of all liens and claims of ownership, shall receive a sales receipt from the police authority or private entity, and is entitled to register the vehicle and receive a certificate of title if sold for use upon the highways. If the vehicle is sold or disposed of to a demolisher for junk, the demolisher shall make application for a junking certificate to the county treasurer within thirty days of purchase or follow the procedures set forth in section 321.52, subsection 2, paragraph “b”, and shall surrender the sales receipt in lieu of the certificate of title.
    Sec. 9.  Section 321.90, subsection 3, Code 2017, is amended to read as follows:
   3.  Duties of demolishers.
   a.  Any demolisher who purchases or otherwise acquires an abandoned motor vehicle for junk under the provisions of this section shall junk, scrap, wreck, dismantle, or demolish such motor vehicle. A demolisher shall not junk, scrap, wreck, dismantle, or demolish a vehicle until the demolisher has obtained the junking certificate issued for the vehicle or has followed the procedures set forth in section 321.52, subsection 2, paragraph “b”.
   b.  A demolisher shall keep an accurate and complete record of all motor vehicles purchased or received by the demolisher in the course of the demolisher’s business. These records shall contain the name and address of the person from whom each motor vehicle was purchased or received and the date when the purchases or receipts occurred. The records shall be open for inspection by any police authority at any time during normal business hours. Any record required by this section shall be kept by the demolisher for at least one year after the transaction to which it applies comply with the record retention and reporting requirements applicable to licensed vehicle recyclers set forth in sections 321.52, 321.52B, and 321H.4A.
    Sec. 10.  Section 321.104, subsection 4, Code 2017, is amended to read as follows:
   4.  To sell, offer for sale, or transfer a motor vehicle, trailer, or semitrailer, except as provided in section 321.47 or 321.48, or section 321.52, subsection 2, paragraph “b”, subparagraph (2), without obtaining a certificate of title in the name of the seller or transferor or without delivering to the purchaser or transferee a certificate of title or a manufacturer’s or importer’s certificate duly assigned to the purchaser or transferee as provided in this chapter.
    Sec. 11.  Section 321H.4, subsection 2, paragraph a, Code 2017, is amended to read as follows:
   a.  Application for a license as an authorized vehicle recycler shall be made to the department on forms provided by the department. The application shall be accompanied by a fee of seventy two hundred dollars for a two-year period or part thereof and proof of registration with the national motor vehicle title information system. The license shall be approved or disapproved within thirty days after application for the license. A license expires on December 31 of even-numbered years. A licensee shall have the month of expiration and the month after the month of expiration to renew the license. A person who fails to renew a license by the end of this time period and desires to hold a license shall file a new license application and pay the required fee. A separate license shall be obtained for each county in which an applicant conducts operations.
    Sec. 12.  Section 321H.4A, subsection 2, Code 2017, is amended to read as follows:
   2.  a.  Except as provided in paragraph “b”, for For any vehicle subject to registration under chapter 321 purchased by a vehicle recycler licensed under this chapter and subject to the requirements of 28 C.F.R. §25.56, the vehicle recycler shall comply with the reporting requirements of 28 C.F.R. §25.56 by reporting the required information to the authorized data consolidator, as defined in section 321.1, within two business days of purchasing the vehicle. Records of the vehicle recycler’s compliance shall be kept by the vehicle recycler for at least three years after the purchase of the vehicle, and shall be open for inspection by any peace officer during normal business hours. The department shall adopt rules to implement this section, including but not limited to rules requiring the submission and retention of records not required by 28 C.F.R. §25.56.
   b.  Paragraph “a” does not apply to a vehicle that has been crushed or flattened by mechanical means in such a way that it no longer resembles the vehicle described by the certificate of title if the vehicle recycler who purchased the vehicle verifies that the seller of the vehicle has met the requirements of paragraph “a”. The department shall adopt rules relating to the form of the verification, and the manner in which the verification shall be retained.
    Sec. 13.  Section 321H.4A, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  Upon receipt of a notification pursuant to section 321.52B, subsection 4, that a motor vehicle purchased by the vehicle recycler is designated as an active stolen vehicle in the federal bureau of investigation’s national crime information center database, the vehicle recycler shall notify the vehicle recycler’s local law enforcement agency and secure the vehicle until the vehicle is removed by a law enforcement agency, returned to the rightful owner, or the designation in the national crime information center database has been removed.
    Sec. 14.  Section 321H.7, Code 2017, is amended to read as follows:
   321H.7  Fees.
   All fees of whatever character accruing from the administration of this chapter shall be accounted for and paid by the department into the state treasury monthly and shall be credited to the road use tax fund, except that one hundred thirty dollars of each license fee collected pursuant to section 321H.4 shall be retained by the department and allocated for the administration of section 321.52B.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill requires the department of transportation (DOT) to contract with a third party to act as the DOT’s authorized data consolidator using the current procedures for competitive bidding. The third party must be approved by the United States department of justice to act as a third party data consolidator for the national motor vehicle title information system (NMVTIS). The bill permits the third party to charge a fee for any service provided under the bill to any nongovernmental entity or person not seeking such services on behalf of a governmental entity.
   The bill requires a person subject to federal NMVTIS reporting requirements who sells a motor vehicle with a salvage certificate of title or junking certificate to retain certain information regarding the sale for three years after the sale of the vehicle and to report the information to the authorized data consolidator within seven business days after the date on which the sale of the vehicle occurred. 
   Upon receiving the information, the bill requires the authorized data consolidator to report the information received to the DOT and to NMVTIS within two business days after the date on which the authorized data consolidator receives the information. The bill requires the authorized data consolidator to also verify whether the vehicle purchased or sold is designated as an active stolen vehicle in the federal bureau of investigation’s national crime information center database. If the vehicle is so designated, the authorized data consolidator must notify the DOT and the person or entity who submitted the information relating to the purchase or sale of the vehicle. The bill requires the authorized data consolidator to retain the information received for five years.
   The bill prohibits the authorized data consolidator from releasing or making available any personal information received under the bill. However, the authorized data consolidator must make any information received available to the DOT or any law enforcement agency without cost and upon request. The bill permits the authorized data consolidator to make available the make, model, model year, vehicle identification number, and, if available, current odometer reading of any vehicle to a person or entity approved by the DOT.
   The bill provides that the DOT shall impose a civil penalty in the amount of $1,000 per transaction on a person or on the authorized data consolidator for a violation of these provisions of the bill.
   Under current law, the purchaser or transferee of a vehicle sold for scrap or junk is required to obtain the vehicle’s certificate of title and apply for and be issued a junking certificate. However, the owner of a vehicle that does not have a certificate of title or a junking certificate may dispose of the vehicle to a licensed vehicle recycler for scrap or junk if the vehicle is 12 model years old or older and is acquired by the vehicle recycler for reasonable consideration equaling less than $1,000. 
   The bill provides an additional exception to that provision and alters the existing exception. If a vehicle with a salvage certificate of title, rebuilt certificate of title, or junking certificate is sold for scrap or junk to a licensed vehicle recycler, the vehicle recycler is required to obtain the vehicle’s certificate of title or junking certificate, properly endorsed and signed by the previous owner, and the seller’s unique number issued to the seller through NMVTIS, or if the seller has not been issued such a number, a copy of the seller’s driver’s license or nonoperator’s identification card, and report within two business days the purchase of the vehicle to the authorized data consolidator. If a vehicle without a certificate of title or junking certificate is sold for scrap or junk to a licensed vehicle recycler, and the vehicle is 12 model years old or older and is acquired by the vehicle recycler for reasonable consideration equaling less than $1,000, the vehicle recycler and the seller must complete a derelict affidavit form. The vehicle recycler is required to retain the form along with the seller’s unique number issued to the seller through NMVTIS, or if the seller has not been issued such a number, a copy of the seller’s driver’s license or nonoperator’s identification card, and report within two business days the purchase of the vehicle to the authorized data consolidator. The bill applies these provisions to vehicle demolishers that purchase abandoned vehicles. Under current law, such demolishers are licensed vehicle recyclers.
   When the DOT receives information through the authorized data consolidator that a vehicle has been purchased by a vehicle recycler in this manner, the DOT must designate the electronic record of the vehicle’s certificate of title as “JUNKED” and cancel the record of the vehicle. A certificate of title shall not again be issued for the vehicle afer the DOT designates the vehicle as “JUNKED” and cancels the record of the vehicle.
   The bill further requires a vehicle rebuilder or person acquiring a vehicle who is subject to federal NMVTIS reporting requirements to obtain the seller’s unique number issued to the seller through NMVTIS, or if the seller has not been issued such a number, a copy of the seller’s driver’s license or nonoperator’s identification card, and to report within two business days the purchase of the vehicle to the authorized data consolidator.
   The bill increases the biannual fee for a vehicle recycler license from $70 to $200, and provides that $130 of each license fee shall be used by the DOT to administer the provisions of the bill relating to the authorized data consolidator. The bill requires licensed vehicle recyclers to make required NMVTIS reports to the authorized data consolidator, and eliminates the existing exception for seller-reported purchases. A vehicle recycler who is notified that a vehicle purchased by the vehicle recycler is designated as an active stolen vehicle must notify the vehicle recycler’s local law enforcement agency and secure the vehicle until the vehicle is removed by a law enforcement agency, returned to the rightful owner, or the designation has been removed. By operation of law, a violation of these provisions is a simple misdemeanor punishable by a fine of not less than $250 nor more than $1,500 or by imprisonment not to exceed 30 days.