House Study Bill 179 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON YOUNG) A BILL FOR An Act relating to applications for a motor vehicle salvage 1 certificate of title by an insurer without surrendering 2 the certificate of title or manufacturer’s or importer’s 3 statement of origin, and making penalties applicable. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2542YC (4) 91 th/ns

H.F. _____ Section 1. Section 321.52, subsection 4, paragraph a, Code 1 2025, is amended to read as follows: 2 a. (1) Notwithstanding any other provision of law to the 3 contrary, an insurer may apply for and be issued a salvage 4 certificate of title for a motor vehicle without surrendering 5 the certificate of title or manufacturer’s or importer’s 6 statement of origin properly assigned if ownership of the 7 vehicle was transferred, or will transfer, to the insurer 8 pursuant to a settlement with the previous owner of the vehicle 9 arising from circumstances involving damage to the vehicle, 10 and at least thirty days have expired since the effective date 11 of such settlement. To obtain a salvage certificate of title 12 pursuant to this paragraph “a” , the insurer shall submit an 13 application for a salvage certificate of title to any county 14 treasurer. The application shall must be accompanied by an one 15 of the following: 16 (a) An affidavit from the insurer in which the insurer 17 certifies it has made at least two written attempts to obtain 18 a properly assigned certificate of title or manufacturer’s or 19 importer’s statement of origin for the vehicle by contacting 20 the previous owner of the vehicle and all lienholders of 21 record by certified mail or a similar service that provides 22 proof of service using a return receipt, and has been unable 23 to obtain the title or statement of origin. The failure of a 24 previous owner or lienholder to provide a properly assigned 25 certificate of title or manufacturer’s or importer’s statement 26 of origin shall be deemed to be a waiver by the previous owner 27 or lienholder of all rights, title, claim, and interest in the 28 vehicle. The 29 (b) If the motor vehicle is deemed a total loss, one or 30 more supporting documents, including but not limited to a 31 power of attorney as described in section 321.49, a duplicate 32 certificate of title application submitted by the previous 33 owner, or an odometer statement required under section 321.71, 34 evidencing the transfer of ownership from the previous owner 35 -1- LSB 2542YC (4) 91 th/ns 1/ 3

H.F. _____ to the insurer. Such supporting documents do not require 1 notarization and may be signed electronically. The insurer 2 shall indemnify and hold harmless the department for any 3 claims resulting from issuing a salvage certificate of title 4 pursuant to this subparagraph division. For purposes of this 5 subparagraph division, “total loss” means the estimated repair 6 cost of the motor vehicle plus the projected salvage value of 7 the vehicle meets or exceeds the cash value of the vehicle 8 prior to the damage. 9 (2) An application shall made in accordance with 10 subparagraph (1) must also be accompanied by the application 11 fee required under paragraph “b” , and proof of payment of the 12 total amount of the settlement by the insurer to the previous 13 owner of the vehicle. Upon receiving an application that 14 complies with this paragraph “a” , the county treasurer shall 15 issue a salvage certificate of title to the insurer which shall 16 be free and clear of all liens and claims of ownership and 17 shall bear the word “SALVAGE” stamped or printed on the face of 18 the title in a manner prescribed by the department. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 Under current law, when a motor vehicle is sold or 23 transferred, the vehicle’s certificate of title must be 24 physically exchanged between the seller or transferor and 25 the purchaser or transferee. Limited exceptions apply, 26 including that an insurer is authorized to apply for and be 27 issued a salvage certificate of title for a motor vehicle 28 without surrendering the certificate of title or manufacturer’s 29 or importer’s statement of origin properly assigned if (1) 30 ownership of the vehicle was transferred, or will transfer, to 31 the insurer pursuant to a settlement with the previous owner of 32 the vehicle arising from circumstances involving damage to the 33 vehicle, (2) at least 30 days have expired since the effective 34 date of such settlement, and (3) the application is accompanied 35 -2- LSB 2542YC (4) 91 th/ns 2/ 3

H.F. _____ by an affidavit from the insurer in which the insurer certifies 1 it has made at least two written attempts to obtain a properly 2 assigned certificate of title or statement of origin for the 3 vehicle by contacting the previous owner of the vehicle and all 4 lienholders of record by certified mail or a similar service, 5 and has been unable to obtain the title or statement of origin. 6 This bill authorizes an insurer to instead submit one or 7 more supporting documents described in the bill, evidencing the 8 transfer of ownership from the previous owner to the insurer 9 if the motor vehicle is deemed a total loss, as defined in the 10 bill. Such supporting documents do not require notarization 11 and may be signed electronically. The insurer is required to 12 indemnify and hold harmless the department of transportation 13 for any claims resulting from issuing a salvage certificate of 14 title pursuant to the bill. 15 In accordance with current law, an application with 16 supporting documents must also be accompanied by a $20 17 application fee and proof of payment of the total amount of the 18 settlement by the insurer to the previous owner of the vehicle. 19 In addition, a surcharge of $5 is required pursuant to Code 20 section 321.52A. 21 A person who violates the title and registration 22 requirements of Code section 321.52, including as amended by 23 the bill, commits a simple misdemeanor punishable by a $135 24 scheduled fine. 25 -3- LSB 2542YC (4) 91 th/ns 3/ 3