HSB 179 (LSB 2542YC (4) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON YOUNG)

A BILL FOR

An Act relating to applications for a motor vehicle salvage certificate of title by an insurer without surrendering the certificate of title or manufacturer’s or importer’s statement of origin, and making penalties applicable.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.52, subsection 4, paragraph a, Code 2025, is amended to read as follows:
   a.  (1)  Notwithstanding any other provision of law to the contrary, an insurer may apply for and be issued a salvage certificate of title for a motor vehicle without surrendering the certificate of title or manufacturer’s or importer’s statement of origin properly assigned if ownership of the vehicle was transferred, or will transfer, to the insurer pursuant to a settlement with the previous owner of the vehicle arising from circumstances involving damage to the vehicle, and at least thirty days have expired since the effective date of such settlement. To obtain a salvage certificate of title pursuant to this paragraph “a”, the insurer shall submit an application for a salvage certificate of title to any county treasurer. The application shall must be accompanied by an one of the following:
   (a)  An affidavit from the insurer in which the insurer certifies it has made at least two written attempts to obtain a properly assigned certificate of title or manufacturer’s or importer’s statement of origin for the vehicle by contacting the previous owner of the vehicle and all lienholders of record by certified mail or a similar service that provides proof of service using a return receipt, and has been unable to obtain the title or statement of origin. The failure of a previous owner or lienholder to provide a properly assigned certificate of title or manufacturer’s or importer’s statement of origin shall be deemed to be a waiver by the previous owner or lienholder of all rights, title, claim, and interest in the vehicle. The
   (b)  If the motor vehicle is deemed a total loss, one or more supporting documents, including but not limited to a power of attorney as described in section 321.49, a duplicate certificate of title application submitted by the previous owner, or an odometer statement required under section 321.71, evidencing the transfer of ownership from the previous owner to the insurer. Such supporting documents do not require notarization and may be signed electronically. The insurer shall indemnify and hold harmless the department for any claims resulting from issuing a salvage certificate of title pursuant to this subparagraph division. For purposes of this subparagraph division, “total loss” means the estimated repair cost of the motor vehicle plus the projected salvage value of the vehicle meets or exceeds the cash value of the vehicle prior to the damage.
   (2)  An application shall made in accordance with subparagraph (1) must also be accompanied by the application fee required under paragraph “b”, and proof of payment of the total amount of the settlement by the insurer to the previous owner of the vehicle. Upon receiving an application that complies with this paragraph “a”, the county treasurer shall issue a salvage certificate of title to the insurer which shall be free and clear of all liens and claims of ownership and shall bear the word “SALVAGE” stamped or printed on the face of the title in a manner prescribed by the department.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Under current law, when a motor vehicle is sold or transferred, the vehicle’s certificate of title must be physically exchanged between the seller or transferor and the purchaser or transferee. Limited exceptions apply, including that an insurer is authorized to apply for and be issued a salvage certificate of title for a motor vehicle without surrendering the certificate of title or manufacturer’s or importer’s statement of origin properly assigned if (1) ownership of the vehicle was transferred, or will transfer, to the insurer pursuant to a settlement with the previous owner of the vehicle arising from circumstances involving damage to the vehicle, (2) at least 30 days have expired since the effective date of such settlement, and (3) the application is accompanied by an affidavit from the insurer in which the insurer certifies it has made at least two written attempts to obtain a properly assigned certificate of title or statement of origin for the vehicle by contacting the previous owner of the vehicle and all lienholders of record by certified mail or a similar service, and has been unable to obtain the title or statement of origin.
   This bill authorizes an insurer to instead submit one or more supporting documents described in the bill, evidencing the transfer of ownership from the previous owner to the insurer if the motor vehicle is deemed a total loss, as defined in the bill. Such supporting documents do not require notarization and may be signed electronically. The insurer is required to indemnify and hold harmless the department of transportation for any claims resulting from issuing a salvage certificate of title pursuant to the bill.
   In accordance with current law, an application with supporting documents must also be accompanied by a $20 application fee and proof of payment of the total amount of the settlement by the insurer to the previous owner of the vehicle. In addition, a surcharge of $5 is required pursuant to Code section 321.52A.
   A person who violates the title and registration requirements of Code section 321.52, including as amended by the bill, commits a simple misdemeanor punishable by a $135 scheduled fine.