News in 2015

This legislative season, NMVTIS has been a very hot topic with more and more states actively using the NMVTIS system for verification, titling and daily record processing. Likewise, law enforcement is finding benefit in the data and using it more than ever. States like Georgia, Mississippi, North and South Carolina have already passed legislation that specifies more frequent reporting to NMVTIS than the 30 days required by federal law. In April state legislation has passed in Iowa requiring reporting to NMVTIS within 48hrs and other bills in Tennessee, Alabama, Illinois, Indiana and New Hampshire in process, with language related to NMVTIS, some including reporting requirements in a little as 24 hours.

Because of the new laws and states shortening their reporting timelines, any business that is required to report should, as a business practice, get in the habit of reporting to NMVTIS as quickly as possible (at the time of purchase or at least within 48 hours of purchase), rather than waiting 30 days from the time of purchase, as required by federal law. The quicker a report is made, the more useful the data is for the parties that need it, greatly reducing the likelihood of that vehicle being used for nefarious activities. If you know for sure at the time you report what the final disposition of a vehicle will be - meaning your business never resells a vehicle in a form that can be rebuilt or retitled - federal law allows you to report the vehicle to NMVTIS with an end-of-life disposition of “Scrap” or “Crush”(whichever fits your business practice best). If your business does or might ever resell or rebuild and resell vehicle as a whole vehicle that may be titled, the vehicle should be reported using a disposition of “Unknown/ To Be Determined” or blank. Then, when the vehicle is either sold or disposed and the final disposition is known, it should be reported as having been sold or crushed, respectively.

Now more than ever, it is very important that a business make sure their vehicles are reported accurately and in a timely manner to NMVTIS. Bills under consideration in Illinois (S.B.1641 and H.B.2503) address the use of NMVTIS for retitling, and many states such as Florida, South Carolina, Texas, and others already perform NMVTIS verifications before issuing new titles. What this means is that if a vehicle is reported to NMVTIS as crushed or scrapped in error or “by accident,” states may either refuse to retitle a vehicle or will issue titles with brands according the information in the NMVTIS history. Errors in reporting can cause headaches for recyclers, their customers, and other affected parties.

With the shortened reporting timeframes, many of the existing automatic reporting processes will not currently meet the new requirements. For example, the recently passed law in Iowa (H.F. 563), which has not yet been implemented requires businesses to report to NMVTIS within 48 hours of purchase and to maintain proof of reporting. Many automatic processes offered by popular management systems only process exports to NMVTIS once a week. Unless and until the software is updated, businesses could be subject to a $1,000 fine per vehicle for every record that isn’t reported within the 48-hour window. A Tennessee law currently being considered (SB 1098) has a reporting timeline of 24 hours, with a mandatory stolen check and a $1,000 per vehicle fine for non- compliance. Georgia salvage businesses must report within 48 hours of purchase through Auto Data Direct, Inc., the state-selected consolidated reporting provider. There is no charge for Georgia reporting for businesses physically located in Georgia, and those businesses can also use the Auto Data Direct system to cancel titles with the state at the time.

Here is a quick summary of what is going on state by state, and the effective dates for the new and proposed laws:

Alabama HB 458 & SB 370 - Reduces the amount of time from seven days to 48 hours that a vehicle may be left on a public road or private property without consent before it is deemed an unclaimed motor vehicle. Requires a person or entity in possession of an unclaimed motor vehicle to, upon reporting the motor vehicle as unclaimed to the Department, utilize the National Motor Vehicle Title Information System (NMVTIS) to determine the current title or registration state of the vehicle.

Provides that a person or entity who sells an abandoned motor vehicle at auction must include any associated NMVTIS records.

_Effective Date: July 1, 2016_

Iowa HF 563 - Stipulates that the owner of a vehicle that does not have a certificate of title or a junking certificate may dispose of the vehicle to a vehicle recycler licensed for scrap or junk if the vehicle is twelve model years old or older and was acquired by the vehicle recycler for reasonable consideration equaling less than $1,000.

Requires applicants seeking to become an authorized vehicle recycler to provide proof of registration with the NMVTIS.

Requires a licensed vehicle recycler to comply with the federal reporting requirements within 48 hours of purchasing the vehicle. Provides that 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.

Provides that a violation of these provisions is a serious misdemeanor punishable by a fine of at least $315, but not to exceed $1,875, and imprisonment not to exceed one year. Provides that an authorized vehicle recycler license, or an application for such a license, may be denied, revoked or suspended if the Department of Transportation finds that the licensee has not complied with the provisions of the bill or with federal regulations relating to the NMVTIS.

_Effective Date: January 1, 2016_

Illinois HB 2503 - Requires that applications for certificate of title for a motor vehicle shall be verified by the National Motor Vehicle Title Information System (NMVTIS) for a vehicle history report prior to the Secretary of State issuing a certificate of title or salvage certificate.

Provides that each application for a certificate of title or a salvage certificate for a motor vehicle that is verified by the NMVTIS that is returned with a warning or error shall be reviewed by the Secretary of State or his or her designee, as to whether the warning or error warrants a change to the type of title or brand that is issued to a motor vehicle.

States that any motor vehicle application for a certificate of title or a salvage certificate that is returned with a NMVTIS warning or error indicating a brand or label from another jurisdiction, that does not have a similar or comparable brand or label in this state, shall include a notation or brand on the certificate of title stating “previously branded”.

Provides that any motor vehicle that is subject to the federal Truth in Mileage Act and is returned with a NMVTIS warning or error indicating the stated mileage of the vehicle on the application for certificate of title is 1,500 or fewer miles less than a previously recorded mileage for the vehicle, shall be deemed as having an acceptable margin of error and the higher of the two figures shall be indicated on the new certificate of title, if the previous mileage was recorded within 90 days of the date of the current application for title and if there are no indications of fraud or malfeasance or of altering or tampering with the odometer.

States that if the Secretary of State needs supplemental information to verify or corroborate the information received from a NMVTIS report, then the Secretary may use any available commercial title history services or other Secretary of State resources to assist in determining the vehicle’s proper designation.

Provides that any motor vehicle application for a certificate of title or a salvage certificate that another state has previously issued a title or brand indicating that the status of the motor vehicle is equivalent to a junk vehicle shall receive a title with a “prior out of state junk” brand if that history item was issued 120 months or more before the date of the submission of the current application for title.

Provides that any motor vehicle application for a certificate of title or a salvage certificate that is returned with a NMVTIS warning or error indicating that another state has previously issued a title or brand indicating the status of the mot or vehicle is equivalent to a junk vehicle shall be issued a junk certificate that reflects the motor vehicle’s structural history, if the previously issued title or brand from another state was issued less than 120 months before the date of the submission of the current application for title.

_Effective date: July 1, 2015. _

Illinois SB 1641 - Allows the Secretary of State to use moneys in the NMVITS Trust Fund to pay for any expenses related to vehicle registration or titling.

_Effective Date: Immediately._

Indiana HB 1396 Requires a licensed automotive salvage recycler that buys vehicles to:

1. Report the purchase of a vehicle to the National Motor Vehicle Title Information System (NMVTIS) within 30 days after the vehicle is purchased.
2. Provide to the seller a valid NMVTIS report identification number.

_Effective Date: July 1, 2015_

New Hampshire HB 310 - Requires facilities where any motor vehicle is first crushed, shredded, baled, or sheared to submit to NMVTIS and to the Department of Safety within 30 days an electronic file containing information to identify the vehicle and provide contact information for all parties.

Requires the title to be assigned to the facility and submitted with any other documents to the Department. Stipulates that crushed, shredded, baled, or sheared shall be accompanied in transport with a copy of the NMVTIS report or some alternative proof of reporting.

_Effective Date: January 1, 2016_

Tennessee SB 1098 - States that any motor vehicle dismantler, or scrap metal processor, who purchases a motor vehicle for scrap or parts, shall submit to NMVTIS all information required within 24 hours, not counting weekends or legal holidays, of the close of business of the day the motor vehicle was received. Stipulates that failure to do so is a Class A misdemeanor punishable by a fine of $1,000.

Requires the Department of Revenue to verify within 24 hours of receipt of the information reported whether or not the motor vehicle reported has been reported stolen. Provides that the Department may develop a method to allow a person subject to this section to verify at the time of the transaction, through the use of the Internet, at no cost, that the vehicle has not been reported stolen, and that also allows for the Department’s response to be printed and retained by the person making the request.

_Effective Date: July 1, 2015_

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