BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 990
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: vargas
VERSION: 2/1/12
Analysis by: Carrie Cornwell FISCAL: yes
Hearing date: April 10, 2012
SUBJECT:
Vehicle history reports
DESCRIPTION:
This bill allows a car dealer when selling a used car to obtain
data from a commercial entity, rather than the federal
government, to provide required information to consumers on the
vehicle's title history.
ANALYSIS:
National Motor Vehicle Title Information Service (NMVTIS)
The Federal Anti-Car Theft Act of 1992 provided for the
establishment of a national information system to enable states
and others to access vehicle titling information. In 1996,
Congress reauthorized the act and gave U.S. Department of
Justice (US DOJ) responsibility for implementation and
development of the system, which is known as the National Motor
Vehicle Title Information Service (NMVTIS).
The federal government created NMVTIS to:
Prevent the introduction or reintroduction of stolen
vehicles into interstate commerce;
Protect states, consumers, and others from fraud;
Reduce the use of stolen vehicles for illicit purposes,
including fundraising for criminal enterprises; and
Provide consumer protection from unsafe vehicles,
including showing when a vehicle title has been branded in a
jurisdiction. (A "brand" is a descriptive label that states
assign to a vehicle to identify the vehicle's current or
prior condition, such as "junk," "salvage," or "flood.")
For a consumer to access NMVTIS information about a particular
vehicle's title and history, the consumer pays a small fee
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(typically $4 to $8) to one of several private companies that
provide access to NMVTIS records.
AB 1215 of 2011
Effective July 1 of this year, AB 1215 (Blumenfield), Chapter
329, Statutes of 2011, requires motor vehicle dealers, when
offering a used vehicle for sale, to obtain an NMVTIS report on
that vehicle. If the report indicates that the vehicle is a
junk automobile or a salvage automobile, that specified parties
have reported it as such, or that its title contains a brand,
then the dealer must affix to the vehicle a prescribed warning
to that effect in 14-point black font on a 4 inch by 5.5 inch
red background. The warning shall also advise the buyer that he
or she may get a copy of the NMVTIS report from the dealer or
obtain it independently and the NMVTIS web address at which to
obtain it. The dealer must make the NMVTIS report available to
the purchaser upon request prior to sale.
This bill :
1.States that rather than only an NMVTIS report, a car dealer
selling a used car may use a vehicle history report provided
by a "commercial data provider" to satisfy the information and
warning requirements of last year's AB 1215 and makes required
conforming changes.
2.Defines a "commercial data provider" as "a private entity that
provides vehicle history information and obtains data from all
50 states and the District of Columbia."
3.Amends the statutory language of the required warning to allow
for dealers to use a commercial data provider and inform car
buyers that they may obtain the vehicle history information by
"checking the online Internet Web site of a commercial data
provider." The warning, however, would not include the
specific web address of the commercial provider.
4.Provides that it does not create a legal duty upon a vehicle
dealer related to the accuracy, errors, or omissions of a
vehicle history report obtained from a commercial data
provider, as AB 1215 did for NMVTIS reports.
COMMENTS:
1.Purpose . The author introduced this bill at the request of
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CARFAX, a commercial provider of vehicle histories. He points
out that while NMVTIS is a U.S. government report administered
by the US DOJ that keeps track of car titles, it does not keep
track of detailed vehicle history as many
commercially-available options such as CARFAX or Experian's
Autocheck do. He believes that NMVTIS reports fall short on
providing important information about a vehicle including open
recalls, airbag deployment, and frame damage that are
necessary to protect California consumers, who may get a false
sense of security based on knowing that any used vehicle sold
by a dealer has been checked through NMVTIS.
2.Arguments in opposition . Opponents, including those
representing car dealers and car buyers, note that NMVTIS is a
federally mandated vehicle history database maintained by the
US DOJ to ensure that states, law enforcement agencies,
consumers, and dealers have access to vehicle titling,
branding, odometer, and other vehicle information. While they
note that third party commercial data providers, including
CARFAX, provide valuable information that is beneficial to
consumers and dealers, opponents note that those databases
contain information that is proprietary and not subject to
oversight by any governmental entity. Commercial providers
that acquire vehicle title information from entities other
than NMVTIS purchase their information on an ad hoc basis
through commercial contracts with certain states, repair
shops, and other entities. These contracts are not subject to
federal review, are subject to amendment, cancellation, or
expiration, and do not cover all entities required to report
information to NMVTIS. Under federal law, all states,
insurance companies, salvage and junkyards, and towing
companies are required to report total loss and salvaged
vehicles to NMVTIS.
3.What's in NMVTIS ? In addition to information received from
states, federal law requires all insurance carriers and
certain self insurers to report monthly to NMVTIS on the junk
and salvage automobiles they obtain. Further federal law
requires auto recyclers, junkyards, and salvage yards to
provide to NMVTIS every month specified information on each
vehicle they receive into inventory. From information thus
collected, NMVTIS's database serves as a repository of title
and brand history for automobiles. The database does not
contain detailed information regarding a vehicle's repair
history.
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4.What's in a CARFAX or Autocheck report ? Carfax, Experian, and
other commercial providers of vehicle history data collect
that information through contracts with numerous sources. For
example, CARFAX reports it "receives data from more than
34,000 different sources including every U.S. and Canadian
provincial motor vehicle agency, plus many police and fire
departments, collision repair facilities, auto auctions, and
more." From this, these commercial providers are often able
to collate a detailed history of the vehicle, including
whether it has been in any accidents, its repair and
maintenance history, and whether previous owners have
addressed any recalls on the vehicle. On the other hand, the
bill defines a "commercial data provider" simply as one that
provides vehicle histories and obtains information from all 50
states and the District of Columbia. As a result, there is no
guarantee that a report from a commercial data provider
authorized by this bill will provide anywhere near this level
of information.
5.A deal is a deal ? Last year, this committee provided a forum
for the proponents and opponents of AB 1215, as that bill
passed the Assembly, to negotiate a deal satisfactory to both
those representing vehicle sellers and vehicle buyers.
Consumer representatives expressed a strong desire to have the
vehicle title information available through NMVTIS disclosed
at the time of purchase of a used vehicle, rather than a more
comprehensive history of the vehicle culled from data
collected through private contracts. This bill undoes a
portion of that agreement and is, therefore, opposed by both
the proponents and opponents of AB 1215.
6.Double-referral . The Senate Rules Committee referred this bill
to both the Senate Transportation and Housing Committee and to
the Senate Judiciary Committee. Therefore, if this bill
passes this committee, it will be referred to Senate Committee
on Judiciary.
POSITIONS: (Communicated to the committee before noon on
Wednesday, April 4,
2012)
SUPPORT: CARFAX (sponsor)
African American Leadership Coalition of
Sacramento
Airbag Service
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California Black Chamber of Commerce
California Hispanic Chambers of Commerce
California State Conference of the NAACP
California Urban Partnership
Contra Costa Taxpayers Association
East Contra Costa County Branch of the NAACP
Experian
Hispanic 100
Honda
Latin Business Association
Orange County Taxpayers Association
R. L. Polk & Co.
Santa Ana Education Project
Sacramento Black Chamber of Commerce
Two individuals
Valley Industry & Commerce Association
OPPOSED: CARCO Group, Inc.
California New Car Dealers Association
Consumer Action
Consumer Attorneys of California
Consumer Federation of California
Consumers for Auto Reliability and Safety
instaVIN
LKQ Corporation
National Association of Consumer Advocates
National Salvage Vehicle Reporting Service
State of California Auto Dismantlers Association
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