NMVTIS Rule

BILLING CODE: 4410-02
DEPARTMENT OF JUSTICE
28 CFR Part 25
Docket No. FBI 117; AG Order No.
RIN 1110-AA30
National Motor Vehicle Title Information System (NMVTIS)

AGENCY: Department of Justice.
ACTION: Final rule.
SUMMARY: The National Motor Vehicle Title Information System (NMVTIS) has been
established pursuant to 49 U.S.C. 30502 and has the participation, or partial participation, of at
least 36 states. The purpose of NMVTIS is to assist in efforts to prevent the introduction or
reintroduction of stolen motor vehicles into interstate commerce, protect states and individual
and commercial consumers from fraud, reduce the use of stolen vehicles for illicit purposes
including fundraising for criminal enterprises, and provide consumer protection from unsafe
vehicles. This rule implements the NMVTIS reporting requirements imposed on junk yards,
salvage yards, and insurance carriers pursuant to 49 U.S.C. 30504(c). This rule also clarifies the
process by which NMVTIS will be funded and clarifies the various responsibilities of the
operator of NMVTIS, states, junk yards, salvage yards, and insurance carriers regarding
NMVTIS.
EFFECTIVE DATE: This rule is effective [insert date 30 days after date of publication in the
FEDERAL REGISTER].
FOR FURTHER INFORMATION CONTACT: David P. Lewis, 810 7th Street, NW,
Washington, DC 20531, 202-616-6500, WWW.NMVTIS.GOV.

SUPPLEMENTARY INFORMATION:
Background
The Anti-Car Theft Act of 1992, Pub. L. No. 102-519, 106 Stat. 3384, required the
Department of Transportation (DOT) to establish an information system intended to enable
states and others to access automobile titling information. As part of the Anti-Car Theft Act of
1992, DOT was authorized to designate a third party to operate the system. Since 1992, the
American Association of Motor Vehicle Administrators (AAMVA) has acted in the capacity of
the operator of the system. AAMVA is a nonprofit, tax exempt, educational association
representing U.S. and Canadian officials who are responsible for the administration and
enforcement of motor vehicle laws. The requirements of the Anti-Car Theft Act of 1992 were
amended by Public Law 103-272 and the Anti-Car Theft Improvements Act of 1996, Pub. L. No.
104-152, 110 Stat. 1384. The Anti-Car Theft Improvements Act of 1996 renamed the
automobile titling system the “National Motor Vehicle Title Information System” and
transferred responsibility for implementing the system from DOT to the Department of Justice
(DOJ). Hereinafter, the Anti-Car Theft Act of 1992 and the revisions made by Public Law 103272 and the Anti-Car Theft Improvements Act of 1996, codified at 49 U.S.C. 30501-30505, are
collectively referred to as the “Anti-Car Theft Act”or the “Act.”
While the overall purpose of the Anti-Car Theft Act is to prevent and deter auto theft,
title II of the Act, which authorizes NMVTIS, is intended to address automobile title fraud.
Accordingly, the primary purpose of NMVTIS is to prevent various types of theft and fraud by
providing an electronic means for verifying and exchanging title, brand, theft, and other data

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among motor vehicle administrators, law enforcement officials, prospective and current
purchasers (individual or commercial), and insurance carriers.1
Currently, 37 states are actively involved with NMVTIS, representing nearly 75 percent
of the U.S. motor vehicle population. Specifically, 13 states are participating fully in NMVTIS,
14 states are regularly providing data to the system, and an additional 10 states are actively
taking steps to provide data or participate fully2. States that participate fully in the system
provide data to the system on a daily or real-time basis and make NMVTIS inquiries before
issuing a new title on a vehicle from out of state and preferably before every title verification,
regardless of its origin or reason. Participating states also pay user fees to support the system
and the services provided to the state.
In 2006, the Integrated Justice Information Systems (IJIS) Institute, a nonprofit
membership organization made up of technology companies, was asked by Department of
Justice’s Bureau of Justice Assistance (BJA) to conduct a full review of the NMVTIS system
architecture to identify any technological barriers to NMVTIS implementation and to determine
if any potential cost savings was available through emerging technology. The IJIS Institute
report found that “the NMVTIS program provides an invaluable benefit to state vehicle
administrators and the public community as a whole. Advantages of the program include
improving the state titling process, as well as providing key information to consumers and law

1

Brands are descriptive labels regarding the status of a motor vehicle, such as “junk,”
“salvage,” and “flood” vehicles.
2
There are currently 13 states participating fully in NMVTIS: Arizona, Florida, Indiana,
Iowa, Kentucky, Massachusetts, New Hampshire, Nevada, Ohio, South Dakota, Virginia,
Washington, and Wisconsin. Fourteen states are providing regular data updates to NMVTIS:
Alabama, California, Delaware, Georgia, Idaho, Louisiana, Nebraska, New Jersey, New York,
North Carolina, Pennsylvania, Tennessee, Texas, and Wyoming. Ten states are actively taking
steps to provide data or participate fully: Arkansas, Michigan, Minnesota, Missouri, Montana,
New Mexico, Oklahoma, South Carolina, Vermont, and West Virginia. See www.NMVTIS.gov
for a map of current participation status.
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enforcement agencies.” In addition to this study, the Government Accountability Office (GAO)
also found NMVTIS to hold benefit potential for states, and a private cost-benefit study also
determined that NMVTIS could provide benefits in the range of $4 to $11 billion dollars
annually if fully implemented. NMVTIS and its benefits to states, law enforcement, consumers,
and others have been widely touted by motor vehicle or auto-industry organizations including
AAMVA and the National Automobile Dealers Association (NADA), by law enforcement
organizations such as the International Association of Chiefs of Police and the National Sheriffs
Association, by the North American Export Committee (NAEC), and by the International
Association of Auto Theft Investigators. NMVTIS’s benefits have also been held out by
national consumer advocacy organizations, and by industry-affiliated groups including the
National Salvage Vehicle Reporting Program and many others as identified in the public
comments.
NMVTIS is a powerful tool for state titling agencies. Fully participating state titling
agencies are able to use NMVTIS to prevent fraud by verifying the motor vehicle and title
information, information on brands applied to a motor vehicle, and information on whether the
motor vehicle has been reported stolen – all prior to the titling jurisdiction issuing a new title. In
order to perform this check, these states run the vehicle identification number (VIN) against a
national pointer file, which provides the last jurisdiction that issued a title on the motor vehicle
and requests details of the motor vehicle from that jurisdiction. Using a secure connection, states
then receive all required information or the complete title of record from the state of record.
States can then use this information to verify information on the paper title being presented.
Verification of this data allows fully participating states to reduce the issuance of
fraudulent titles and reduce odometer fraud. Once the inquiring jurisdiction receives the
information, a state is able to decide whether to issue a title. For states fully participating
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through integrated, online access, if a new title is issued, NMVTIS notifies the last titling
jurisdiction that another jurisdiction has issued a title. The old jurisdiction then can inactivate its
title record. This action allows fully participating jurisdictions to identify and purge inactive
titles on a regular basis and eliminates the need for these agencies to conduct these processes
manually. This service provides a measurable benefit to states in terms of cost savings. In 2007,
over 18.4 million title-update transactions were initiated and over 45 million messages were
generated via NMVTIS, which allow states to work and communicate securely and to perform
electronic title transactions between states.
NMVTIS also allows fully participating states to ensure that brands are not lost when a
motor vehicle travels from state to state. As noted above, brands are descriptive labels regarding
the status of a motor vehicle. Many brands, such as a flood vehicle brand, indicate that a motor
vehicle may not be safe for use. Unfortunately, motor vehicles with brands on their titles can
have their brands “washed” (i.e., removed ) from a title if the motor vehicle is retitled in another
state that does not check with the state that issued the previous title and other states that may
have previously issued titles on the vehicle to determine if it has any existing brands not shown
on the paper title. Because NMVTIS keeps a history of brands applied by any state to the motor
vehicle at any time, it protects individual and corporate consumers by helping ensure full
disclosure so that purchasers are not defrauded or placed at risk by purchasing an unsafe motor
vehicle. Currently, there are approximately 300,000,000 VINs in NMVTIS with over
40,000,000 brands included. NMVTIS also prevents “clean title” vehicles that are actually a
total loss or salvage from being used for the paper title that is later attached to a stolen vehicle
that is “cloned” to the destroyed “clean title” vehicle. Criminal enterprises seek these “clean
title” vehicles that are low cost to them (because they are destroyed or salvage) because it
increases their return when they sell a cloned stolen vehicle. It has been noted that criminal
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profits in these cases can more than quadruple if a “clean title” vehicle is used for cloning. Even
worse, because these cloned vehicles are able to get into the titling systems of the nonparticipating states, they often continue to be sold to new and unsuspecting owners. Cases
involving car dealers who had purchased stolen cloned vehicles and resold them to individual
consumers have been noted. NMVTIS also provides protections from other types of related theft
and fraud that ultimately place lives at risk and costs states, consumers, and the private sectors
billions of dollars each year. The proceeds from these illicit activities support additional crime
and fraud and even serious and violent crime. For more information on the benefits of NMVTIS,
visit www.NMVTIS.GOV.

Discussion of comments.
On September 22, 2008, the Department of Justice published a proposed rule to
implement various requirements concerning NMVTIS. See National Motor Vehicle Title
Information System (NMVTIS), 73 FR 54544 (Sept. 22, 2008). The rule proposed the
imposition of reporting requirements on junk yards, salvage yards, and insurance carriers. In
addition, the rule clarified the funding process for NMVTIS and the responsibilities of the
operator of NMVTIS, states, junk yards, salvage yards, and insurance carriers. The comments
and the Department’s responses are discussed below:
1.

General comments.

Comment: Several commenters suggested that NMVTIS will deter various types of crime and
fraud and suggested that since the passage of the Anti-Car Theft Act, the types of crime and
fraud as well as the methods have evolved. These commenters noted that the purpose of
NMVTIS remains to address these types of crime and fraud.

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Response: DOJ agrees that since the passage of the Anti-Car Theft Act, crimes and crime
techniques have evolved. DOJ, therefore, has updated the stated purpose of NMVTIS to be more
reflective of the crime and expansive direct and indirect fraud NMVTIS was intended to address
and is addressing today.
Comment: The American Salvage Pool Association (ASPA) commented that junk and salvage
yards have an exemption for reporting where and when a non-stolen verification is obtained
under 49 U.S.C. 33110, which authorizes a system that has never been implemented. The ASPA
commented that this exemption “is telling, however, in linking NMVTIS’[s] statutory purpose to
theft prevention, as opposed to brand information.”
Response: In addition to the fact that title II of the Anti-Car Theft Act addresses fraud, it is clear
that brand information can be directly linked to vehicle theft in addition to fraud. Law
enforcement investigations have repeatedly shown that “clean title” total loss vehicles are a
preferred commodity among car cloning and car theft rings as they bring a higher return on
investment. The exemption stating that junk and salvage yards are not required to report on an
automobile if they are issued a verification under 49 U.S.C. 33110, stating that the automobile or
parts from the automobile are not reported as stolen, is required by the Anti-Car Theft Act.
2.

Effectiveness.

Comment: Several submissions questioned the effectiveness of NMVTIS in eliminating or
preventing fraud and theft. Several of these commenters suggested the need for quantitative
proof of the system’s effectiveness before the law should be followed. At the same time
however, several submissions recognized the value of NMVTIS. As one commenter noted,
“NMVTIS would undoubtedly cut down on the number of rebuilt wreck fraud cases.” And the
State of Texas Department of Transportation noted that “[t]he system provides numerous

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obvious benefits to titling agencies, law enforcement and vehicle sellers, as well as consumer
protection to the buying public.”
Response: The Anti-Car Theft Act requires participation in the program based on analysis
presented at the time of the bill’s introduction and passing. Further, an extensive cost-benefit
analysis and a Government Accountability Office study both have independently determined that
NMVTIS will produce a significant public benefit far above the costs of implementing the
program. The cost-benefit study found that the system is only as effective as the number of
vehicles represented in the system. Non-participating states create “loopholes” where brands can
be washed, allowing further fraud in any state – participating or not. Discussions with privatevehicle-history-report providers and ongoing law-enforcement investigations at the state, local,
and federal levels have shown that non-participating states are targeted for exploitation because
that their vehicle titling information is not immediately shared with other states and because they
have no efficient ability to inquire with all other states that may have previously titled the
vehicle.
Feedback from participating states points to other positive outcomes of the program.
One state reports a 17 percent decrease in motor vehicle thefts; another reports a 99 percent
recovery rate on vehicles identified as stolen; three states have identified cloned vehicles by
working together, prior to issuing new titles; and another state reports cracking a car theft ring
responsible for cloning more than 250 cars worth $8 million. Aside from these results, it is clear
that if all states comply with the Anti-Car Theft Act requirements, brand washing in the way it is
most commonly conducted today will be eliminated because there is no other way to title a
vehicle other than going through a state titling process. The same goes for vehicle cloning,
which would be virtually eliminated if every state participated as required.

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Given these facts, and with Experian Automotive reporting that in the first 6 months of
2008 alone, there have already been more than 185,000 titles that initially were branded in the
first state, and were then transferred and re-titled in a second state in a way that resulted in a
purportedly clean title, we can be sure that NMVTIS will be effective in eliminating this type of
fraud, preventing a significant number of crimes, and potentially saving the lives of citizens who
would otherwise purchase unsafe vehicles.
In addition to the system’s documented value in reducing theft and fraud in protecting
consumers, the system also has been shown to create greater efficiencies within the titling
process when the inquiry and response are integrated into the states’ titling processes.
Comment: NAEC commented that “the effectiveness [of NMVTIS] can only be truly measured
until all jurisdictions are participating, because of the holes that are currently in the system due
to lack of full participation.” The State of California Department of Motor Vehicles seemingly
agreed with this comment when it noted that “these beneficial outcomes can only be achieved
when all 50 states and the District of Columbia are participating.” The Virginia Department of
Motor Vehicles commented that “the system provides a great value to participating states, and
that value will exponentially increase as each jurisdiction begins fully participating.”
Response: DOJ agrees in part with these assessments. As discussed above, partial participation
creates loopholes criminal organizations exploit, and, therefore, measuring the full benefit of a
comprehensive NMVTIS is difficult without participation by all states. However, NMVTIS
provides significant benefits to participating states even when state participation is not at 100
percent.
Comment: One commenter asked if the information would have much “practical utility,” or
whether it would only serve as further documentation of a market that is only broadly related to
secondary criminal enterprises. The commenter further noted that “the rule will only spur
9

increased sophistication of organized crime. This increased sophistication must be balanced
against the proposed benefits from the small contraction in the secondary criminal market that is
assumed to occur under this rule. One of the benefits of the proposed rule is the documentation
of salvage pool sales. But this benefit is limited: it will only require criminals to go through
more steps, steps that require increased organizational skills. Hence, although the rule may push
some criminals out of the market overall (the less sophisticated and organized), it will also
indirectly spur increased sophistication and organization of the surviving criminal organizations.
Although one of the primary goals of NMVTIS is theft deterrence, there is no data to support the
conclusion that this portion of the criminal market will be affected by the proposed rule.”
Response: DOJ disagrees with these comments. There is substantial evidence, statements, and
documentation that NMVTIS will impact vehicle theft and fraud.
Comment: Several commenters, including law enforcement, consumer advocates, industry
associations, and states motor vehicle administrators, including California’s noted that NMVTIS
is needed and will be effective in addressing the threats of auto theft, cloning, fraud, and in
providing protection for consumers against fraud.
Response: DOJ agrees with these comments and notes that the expected benefits and positive
outcomes of NMVTIS have been confirmed not only by government and private research, but
also by multiple representatives of every stakeholder community affected by the system,
including state titling agencies, state and local law enforcement, consumers, insurance carriers,
and junk- or salvage-yard operators.
Comment: NAEC commented that law enforcement successes to date can validate the benefits
and costs associated with NMVTIS and that “the NAEC is solid in its belief that NMVTIS is a
fundamentally sound approach to ‘title washing,’ title fraud, vehicle theft and public safety
related to the ‘branding’ of un-road worthy vehicles in this Country.” The NAEC provided data
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from one state that uses NMVTIS and, as a result, has identified and recovered hundreds of
stolen vehicles. The NAEC further commented that to suggest that the system should be
cancelled “demonstrates a lack of understanding [of] the magnitude of the vehicle theft problem
in North America and Public Safety issues surrounding ‘branded’ vehicles.”
Response: DOJ agrees with the NAEC’s assessment of NMVTIS.
Comment: The State of Illinois Motor Vehicle Administration commented that other services
have become available since the Anti-Car Theft Act was passed and that NMVTIS should “be
put on hold” while analysis on the need for NMVTIS can be conducted. The Maine Bureau of
Motor Vehicles suggested that NMVTIS was not needed because “consumers have other options
for checking vehicle title status prior to purchase.”
Response: While other fee-based options for checking vehicle title status are available for
consumers, the ability of consumers to check NMVTIS for vehicle title status is required by
federal law and federal court order. When fully implemented, NMVTIS will provide assurances
that no other option can provide – complete and timely information on all vehicles in the U.S.
The Anti-Car Theft Act provided no flexibility for states, insurance carriers, or junk or salvage
yards to filter information shared with NMVTIS; thus NMVTIS will be the most-reliable source
of information once fully implemented. Several providers of vehicle history information have
agreed to make available NMVTIS data as a way of enhancing their products, demonstrating that
NMVTIS does have unique value. DOJ is not in a position to put NMVTIS on hold, as recent
litigation was based on the complaint that DOJ had waited too long to issue NMVTIS
regulations. A court has ordered DOJ to publish these regulations by January 30, 2009. See
Public Citizen, Inc. v. Mukasey, No. 3:08-cv-00833-MHP, 2008 WL 4532540 (N.D. Cal. Oct. 9,
2008).

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Comment: One commenter noted that “it is beyond the scope of the NMVTIS regulations to
reform the process by which insurers assign title designations; however having the sales reported
in a timely fashion, and by including appropriate identification of both international, domestic
(out of state) and domestic (in state) buyers, it will help the Law Enforcement Community in its
effort to control crime and protect the public.”
Response: It is beyond the scope of NMVTIS and DOJ’s intentions to alter insurance carrier
policies and procedures in terms of title designations. While transfers of vehicles from insurance
carriers to others would likely be captured in the NMVTIS reporting process due to subsequent
reporting by junk and salvage yards, it is unlikely that the names of buyers will be reported or
captured in the system because this is not a required data field. Requiring the name of such
buyers is of significant value to law enforcement for preventing and investigating automobile
theft and fraud. Additionally, as is pointed out elsewhere in these comments, establishing a
“chain of possession or custody” is important for effective and efficient law-enforcement
investigations.
Comment: One commenter noted that “[a]ccording to Experian Automotive, (PR Newswire
August 25, 2008 Experian, Schaumburg, IL), in the first 6 months of 2008 alone, there have
already been more than 185,000 titles that initially were branded in the first state, and were then
transferred and re-titled in a second state in a way that resulted in a ‘clean’ title. This situation
cannot be addressed without much stronger controls and full reporting. There is a great deal of
abuse of the title system and we regularly observe severely damaged units that have been given
clean title designations to vehicles that have massive damage. As a result, criminals regularly
buy these vehicles for the paper, and steal a like vehicle and engage in cloning or VIN
swapping.”

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Response: NMVTIS will protect against these types of abuses by creating a brand history (a
record of the various brands associated with a particular VIN) for every vehicle that prevents a
future title-issuing agent from being unaware of a vehicle’s brand history and will eliminate the
possibility of a vehicle being titled in more than one state (a common occurrence today) once all
states are compliant with the law.
Comment: Maine Bureau of Motor Vehicles commented that Maine “already has procedures in
place to check for stolen status prior to issuing a title and for carrying forward out-of-state
brands.”
Response: NMVTIS is designed to provide more than a simple stolen-vehicle check. Further,
neither carrying forward out-of-state brands based on paper titles presented, nor checking the
paper documentation against a third-party data provider, eliminates brand washing. Washed
brands may not appear on paper or in third-party databases. Because states are required to report
title transactions to NMVTIS and to check NMVTIS prior to issuing a new title, NMVTIS is the
only system that can eliminate such brand washing when fully implemented. No state, except
those participating in NMVTIS when fully implemented, have any ability to fully verify brand
histories and carry forward out-of-state brands without manually contacting every state and the
District of Columbia prior to issuing a new title.
Comment: One commenter noted that “the benefits of NMVTIS are also not illogical simply
because concrete figures do not exist concerning its limited implementation.” “Given
NMVTIS’[s] [implementation] status, any figures outlining the benefits would prove highly
conservative even if found. It is not difficult to imagine though that illegal reselling of salvaged
vehicles takes advantages in reporting gaps by moving across state lines. Statistics concerning
such operations are well-documented even if the benefits of NMVTIS are not.” “Being able to

13

verify the success and results of NMVTIS thus depends critically on the provision of information
from all states.”
Response: DOJ agrees with this comment.
Comment: The Missouri Department of Revenue commented that the system is only as good as
the number of jurisdictions participating, and in light of current participation levels, the state is
expending resources for data that may not be inclusive or accurate.
Response: As of December 2009, NMVTIS includes nearly 75% of the U.S. vehicle population.
At the same time, several states are actively working towards participation in NMVTIS, which
will take NMVTIS closer to 100% participation. With the inclusion of insurance, junk, and
salvage yard information, and given that many states report to NMVTIS in “real time,” NMVTIS
is likely to be as inclusive as any vehicle title history database available, even before 100 percent
state participation. As for accuracy, the system currently includes only data from state motor
vehicle administrations, and DOJ is aware of no errors in NMVTIS. As stated in this rule,
procedures and safeguards will be put into place to ensure identification and correction of any
errors identified. Non-participating states, on the other hand, are expending their resources
based on fraudulent information when they issue titles in many situations.
3.

Need and purpose.

Comment: One commenter asked “To what extent is consumer protection and the prevention of
fraud in the secondary car market domestically and internationally a high priority for the
agency?”
Response: The prevention of fraud that affects U.S. citizens, whether it be here or abroad, and
consumer protection are priorities for DOJ and for NMVTIS. DOJ’s Strategic Plan includes in
its second goal “Strategic Objective 2.5: Combat public and corporate corruption, fraud,

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economic crime, and cybercrime.” U.S. Department of Justice Strategic Plan, Fiscal Years
2007-2012.
Comment: One commenter noted that states often sell their vehicle history records to private,
third-party organizations who then resell the data. The commenter requested that the final rule
spell out that the states own the data and that the operator of the system may not resell the data to
other providers without authorization of the states.
Response: While NMVTIS may contain a subset of data on vehicles titled within the U.S., it
does not include all of the information a state motor vehicle administration may possess. DOJ
agrees that the state-maintained vehicle history databases are the province of the states, and that
the intent of the Anti-Car Theft Act was not to create a database of information for bulk resale.
The operator of the system, therefore, will not resell the NMVTIS database in its entirety to
anyone. Two key goals of the Anti-Car Theft Act, however, are consumer access to the data,
and a self-funded system. For these reasons, the operator will be allowed to charge consumers
for use.
Comment: The State of Illinois motor vehicle administration questioned how NMVTIS will
interface with law-enforcement data systems within the state that are used to identify and “flag”
stolen vehicles.
Response: NMVTIS is not expected to “interface” with law enforcement systems within the
state. Information in NMVTIS related to a vehicle’s “theft status” or history emanates from one
of two places – state brands and the National Insurance Crime Bureau’s (NICB’s) theft file,
which is derived from the FBI’s National Crime Information Center (NCIC). Law enforcement
systems will be able to link or connect to the NMVTIS law enforcement access site, however,
which will include all NMVTIS information without restriction. NCIC will always be the
primary repository of active theft files for law enforcement. Stolen vehicle information in
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NMVTIS is provided only for state titling purposes for those states that cannot access NCIC or
state-based law enforcement systems.
4.

Prospective purchaser inquiries.

Comment: The Idaho Transportation Department commented that the proposed rules included
several data elements in the requirement for prospective-purchaser inquiry responses or
consumer access reports that would effectively eliminate the need for an actual state record to be
requested by a consumer or prospective purchaser, thereby reducing state revenues realized from
the sale of motor vehicle records.
Response: At a minimum, NMVTIS will provide the following pieces of information in response
to an inquiry, if that data is present in NMVTIS: a) the current state of title; b) the brand history
of the vehicle; c) the latest reported odometer reading; and d) information about the vehicle’s
reported appearance in the inventory of a covered junk or salvage yard and/or on any insurance
carrier determination of total loss related to that vehicle. There are several reasons, however,
why states are likely to continue to experience demand for their full title records. First, states
often possess additional information that is not anticipated to be within NMVTIS but that is of
interest to many purchasers are. This information may include ownership information, lienholder information, registration information, safety-inspection data, and other details that the
states may have but are not required to report to NMVTIS. Second, by providing consumers
with the current state of title, NMVTIS actually serves as a nationwide pointer that will result in
an increase in requests for state records. And DOJ will direct the operator to ensure that all
consumer access portal providers provide consumers with a link to the state’s site or to the
state’s designated vehicle history report access point, to purchase the full state record. Third,
states are eligible to become portal providers, thereby capturing an opportunity to increase

16

revenues by providing access to NMVTIS data and to the states’ records for a state-determined
fee.
Comment: The State of Nevada Department of Motor Vehicles commented that “Nevada will
not allow the unauthorized release of the title data we send to NMVTIS. Nevada statutes limit
what data can be released and to whom. Will AAMVA have the capability and assume the
responsibility of prescreening those who want to access Nevada title data to ensure the
disclosure complies with Nevada statutes? Will AAMVA have the capability of collecting and
forwarding the fees currently charged for accessing and receiving Nevada’s title records without
Nevada becoming a third party?”
Response: Neither NMVTIS nor the operator will be releasing any state’s vehicle title records.
The information that will be shared via NMVTIS is not a state’s vehicle title record and is
generated from the index maintained by NMVTIS, with limited information on the identified
vehicle, as authorized and directed by the Anti-Car Theft Act. This federal statute provides the
necessary authorization and direction to share this information, how it will be shared, and to
whom it can be shared. After providing the NMVTIS information in response to a consumer
inquiry, NMVTIS, through the third-party portal providers, will offer consumers the ability to be
directed to the state of record’s web site in order to purchase the state’s full vehicle title record
from the current state of record. Once that “handoff” occurs, any decision by consumers to
purchase the state’s title record will be governed by applicable state statutes, policies, and
processes, and the state’s vehicle-history-report provider’s policies and processes. NMVTIS
prospective purchaser inquiry was designed in this way in an effort to point consumers to state
web sites for state vehicle title histories from that state should they be desired and available, thus
enabling consumers to purchase the full record and generating revenues for the states.

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Comment: Several motor-vehicle administration agencies and other organizations commented
that if personal information is released by NMVTIS to non-government organizations, it may be
in conflict with the provisions of the Driver’s Privacy Protection Act of 1994 (DPPA). Several
of these commenters recommended that this information only be available to law enforcement
and/or government organizations, while others indicated that they would be prohibited from
sharing personal information with prospective purchasers.
Response: According to the DPPA, 18 U.S.C. 2721(b)(2), permitted uses of information
protected by the DPPA include “[f]or use in connection with matters of motor vehicle or driver
safety and theft; motor vehicle emissions; motor vehicle product alterations, recalls, or
advisories; performance monitoring of motor vehicles, motor vehicle parts and dealers; motor
vehicle market research activities, including survey research; and removal of non-owner records
from the original owner records of motor vehicle manufacturers.” In addition, 18 U.S.C. 2721
(b)(3) provides additional authorizations “[f]or use in the normal course of business by a
legitimate business or its agents, employees, [or] contractors” These exceptions include
sufficient authorization for states to provide access to personal identifying information, and
many commenters agreed. Nonetheless, NMVTIS includes personal information primarily for
the benefit of law enforcement agencies, including governmental regulatory and compliancemonitoring agencies that may not have immediate access to such data or to state motor-vehiclehistory files. NMVTIS will not provide personal information in the NMVTIS central file to
individual prospective purchasers and may not provide access to any other type of user without
securing DOJ approval of such access.
Comment: Several commenters, notably from the consumer-advocacy community, encouraged
DOJ to “minimize, to the greatest extent possible[,] any cost to consumers for accessing the data
base.”
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Response: By statute, the fees NMVTIS charges will not be more than the costs of operating the
system. Although NMVTIS does not control what portal providers will charge for consumer
access to the data, by making that data available to all potential portal providers at the same
price, it will be difficult for any provider to charge too high a premium for access to that data.
Comment: One commenter noted that NMVTIS will make it possible for users to understand
either what a state-issued brand (i.e., statement of the condition or prior use of a vehicle) means
or which state they need to go to understand the brand’s meaning. “Even if in some
circumstances NMVTIS can say nothing more than ‘branded in jurisdiction X,’ at least the
NMVTIS user will know which [state] jurisdiction to consult.”
Response: Because neither the Anti-Car Theft Act nor NMVTIS creates universal brands, DOJ
will direct the NMVTIS operator to ensure that consumer-access portal providers provide a link
to brand definitions and any available related explanations, so that consumers can be aware of
how brands may be defined. One of NMVTIS’s benefits is that it will identify which states have
branded a vehicle, informing consumers of which jurisdiction to consult for further information.
Comment: The State of Alaska commented that neither DOJ nor the NMVTIS operator should
be permitted to discount transaction fees for volume purchasers. This commenter stated that not
discounting the price will maximize revenue collected to offset NMVTIS operational costs,
resulting in reduced rates charged to the states.
Response: The volume discounts established by the current operator have been more effective
in securing consumer-access portal providers than the non-discounted rates. DOJ will continue
to monitor the fee structure to ensure that it is effective in securing participating providers
without increasing reliance on state fees. Fees generated through the portal providers will offset
the financial impact on states.

19

Comment: One commenter noted that the NMVTIS prospective-purchaser inquiry is redundant
of similar services that already exist.
Response: A significant number of consumer advocacy, law-enforcement, and other
organizations submitted comments arguing that NMVTIS’s prospective-purchaser inquiry is not
redundant with existing services. For example, NMVTIS receives data more frequently from
some states than some the third-party databases, and it includes information that some of the
third-party databases do not have.
Comment: The Institute of Scrap Recycling Industries, Inc. (ISRI) argued that the law does not
give DOJ the authority to expand NMVTIS data collection to further the interests of a particular
group of stakeholders. The ISRI expressed concern that certain stakeholders would promise
smooth and easy implementation of the rule if DOJ were to demand collection of additional data
for NMVTIS.
Response: No individual or entity has made such claims or promises, and DOJ has not expanded
the scope of data to be collected beyond that which was intended or demonstrated to be
necessary to accomplish the program’s goals as set forth in statute.
5.

Privacy.

Comment: One commenter noted that “[t]here are provisions in law in regards to privacy of
individual identity that do not appear to be satisfactorily addressed in this document.” Another
commenter noted that it will not send any names to NMVTIS because names do not validate a
title and because of concerns over compliance with the DPPA. The Virginia Department of
Motor Vehicles commented that NMVTIS was intended as a pointer system, and it is not
necessary for that pointer system to include all data fields, particularly privacy information.
AAMVA also recommended against requiring owner name in the NMVTIS central file for
privacy and cost reasons.
20

Response: DOJ takes these concerns very seriously and agrees that privacy interests must be
protected. While names may not be needed to validate a title, names are relevant and necessary
from a law-enforcement perspective, and in certain other situations. To ensure the protection of
privacy however, DOJ has amended the rule to provide that no privacy fields shall be available
without DOJ approval to any NMVTIS user, other than state-titling, law-enforcement, and other
government agencies. Additionally, the operator shall ensure that no individual prospective
purchaser has access to any personal information. DOJ will require that the operator of
NMVTIS have an approved privacy policy in place that describes how the operator will ensure
adequate privacy protections, consistent with the DPPA and other relevant statutes.
Comment: NAEC noted that data privacy fields should be available for law-enforcement
purposes.
Response: DOJ agrees with this comment.
Comment: The Automotive Recyclers Association (ARA) and ISRI both emphasized that
confidential business information, such as the number and type of automobiles processed by
individual junk and salvage yards in a given period of time, the sources of those vehicles, and
related information not be released to the public or other data providers.
Response: The operator will not disseminate this type of information to any non-governmental
entity or individual, and this information will not be available to prospective purchasers. DOJ
will closely monitor this aspect of the system to ensure that access to sensitive or personal data
only proceeds with DOJ approval.
Comment: Several commenters requested clarification in the final rule on any liability or
immunity for providing data to NMVTIS as the Anti-Car Theft Act requires.

21

Response: The Anti-Car Theft Act grants certain immunity for those reporting data to the
system. The scope of this immunity is described in the Act at 49 U.S.C. 30502(f) and does not
require clarification.
Comment: Several commenters recommended maintaining provisions for accessing personal
information to qualified DPPA commercial consumers, so that entities that currently work with
the states to access this information could continue to do so, which would benefit the states and
NMVTIS.
Response: Providing continued access to these entities may facilitate effective and efficient
service to the states, but such access may only occur with DOJ approval, and may also require
compliance with state-application and certification processes and procedures. In most cases,
these entities will only use NMVTIS as a pointer to connect with and access the state’s data,
including personal information, if the state provides for that access.
6.

Timely reporting.

Comment: Several commenters, including several national consumer-advocacy organizations,
requested that dispositions by insurance, junk, or salvage sales to other entities be reported at the
time of the sale and include the identity of the buyer, which would support law-enforcement
investigations into fraud and theft. The National Salvage Vehicle Reporting Program also
commented that salvage pools should be required to report sales within one business day of the
sale in order to reduce fraud and theft.
Response: The reporting of dispositional information is critical and needs to be timely, but the
DOJ cannot require that the reporting be anything other than monthly in accordance with the
requirements of the Anti-Car Theft Act. DOJ has added the requirement for such entities to
report the name of the primary buyer of such vehicles.

22

Comment: ARA and ISRI commented that junk and salvage-yard operators have an interest in
reporting efficiency and recommended that such entities be permitted to report the ultimate
intended disposition of the vehicle at the time of initial reporting. ASPA also reported that
requiring an entity to continuously report that a vehicle is in its inventory is inefficient and
pointless.
Response: In cases where the ultimate disposition is known with certainty, junk and salvageyard operators now will be permitted to report disposition in their initial report. The reporting
entity is responsible for ensuring that the vehicle is disposed of in the manner reported or for
filing an updated report to account for a different disposition. In response to concerns of
reporting inefficiency, DOJ notes that entities report once upon the vehicle entering the
inventory and are only required to report again on that vehicle if they need to update the record.
Should the disposition be known at the time of initial reporting (e.g., “sale”), the entity would
only be reporting once on each vehicle.
Comment: One state motor-vehicle administration and other commenters asked that insurance
carriers report more frequently. That state motor-vehicle administration noted that “if a vehicle
is damaged on the 5th day of the month and the insurance carrier has already sent their [sic] file
for the month, the state will not know of the damage until the following month’s update.”
Several commenters representing nearly every stakeholder group noted that it was important for
the reporting into NMVTIS to be timely, ideally in “real time.” Experian Automotive
commented that a monthly reporting requirement would be slower than the current industry
practice for insurers.
Response: The 16-year-old language of the Anti-Car Theft Act is no longer consistent with
business practices in an electronic age. Nonetheless, the language of the Anti-Car Theft Act
provides no flexibility with regard to this reporting requirement. DOJ does strongly encourage,
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however, that all reporters provide data to the system as quickly as possible, preferably within 24
hours of acquisition, determination, or other reporting trigger. DOJ expects to highlight such
reporting efficiencies and stakeholder participation on its official NMVTIS site,
www.NMVTIS.gov.
7.

Third-party reporting and reporting exceptions.

Comment: Two commenters noted that the exception allows junk- and salvage-yard reporting to
occur through a state titling agency was flawed. One of these commenters suggested that all
junk and salvage yards should be required to report directly into NMVTIS. The NADA also
commented that allowing this exemption would only serve to create a loophole, particularly in
cases of conflicting definitions among the states and between states and the Anti-Car Theft Act.
Instead, NADA suggested allowing an exemption in cases where an insurance carrier reports to a
third party that has no definitional restrictions, such as the NICB, that can transmit the
information to NMVTIS without concern for conflicting definitions.
Response: While DOJ will take steps to ensure data integrity and quality, it would be
unreasonable to prevent third-party reporting. Ultimately, insurance carriers and junk- and
salvage-yards are responsible for their compliance with the Act, including the reporting of
required information. These reporters must ensure that they are compliant with the reporting
requirements for every vehicle handled. If such reporters cannot be certain of a third party’s
ability to provide the required information into NMVTIS, the reporter must report through a
different third-party provider. Additionally, certain states require this reporting, and therefore, a
duplicate reporting structure would continue to exist even if DOJ did not allow junk or salvage
yards to report through states. For purposes of clarification, however, the Anti-Car Theft Act
does not provide a specific exemption for insurance carriers to report through states, as it does
for junk- and salvage-yard operators. Instead, DOJ has provided an exemption for insurance
24

carriers to report to NMVTIS through an identified third party that is approved by the system
operator. DOJ and the operator have attempted to identify potential third parties that can report
to NMVTIS who already receive this type of information from insurance carriers and junk- and
salvage-yard operators.
Comment: ARA commented that pursuant to the Act, “junk and salvage yard operators are not
required to report on a vehicle when they are issued a verification stating that the automobile or
parts from the automobile are not reported as stolen.” ARA argued against the exemption’s
implement because this exemption is “completely unworkable” without time limits on the
verification and other controls, and because the exemption creates a “significant loophole that
could foster additional illegal activity....”
Response: Pursuant to the Anti-Car Theft Act, a junk- or salvage-yard that is issued a
verification under 49 U.S.C. 33110 stating that an automobile or parts from that automobile are
not reported as stolen is not required to report to NMVTIS. Therefore, the Department has
retained this exemption from NMVTIS reporting in these regulations.
Comment: ARA commented that it appreciates attempts to exempt reporting by junk and
salvage yards already reporting to a third-party organization that is sharing its information with
NMVTIS. The ARA further commented, however, that yards not currently participating with a
cooperating third party will need a separate reporting mechanism that is labor efficient and
economical in order to report NMVTIS information.
Response: DOJ agrees. The operator will designate at least three third-party organizations that
have expressed a willingness to share information with NMVTIS that they receive from insurers
and junk- and salvage-yards. In addition, DOJ will endeavor to identify a reporting mechanism
that is “sector” and “stakeholder” neutral. Third-party providers need to be identified who will
provide the information to the stakeholders or allow such third-party providers to charge a
25

nominal fee for collecting and reporting the information on behalf of junk and salvage yards.
DOJ hopes to identify providers that do not charge fees, but this is difficult with sector or
stakeholder-neutral providers.
Comment: Several state motor vehicle administrations commented on the third-party
exemptions provided in the proposed rule. One state motor vehicle administration commented
that it currently has some but not all of the information required for junk and salvage reporting.
The state suggested that it does not have the resources available to accept and report all of the
information required from junk and salvage yards. Another state motor-vehicle administration
made a similar point and stated that the requirements effectively establish an inefficient dualreporting requirement. Another suggested that the phrase “or cause to be provided on its behalf”
be clarified so that it is clear that states do not have a responsibility to report insurance, junk, or
salvage information to NMVTIS on behalf of these organizations. The State of New York
commented that it receives reports from junk and salvage yards in paper, that it does not process
all of the reports received, and that the processing time may be beyond the reporting timeframes
required of junk and salvage yards. Another asked that entities reporting to states as their chosen
method of compliance be required to certify that they are meeting their reporting requirements
by reporting to a specific state or states.
Response: A state’s willingness to make such alterations to accommodate third-party reporting
is strictly voluntary. Junk and salvage yards in states that cannot accommodate third-party
reporting as required by the Anti-Car Theft Act and the rules will have other options for
compliance reporting. While DOJ is committed to avoiding inefficient processes, DOJ is not
able to eliminate data fields for the sake of efficiency alone and is not willing to impose
additional requirements on the states to expand data collection and reporting on behalf of junk
and salvage yard operators.
26

Comment: ASPA commented that while the proposed rule allows states to share junk and
salvage information with NMVTIS, the inclusion of this data in state title information systems
would be based on the state’s definition of “salvage” and “junk” vehicles. ASPA questioned
how the state would report data that it may not have because that state does not require
submission of that data.
Response: The rule requires that junk- and salvage-yard reporting by or through states must
include all of the data that junk- and salvage-yard operators are required to report. State
definitions of “salvage” or “junk” do not alter a junk- or salvage-yard operator’s responsibility to
report vehicles in its inventory. If junk- and salvage-yard operators are not reporting all of the
required data to the state, or the state is not able to report all of the data to NMVTIS as required
of the yard, the junk or salvage yard must report independently of the state.
Comment: ASPA contended that the provisions of the proposed rule with regard to the direct
reporting exemptions for junk or salvage yards that already report inventories to the states appear
to conflict with the wording of the statute that ASPA described as “only requires the reporting of
acquisition” of such vehicles.
Response: The Act specifically spells out what information is to be reported by junk and salvage
yards and requires junk and salvage yards to report more than the mere acquisition of the
vehicle.
8.

Total loss definition/fair salvage value.

Comment: One commenter expressed concern at the reference to “fair salvage value.” Any
vehicle with a high salvage value will be totaled with a lower damage appraisal, and any vehicle
with a low salvage value will be totaled with a high damage appraisal. The commenter noted
that without uniformity as to the assignment of the salvage declaration, consumer protection
cannot be guaranteed. The commenter argued for a more uniform definition of total loss that is
27

not driven by the salvage value, noting that “[t]his proposed market assessment of the vehicle
value can either make or break the rule.” Others commented positively on the use of a “valuebased” definition.
Response: DOJ used this reference because it was required by the Anti-Car Theft Act. DOJ
understands that there are different ways or bases for determining total loss, and that different
stakeholders may argue for different standards based on their interests.
Comment: Nationwide Mutual Insurance Company commented that Congress specifically
granted the DOJ authority to collect information from insurers on vehicles that such insurers
have “obtained possession of” and determined to be “junk automobiles or salvage automobiles.”
Nationwide further commented that “It is not logical that declaring a vehicle a total loss should
trigger reporting of the total loss automobiles as salvage and/or junk. The determination of [a]
vehicle as a total loss can be based upon other economic considerations not reflective solely on
the actual cost of reporting the vehicle. Therefore, we assert that the inclusion of total loss
information in the proposed rule is inconsistent with our understanding of the intent of the
statute.”
Response: DOJ disagrees. DOJ is mandated to require reporting of “salvage” vehicles, which
DOJ has determined to include those vehicles determined to be a “total loss.” DOJ recognizes
that, in certain circumstances, the decision to declare a vehicle a “total loss” may be based on
other determinations, such as the fact that a vehicle has been stolen. To address this issue,
insurance carriers are strongly encouraged to include with “total loss” reporting the primary
reason for the determination. Doing so not only would provide a better position for insurance
carriers, but it also would allow the consumer to be aware of the specific circumstances for the
determination. DOJ does not agree that “obtained” should be defined in such a limited way to
include only ownership.
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Comment: Nationwide Mutual Insurance Company commented that DOJ should clarify the
definitions of junk and salvage by requiring insurers to report on those automobiles titled as
“junk” or “salvage” under the laws of the state where the insurer obtains title to the motor
vehicle.
Response: DOJ disagrees and notes that not even half of the states require such titles or brands
(see Texas’ comment below). Such a definition, therefore, would create a significant loophole
that would be counter to the consumer protection intentions of the Anti-Car Theft Act.
Comment: The State of Texas Department of Transportation commented that “‘Total loss’ is not
a term used in Texas salvage motor vehicle law and has no bearing on whether a vehicle is
determined to be a salvage vehicle. A vehicle can be considered a ‘total loss’ by an insurance
company, but not be branded as salvage because the vehicle does not meet the definition of
salvage in the title state.... Use of this term could be problematic if NMVTIS shows a vehicle as
a total loss and the Texas records indicate nothing.”
Response: The requirement for insurance carriers to report “total loss” information is put in
place for exactly this reason – vehicles that are salvage may not be branded as salvage by many
states. To resolve this discrepancy, NMVTIS blends reported information from multiple sources
so that prospective purchasers are aware of the vehicle’s true history and can avoid being
defrauded and placed in an unsafe vehicle. The presence of “total loss” information in the
absence of a state salvage brand will need to be explained by portal providers, so that
prospective purchasers (and others) are aware of what the apparent discrepancy means, and how
it occurs. DOJ does not expect states to take any action based on this information that is not
authorized in state law and does not believe that it was the intention of the Anti-Car Theft Act to
require them to do so.

29

Comment: Several insurance-related associations commented that “[t]he statute requires that
insurers report junk and salvage automobiles, yet the regulation would require reporting of ‘total
losses,’ a term that would include some automobiles that are not junk or salvage. It is axiomatic
that a regulation cannot expand the limits of a statute, and especially if in doing so, the
regulation imposes added burdens and costs. Not only is such expansion inconsistent with the
underlying statute but there is also nothing in the Court’s order in Public Citizen et al. v. Michael
Mukasey that mandates or authorizes any such expansion of the statutory definition of
automobiles to be reported.”
These commenters further noted “that the statutory definitions of ‘junk’ and ‘salvage’ in
49 U.S.C. 30501 are not used by most state or insurance carriers. To enable consistency with the
existing state laws and data systems and thereby to expeditiously implement NMVTIS, we
request that the last sentence of Section 25.55(a) be amended to read in the final regulation: ‘An
insurance carrier shall report on any automobile that it has determined to be a junk or salvage
automobile under the law of the applicable jurisdiction.’ This approach makes sense because
since the Congress enacted this statute in 1992, most states have defined the meaning of ‘junk’
or ‘salvage.’ These state laws represent the best understanding of these terms today. Requiring
their use by regulation would implement the spirit of the law in a practical way. Data reported
by insurers in this manner will also be consistent with data reported by the states.”
Opposing this view, consumer-advocate litigators commented that “[t]he Insurers’
comment that ‘any expansion via regulation of the categories of automobiles for which reporting
is mandated, would be unauthorized.’” However, these consumer-advocate litigators do not
suggest that it is outside the scope of the Department’s authority to provide construction for such
terms in the statutes. It is obviously the duty and the province of the Department to use its broad
discretion in construing these terms.” The consumer-advocate litigators further commented that
30

the rule’s enabling of electronic reporting through third parties that may already have access to
the data addresses the need for reporting in the least-burdensome and least-costly fashion. These
commenters further argued that “[t]he Insurers take issue with the Department’s proposal to
provide that a vehicle treated as a total loss is deemed a salvage vehicle. However, it is squarely
with the Department’s province to make the determination that the fact that a vehicle has been
treated as a total loss indeed is evidence that it is a ‘salvage’ vehicle, and that both legally and
practically the vehicle is a ‘salvage’ vehicle. Similarly, it is necessary, in carrying out the clear
protective purposes of the statutes, that this construction be given to these terms.... The Insurers
next propose amending the last line of § 25.55(a) to state ‘An insurance carrier shall report on
any automobile that it has determined to be a junk or salvage automobile under the law of the
applicable jurisdiction.’ Such a change would incorporate the limitation they seek of
disregarding total loss vehicles. It also appears to be an attempt to require that state definitions
of ‘junk’ or ‘salvage’ be substituted for the definitions in the statutes, rather than additional to
and supplementary of them. That would be entirely improper, of course, defeating the central
purpose of providing a national definition of ‘salvage’ that sets a floor for reporting, not a
ceiling.” These commenters further noted the “extraordinary patchwork of state laws regarding
title ‘brands’ and even the terms used for labeling ‘salvage’ or ‘total loss’ vehicles. The uniform
minimal reporting standard provided by the NMVTIS statutes is of critical importance.”
Response: DOJ agrees that it possesses authority and responsibility to provide the definition of
these terms. Additionally, in order to meet the requirements of the Act with regard to providing
prospective purchasers with the information needed to make an informed purchase decision, and
in order to inform state title administrations and law enforcement of that vehicle’s history, full
disclosure of total loss information is needed regardless of a state’s action or inaction on that
vehicle.
31

Comment: Several insurance-related organizations and associations commented that “[s]ection
25.55(a) states that the insurer must report automobiles that it has obtained ‘possession of and
has decided are junk automobiles or salvage automobiles.’ The term possession is not clear. To
be workable, ‘possession’ should be construed as ‘the titled owner’ as represented on the
certificate of title, because insurers would only be able to report on those automobiles to which
they are titled owners. Otherwise, they do not record ‘possession’ of automobiles and could not
report them.”
The insurance-related organizations further commented that “[r]eplacing ‘possession’ in
the regulation with ‘titled owner’ would also be workable and consistent with the remainder of
the sentence which requires that insurers must report automobiles which they possess and have
decided they are junk or salvage automobiles. Both the ‘possession’ and ‘decision’ are
manifested by re-titling, which is reportable by insurers in an efficient manner. Therefore, the
language would read, ‘a report that contains an inventory of all automobiles of the current model
year or any of the four prior model years, that the carrier during the past month is the titled
owner and has decided are junk automobiles or salvage automobiles.’”
Opposing this view, several consumer-advocate litigators commented that while the term
is not clear and needs construction in furtherance of the protective purposes of the statute, they
disagreed with the insurers proposed substitution of “is the titled owner of” for “has obtained
possession of”in section 25.55(a). These commenters further noted that the effect of the
insurers’ comments would be to “eliminate any reporting requirement of salvage vehicles by
insurance carriers whatsoever for all but those vehicles that they do in fact actually title in their
name. There are innumerable reasons why, and methods by which, they may legally in many
instances not obtain titles to salvage vehicles in their names under the existing hole-laden
patchwork of state laws. In addition, if this change were made, and if they blatantly violated a
32

state law by failing to get a salvage title issued in their names, they would appear not to be in
violation of the federal law by not reporting to NMVTIS, because they would not have been the
‘titled owner.’ The opposite construction of ‘possession’ is crucial. In fact, the very example
they provide of a salvage vehicle that comes into their possession but that they do not title shows
how NMVTIS should work to be effective: they should report such vehicles. If there are
multiple reports on the same vehicle, there is no harm done; but if such salvage vehicles are not
reported, there is every harm done.” Other consumer advocates commented that “possession”
should be defined to include both actual and constructive possession and should include
exercising control over an automobile directly or indirectly.
Response: Limiting insurance reporting to those vehicles owned by insurance companies would
create a large loophole through which total-loss or salvage vehicles would remain under “clean
title.” Such a loophole was clearly not intended to exist under NMVTIS, and in order to provide
consumer protection against fraud, insurance carriers must be required to report on all vehicles
that they determine to be a total loss.
Comment: Several insurance-related organizations and associations commented that “[s]ection
25.55(b) sets forth the mandatory data elements. We believe that applying the following
interpretations will allow a reporting system to be put in place that complies with all aspects of
the statute, including the ‘least burdensome and costly’ directive and that can reasonably meet
the Court’s deadline in Public Citizen et al. v. Mukasey.
a. VIN. This can be reported.
b. The date on which the automobile was obtained or designated as a junk or salvage
automobile. Again, interpreting this requirement to mean the date on which the automobile was
re-titled ‘junk’ or ‘salvage’ comports with legal and practical considerations and would be most
cost effective.
33

c. The name of the individual or entity from whom the automobile was obtained or who
possessed it when the automobile was designated as a junk or salvage automobile. Again, as set
forth above, the only cost effective way for insurers to meet this obligation is to construe it to
mean the name of the insurer when the automobile was re-titled. Providing the name of the
individual or entity from whom the automobile was obtained does not provide useful information
to law enforcement or consumers.
d. The name of the owner of the automobile at the time of the filing of the report. In
most instances, this will be the buyer of the salvage or junk automobile, or the insurance
company when the insurance company retains ownership, for instance to crush a junk vehicle.”
Opposing this view, several consumer-advocate litigators commented that the insurers
suggest ‘that the regulations should provide that they do not have to report the name of the
person from whom a salvage vehicle was obtained. This is directly contrary to 49 U.S.C. §
30504(b)(3). The ownership trail of all of these vehicles is critical for law enforcement and
consumer investigative purposes, and Congress noted that by writing it into law.’”
The consumer-advocate litigators further commented that “[t]he Insurers also suggest
that the ‘owner of the automobile at the time of the filing of the report’ would normally be the
buyer of the salvage vehicle, and would only be the insurance carrier if it retained ownership to
crush a vehicle. I submit that it is important that both the buyer and the insurance carrier be
identified under the regulations.”
Response: DOJ agrees with the comments of the consumer-advocacy organizations and has
retained the total-loss reporting requirements that were included in the proposed rule.
Comment: Several commenters, including the NADA, ARA, Experian Automotive, the
National Salvage Vehicle Reporting Program, insurance services organizations, consumer
advocate attorneys, and others expressed strong support for DOJ’s “modernization and
34

clarification of language found in the Anti-Car Theft Act related to salvage and junk vehicles, to
include within this the requirement to report on all total loss vehicles, including those recognized
by the state and those not recognized by the state but determined a total loss by an insurance
carrier.” Several of these commenters also pointed out that many total-loss vehicles do not
receive salvage brands due to varied and unreliable state definitions and criteria. Relying on
state definitions of “salvage,” therefore, would be highly inconsistent, would perpetuate fraud
and theft, and would fail to accomplish the objective. Comments submitted by Amica Mutual
Insurance Co. underscore the need to collect “total loss” data. Such data provides additional
consumer protection, potentially decreases fraudulent activity, and reduces the number of unsafe
vehicles in the marketplace.
Response: DOJ agrees with these comments.
Comment: The NADA, ARA, National Salvage Vehicle Reporting Program, several national
consumer-advocacy organizations, and other organizations commented that the proposed rules
fail to require insurance carriers to report all vehicles that they declare a total loss, including
those retained by insureds. Often, individuals who retain possession of their “total loss” vehicle
can avoid disclosure, or they may not apply for salvage titles. The NADA commented that the
final rule should be revised to eliminate the concept of possession and instead focus on those
insured motor vehicles the insurance company declares, or the applicable jurisdiction defines, to
be a “total loss.”
Response: DOJ disagrees that the proposed rule puts such a limitation in place. DOJ requires
that insurance carriers who declare a vehicle a total loss and allow the insured to retain the
vehicle must still be required to report such declarations.
Comment: The NADA commented that “total loss” should be defined broadly to capture all
total-loss vehicles. “The final rule should not define ‘total loss’ in Section 25.52, but rather
35

should define ‘total loss motor vehicle’ as ‘those motor vehicles determined to be a total loss
under the laws of the applicable jurisdictions and those designated as a total loss by each
insurance company under the terms of its policies.’”
Response: DOJ appreciates this clarification and agrees that “total loss” includes all total-loss
vehicles.
Comment: ASPA commented that “When an automobile is classified as a total loss by an
insurance company, it does not necessarily mean that the automobile is a ‘salvage
automobile.’ On page 54546 of the Federal Register, in Section 2 ‘Insurance Carriers,’ the
explanation of the Proposed Rule expands the definition of ‘salvage automobiles’ when it states:
‘For purposes of clarification, the Department of Justice has determined that this definition
[salvage automobiles] includes all automobiles found to be a total loss under the laws of the
applicable jurisdiction or designated as a total loss by the insurance carrier under the terms of its
policies.’”
“In common usage, ‘salvage’ is not synonymous with ‘total loss.’ There are many
circumstances in which an insurance company may declare a vehicle a ‘total loss,’ but the
vehicle does not meet the ‘salvage’ definition of the relevant state. If a stolen vehicle is not
recovered quickly, the insured may be paid for the missing vehicle. If the vehicle is later
recovered in a largely undamaged condition, the vehicle, although a ‘total loss’ due to its late
recovery, may not meet the relevant ‘salvage’ definition and, often, is sold by the insurer with a
‘clear’ (i.e., not branded) title. The definition in the Proposed Rule lumps this undamaged theft
recovery into the ‘salvage’ definition, thus devaluing the vehicle and, again, creating confusion
about the applicability of the laws of the relevant state.”
ASPA further commented that “[m]ore generally, pursuant to 49 U.S.C. 30501(7),
‘salvage automobile’ is clearly defined as ‘an automobile that is damaged by collision, fire,
36

flood, accident, trespass, or other event, to the extent that its fair salvage value plus the cost of
repairing the automobile for legal operation on public streets, roads, and highways would be
more than the fair market value of the automobile immediately before the event that caused the
damage.’ This definition is both clear and unambiguous on its face and, therefore, requires no
‘clarification.’
In the Proposed Rule, the DOJ is attempting to expand the definition of salvage
automobile ‘[f]or purposes of clarification’ to include automobiles determined to be a total loss
under the law of the applicable jurisdiction or designated as a total loss by the insurer under the
terms of its policies. We contend that this significant expansion of the definition is not necessary,
and that the proposed definition actually contradicts accepted custom and usage within the
insurance and salvage industries.
The DOJ’s proposed amendment to the definition of salvage automobile would subject
many clear title automobiles to the reporting requirements of NMVTIS. This is problematic, and
is clearly not what Congress envisioned when it created the definition for salvage automobile. In
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the Court
implemented a two-part analysis to determine the appropriate standard of review towards a
government agency that attempts to amend statutory language. Here, since the current definition
of salvage automobile is not ambiguous, the proposed ‘clarification’ by the DOJ is not based on
a permissible construction of the statute and should not be allowed.”
Response: DOJ disagrees. Total-loss vehicles are just that – a total loss – at the time the
determination is made. Total-loss vehicles fall within the definition of “salvage” and must be
reported. In response to other comments, DOJ notes that insurance carriers are strongly
encouraged by the final rule to report to NMVTIS the primary reason for the determination of

37

total loss, addressing this commenter’s concerns specifically and providing much-improved
disclosure for consumers.
Comment: One submission argues for “the necessity of all states to adhere to the Uniform
Certificate of Title Act.” “ If the state has a different definition of a Salvage vehicle the
branding now becomes an arbitrary issue.”
Response: The Uniform Certificate of Title Act and the benefits of uniform titling procedures
aside, the Anti-Car Theft Act does not require states to adopt standard brand labels or
definitions. NMVTIS has a process in place to record each state’s unique brand label and to
relate it to one of the 78 brand types used in the NMVTIS database. The state’s brand labels and
definitions remain unchanged in NMVTIS.
9.

Chain of custody/names of those who provided/those who purchased.

Comment: One commenter noted that “[t]he reporting requirement of the junk and salvage
yards may need some change. There are many different routes for a vehicle to come into a yard,
very often it is not by the ‘owner of record’ or the titled owner. A more definitive approach to
recording the information of the entity placing the vehicle into the salvage yard should be taken,
more identifying information regarding the entity placing the vehicle into the salvage yard
should be captured. … How does the system handle this in a manner that will notify the title
state of a cancel record and provide a bona-fide chain of events leading to the yard?”
Response: The reporting requirement for junk and salvage yards applies to every vehicle
regardless of what “route” it took into the yard or who brought in the vehicle. Further, it is the
responsibility of the junk or salvage yard to provide, among other data, the name of the
individual or entity from whom the automobile was obtained. Existing state-level requirements
for junk and salvage yard operators to provide states with a notice of title or record cancellation
and any data fields required in such notifications are unaffected by the NMVTIS reporting
38

requirements. NMVTIS will not issue such notifications to states, but states will be able to view
the reported salvage or junk-yard status of any vehicle at any time. With the cumulative vehicle
histories constructed in NMVTIS, states and law enforcement can identify the “chain of events”
with reliability once there is full system participation.
Comment: One commenter noted that “stolen” designations or notifications sometimes are not
made when a vehicle is first reported stolen. In these instances, the commenter suggested that
law enforcement may receive a false negative response on a stolen check due to this delay. The
commenter suggested that the system provide a notification to law enforcement officers filing a
report on a stolen vehicle that a prior stop and “stolen” check was made on the vehicle,
providing notification and an investigative lead to the reporting officer of where the vehicle was
stopped and who made the stolen inquiry. Another commenter noted that stolen-vehicle
information is not required to be in NMVTIS, and nothing in the regulations requires a state to
check NCIC before issuing a title.
Response: NMVTIS is not intended or expected to replace the information or services available
to law enforcement through NCIC. NCIC is and will remain the primary system used and relied
upon by local law enforcement to check the “stolen” status of a vehicle. NMVTIS’s capturing of
“stolen” status and history information is to inform state titling agencies and others who may not
have access to NCIC that a vehicle was at one time reported as “stolen.” Stolen vehicle
information is included in NMVTIS via NICB so that states that do not have access to NCIC can
be apprised of a vehicle’s questionable status before issuing a new title.
Comment: The National Auto Auction Association commented that “NMVTIS should include
lien holder names and license plate numbers” for various reasons.

39

Response: While DOJ will authorize the operator to seek additional information for NMVTIS as
may be necessary to accomplish program goals, DOJ will not require these data fields to be
included in NMVTIS.
Comment: The National Auto Auction Association commented that DOJ should clarify in the
final rule whether data maintained in the NMVTIS central file is to be considered the official
legal record of a jurisdiction’s data.
Response: The official record for any vehicle will be determined by the state. However,
NMVTIS is expected to be a reliable source of title information that users can rely on to make
decisions.
10.

Brand definitions.

Comment: One commenter asked “[h]ow is the branding procedure determined? Is there a
preexisting national standard for what brands exist and how a vehicle is classified under such
brands or is the determination made on a state-by-state basis? If the standard is national (which
would make sense given the national objective), maybe a list of definitions of the applicable
brands should be placed in the rule’s definition section.” Another commenter noted that the
development of standardized definitions and brands for all states would be extremely beneficial
in ensuring that the intent of NMVTIS is fully recognized. Several state motor vehicle
administrations pointed out that the definitions of “salvage” and “total loss” in the proposed rule
are different from state definitions. Another commenter noted that to add information based on
the definitions in the proposed rule will conflict with state definitions of brands, compromise the
integrity of the NMVTIS database, and reduce the value of the information in the database.
Response: NMVTIS does not affect state branding procedures, and the Anti-Car Theft Act did
not require a national standard for branding. Although differing definitions may create
complexity in deciphering a vehicle’s brand history, NMVTIS will accept any official state
40

brand and will share that brand with other states, thereby relating that brand to a brand type or
“NMVTIS Brand.” Users of NMVTIS will notice state brands as well as a separate category for
insurance, junk, and salvage information, if any is available. The differences in these reporting
streams also will be defined so that users will know if a vehicle has been or is a junk or salvage
automobile by virtue of a state brand indicating such, or by an insurer’s determination that the
vehicle was a total loss. Consumers and others also will be advised if a vehicle has been in the
possession of a junk or salvage yard. Information is reported by multiple data sources and is
reported in a segregated fashion with links for explanations.
Comment: ASPA provided the following example as evidence of the problems that would be
created by the proposed rule: “Michigan’s salvage law covers current model year passenger
vehicles and those of the preceding five model years. Therefore, a 2002 passenger motor vehicle
does not become a ‘salvage vehicle’ or a ‘scrap vehicle’ in Michigan, regardless of the fact that
the vehicle has been damaged and ‘totaled’ by an insurance carrier. In this situation, Michigan,
when reporting to NMVTIS, presumably would not include the car in the state’s branded title
submissions. An insurance carrier reporting to NMVTIS presumably would not include the car
because it is outside of the age limitations applicable to insurance carriers. However, a salvage
yard or junk yard, using the definitions in the Proposed Rule, presumably would report the
vehicle as a ‘salvage automobile’ or a ‘junk automobile’, when reporting to NMVTIS. So, for a
state or other inquirer of NMVTIS, NMVTIS will show that the vehicle has a salvage or junk
history. This occurs regardless of the fact that the relevant state did not deem the vehicle salvage
or scrap.”
Response: This comment offers an excellent example of how NMVTIS reporting will fill the
holes that currently allow salvage or junk vehicles to remain unbranded, creating opportunities
for theft and consumer fraud.
41

11.

Brand washing.

Comment: One commenter asked “if brand information is already collected by states, how
exactly would brand ‘washing’ occur? If the retitling state checks the title of the previous state
wouldn't that information be included with the title?” Another commenter recommended that
NMVTIS retain a prior state’s brand history even when a state does not accept a previous state’s
brand.
Response: Brand histories or designations are not always carried forward by the states.
Retitling states do not necessarily check with the previous states before issuing a new title. In
some states, the paper title from the previous state of record is accepted as the basis for the new
title to be issued. Because of the reliance in some states on paper titles as evidence of prior
titling history, and because not all states check with the prior states of record, brand washing
occurs regularly. NMVTIS will create a nationwide brand history for every vehicle, requiring
that all states check with NMVTIS as opposed to simply relying on paper documentation. Brand
washing will be significantly reduced, if not eliminated. A state’s decision not to acknowledge a
prior state’s branding will not affect the NMVTIS brand history.
12.

Self-insurers included in the definition.

Comment: Several commenters expressed disappointment that self insurers were left out of the
rule. One commenter noted that the definitions should encompass a “self-insurer,” be it a
municipality, lease company, or large corporation, and that this is a current “hole” in the system.
Response: DOJ agrees that the Anti-Car Theft Act’s definition of “insurance carrier” includes
entities that underwrite their own insurance, such as certain rental car companies. The
definition, however, excludes any organization that does not underwrite its own insurance.
13.

Salvage automobile defined.

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Comment: One commentator noted that the definition of a “salvage automobile” should also
include any automobile that an insurance company has taken ownership of in settlement of a
claim and any vehicle that a state has issued a title to an insurer for. Another commenter noted
that “[t]he responsibilities of the insurance carriers should include, in the area of the reporting, if
the insurance company obtained a title from the state in their name, the state in which they
obtained it and the type of title.” Several consumer-advocacy organizations commented that
every automobile obtained by a salvage yard or junk yard that the salvage yard or junk yard
knows, or has reason to know, has come from an insurance carrier, or from any person or entity
in connection with the resolution of insurance claims, should be deemed as a salvage automobile
or junk automobile and must be reported as such. These commenters suggested that the rules
should provide for a presumption that any automobile obtained or sold by a salvage or junk yard,
and that has known unrepaired wreck or flood damage, is either a salvage automobile or junk
automobile, and that such a vehicle must be reported as such. Similarly, the rules should include
a presumption that any automobile obtained or sold by a salvage yard or junk yard, without
knowledge as to the automobile’s physical condition, is either a salvage automobile or junk
automobile, and must be reported as such. This would prevent salvage yards or junk yards from
maintaining an “empty head” to avoid compliance. The commenters suggested that “these
presumptions, (as to automobiles not obtained from insurers) can be overcome if and only if the
salvage or junk yard has qualified appraisal personnel employees or others acting solely on its
behalf, entirely independent of any other persons or entities, perform a good-faith physical and
value appraisal of the automobile and determine that the automobile does not meet the definition
of ‘salvage’ or ‘junk.’”
Response: Based on the proposed rule, a “salvage auto” is defined as ‘‘an automobile that is
damaged by collision, fire, flood, accident, trespass, or other event, to the extent that its fair
43

salvage value plus the cost of repairing the automobile for legal operation on public streets,
roads, and highways would be more than the fair market value of the automobile immediately
before the event that caused the damage.’’ 49 U.S.C. 30501(7).
For purposes of clarification, the Department of Justice has determined that this
definition includes all automobiles found to be a total loss under the laws of the applicable
jurisdiction or designated as a total loss by the insurance carrier under the terms of its policies.
By definition, this would mean that every automobile obtained by a salvage yard or junk yard
that the salvage yard or junk yard knows, or has reason to know, has come from an insurance
carrier, or from any person or entity in connection with the resolution of insurance claims,
should be deemed as a salvage automobile or junk automobile and must be reported as such.
DOJ does not agree that any automobile with unknown damage or any automobile obtained
without knowledge of its physical condition should be considered a junk or salvage automobile.
DOJ agrees that a junk or salvage yard may be excepted from reporting any vehicle that a
qualified independent appraiser determines does not meet the definition of a salvage or junk
automobile. This determination by the appraiser must be in writing and made after performing a
good-faith physical and value appraisal. Although not required, the Department recommends
that junk and salvage yards retain the reports and written appraisals for a period of ten years
from the date of the report. Additionally, a salvage auction or salvage pool that does not handle
any vehicles from or on behalf of insurance carriers is categorically exempted from this rule until
such time as they may handle a vehicle from an insurance carrier.
Comment: One commenter noted that the lack of common terms will undermine the clarity and
usefulness of the information provided: “How will NMVTIS reconcile the differences in law as
to what constitutes a ‘total loss?’ How will this undermine or effect achievement of
NMVTIS’[s] goals? How will NMVTIS reconcile the differences amongst insurance company
44

policies as to what constitutes a ‘total loss?’ How will this undermine or effect achievement of
NMVTIS’[s] goals?” The West Virginia Department of Transportation also commented that the
rule should establish a standard for establishing total loss as opposed to relying on the rules of
insurance carriers and states.
Response: NMVTIS will not attempt to “reconcile” differences in definitions. Rather, NMVTIS
recognizes that different definitions and criteria are in place within different insurance
companies and states. NMVTIS accepts these “native” determinations and notifies users that “X
company” or “X state” has made a determination that the vehicle is a “total loss,” “salvage
vehicle,” etc. NMVTIS will provide all users with full disclosure and explanation on the
differences in definitions and determinations and how this may or may not affect a vehicle.
NMVTIS’s mandate is to notify users of the determinations made in a vehicle’s history, not to
make such determinations uniform or conforming.
14.

Junk yard definition.

Comment: ISRI commented that it objects to the presumption in the rule that vehicle recyclers
operate only one of two things, a “junk yard” or a “salvage yard,” and suggests that DOJ clarify
the full scope of entities to be included under the general heading of “junk or salvage yards.”
Response: While DOJ relied upon the language in the Anti-Car Theft Act to describe the
category of required entities, DOJ acknowledges that the terms do not adequately reflect the
professional and varied nature of the vehicle-recycling industry. In general terms, any entity that
owns, controls, handles, or acquires salvage vehicles is included in the reporting requirements of
this rule, which is consistent with current business practices. Similarly, scrap-vehicle shredders,
scrap-metal processors, “pull- or pick-apart yards,” salvage pools, salvage auctions, and other
types of auctions handling salvage vehicles (including vehicles declared a “total loss”) are
included in the definition of “junk or salvage yards.”
45

Comment: ISRI also requested that new definitions of “scrap vehicle,” “scrap vehicle shredder,”
and “scrap metal processor” be added to the rule to exclude these entities from the reporting
requirement.
Response: DOJ has clarified the rule, but rather than eliminate the reporting requirements for
these entities, DOJ revised the regulations to establish an exemption that would cover prohibitive
reporting circumstances that these entities face.
Comment: One commenter argued that the definition of “junk yard” is too broad and may
unnecessarily include used car dealers and others who may rebuild vehicles with the intention of
reselling them. The commenter suggested that having such entities report these vehicles into
NMVTIS would potentially label these vehicles as “junk or salvage” and preclude the vehicles
from being retitled in some states.
Response: One of the main purposes of NMVTIS is to provide prospective purchasers and
others with reliable histories of the vehicles’ previous and current condition as it relates to
salvage and loss. Vehicles reported as having been in the possession of a “junk” or “salvage
yard” may not be viewed in the same way that vehicles with a “junk” or “salvage” brand may be
viewed in state titling processes. Each state will continue to make its own determinations
regarding vehicle titling based on state law. Although any individual or business engaged in the
business of acquiring “junk” or “salvage” automobiles (which includes motor vehicles
determined by an insurance carrier to be a “total loss”) generally must by law report such
vehicles to NMVTIS, although there are two exceptions to this requirement. First, an
automobile that is determined to not meet the definition of salvage or junk after a good-faith
physical and value appraisal conducted by a qualified independent appraiser is not required to be
reported. Second, DOJ has added a clarification that individuals and entities that handle less

46

than five salvage or total-loss vehicles per year need not report under the salvage-yard
requirements, which is consistent with existing standards that used car dealers are familiar with.
Comment: Many commenters, including Iowa Attorney General Thomas J. Miller, noted that the
inclusion of salvage pools in the reporting requirements for junk and salvage yards “will help
close a significant loophole” and will “further deter fraudulent used car sales, vehicle theft” and
other crimes.
Response: Requiring salvage pools or auto auctions to report on salvage or insurance claim
vehicles will increase the effectiveness of the program, ensuring that consumers and others are
not defrauded by sellers who conceal salvage or “total loss” histories.
Comment: Several commenters, including the ISRI, the Virginia Department of Motor Vehicle
Administrators, and other industry associations and representatives, commented that the
proposed rules do not clearly indicate that scrap-metal processors, shredders, pull-apart yards,
and others who often receive and demolish many end-of-life vehicles are included in the
reporting requirements.
Response: The regulations have been revised to clarify that the definition of junk and salvage
yards includes not only salvage pools, but also scrap-metal processors, shredders, pull-apart
yards, and others who handle or control total-loss, junk, or salvage automobiles, otherwise
described as end-of-life vehicles.
Comment: ASPA commented that DOJ should recognize that VIN inspections conducted in
most states would make a salvage automobile an unattractive choice for criminals, and that
cloning a salvage vehicle would result in the cloned vehicle having a “salvage” branded title.
Response: DOJ recognizes that some states require vehicle inspections upon retitling, and some
states place a “brand” on salvage vehicles. In these states, a salvage vehicle may not make an
attractive choice for VIN cloning. However, not every state has these requirements, and VIN
47

inspections typically do not inspect or verify hidden VINs. As a result, cloned vehicles go
undetected. Even electronic diagnostic modules that would otherwise display the VIN can be
defeated, allowing the clone to be virtually undetectable. Most often, the criminal activity that
DOJ referred to in the proposed rule is related to total loss or “end-of-life” vehicles that are
purchased because they have a “clean title” which is then fraudulently connected with a stolen
vehicle, which “clones” the stolen vehicle to the non-stolen, “clean title” vehicle. Because the
non-stolen vehicle was destroyed and sold to an individual, it no longer appears on the road and
no notification of its destruction may made to the current state of title.
Comment: Copart, Inc. argued that because salvage pools do not own the vehicles sold at
salvage pools or auto auctions, and therefore by definition do not “resell” them, they do not meet
the definition of salvage yard and are therefore not required to report. Copart further contended
that salvage pools should be required to report only those vehicles that they purchase for resale,
and that any other interpretation goes beyond the plain language of the statute.
Response: DOJ disagrees with this interpretation and notes that salvage pools do in fact handle
and cause to be resold (on behalf of their current owner who “bought” the vehicle from another)
salvage and total loss vehicles.
Comment: Copart, Inc. argued that salvage pools do not typically have access to the information
needed to determine whether a vehicle meets the NMVTIS definition of junk vehicle or salvage
vehicle. Copart further contended that junk and salvage yards should only be required to report
to NMVTIS those vehicles sold on a salvage or junk certificate under applicable state law.
Response: Allowing junk and salvage yards to report only on vehicles with salvage titles would
perpetuate the problems described elsewhere, including fraud and theft. Nonetheless, DOJ has
addressed this issue in the definition of a “salvage auto” that now includes exceptions for
vehicles that are not salvage, including total-loss vehicles.
48

Comment: Copart, Inc. argued that requiring salvage pools to report to NMVTIS is wasteful and
duplicative because they function as an intermediary between other entities that are required to
report, such as insurance carriers, dismantlers, and scrap-metal processors.
Response: Criminal organizations exploit salvage-pool services, purchasing total-loss vehicles
with “clean titles” to facilitate the cloning and resale of stolen vehicles. To address this issue,
law enforcement and other organizations require information on the vehicles handled by salvage
pools. Additionally, many if not most vehicles sold by salvage pools do not end up in a junk or
salvage yard, and not all vehicles sold by salvage pools, including those with significant damage,
are determined to be a total loss by insurance carriers. For these reasons, it is essential that
salvage pools report to NMVTIS.
Comment: Copart, Inc. argued that DOJ should interpret “junk yard” and “salvage yard” to
include all vehicle auction companies so as not to discriminate against “salvage pools” that sell
both clean titled and salvage vehicles.
Response: All vehicle auction companies should not be required to report on all vehicles handled
or in their inventory. Instead, those organizations that handle or resell vehicles on behalf of
insurance carriers after a determination of total loss, regardless of salvage title, should be
required to report. This should hold true regardless of whether the entity operates as a “salvage
pool” or refers to itself as an “auto auction,” “salvage auction,” “abandoned-vehicle auction,”
“tow-lot auction,” “scratch-and-dent” sale or auction, etc. As the National Salvage Vehicle
Reporting Program noted, “the recommended guideline for determining that an entity is required
to report … should be if the entity owns or acquires, [or handles] total loss/salvage vehicles in
whole or in part.” Under such circumstances, it should be required to report all vehicles to
NMVTIS. DOJ will clarify this requirement in the final rule.
15.

Salvage brand.
49

Comment: One commenter noted that “[i]f the NMVTIS project is to succeed it would be a
reasonable assumption to require a uniform approach to the assignment of the ‘salvage’ brand by
any member state. The system is only as good as the data in it, if the data is not applicable to
uniform situations there will always be discrepancies.”
Response: A uniform approach to branding would be advantageous in many respects. The AntiCar Theft Act, however, does not provide the authority for DOJ to develop or mandate uniform
branding, which would be a significant and potentially costly change for states to implement. As
each state makes its own determinations, and NMVTIS relates state brands to an aggregated
brand or brand category within NMVTIS, the non-uniform approach does not create an
insurmountable problem. DOJ will ensure that those who access NMVTIS information have the
opportunity to learn about the different state brands that exist and the impact of other reporting
on these brands to create greater awareness and understanding of their meaning.
16.

Definition of automobile.

Comment: NAEC argued that the rule should require the inclusion of “trucks, SUVs and other
non-automobiles as prescribed by the Federal Anti-Car Theft Act for Parts Marking” because of
their popularity with vehicle thieves. Other organizations, including the Idaho Transportation
Department, contended that “NMVTIS records should also include all vehicles that a state may
title, and not be limited to standard types of vehicles.” The Minnesota Department of Public
Safety stated that if it is required to report on all vehicles in its database, “it might well grind to a
halt” and costs would increase considerably.
Response: Although DOJ cannot extend the Act’s definition to include all motor vehicles, it is
important to note that many states currently include such vehicles in their reporting to NMVTIS.
DOJ strongly encourages this continued reporting practice in light of supporting comments, the
value to law enforcement, and to protect citizens against fraud and theft. Moreover, it may be
50

more costly or burdensome for states to filter out those vehicles not meeting the statutory
requirement than to submit all motor vehicles to NMVTIS.
Comment: One commenter recommended that DOJ clarify when a vehicle is no longer a vehicle
for purposes of reporting, especially in junk or salvage yards that often do not receive a complete
vehicle.
Response: DOJ offers two clarifications in response to this comment. First, a vehicle is thought
to be present for reporting purposes when a vehicle frame is present. Similarly, in cases where
questions as to the “true VIN” of a vehicle arise, DOJ has determined that the true VIN for
NMVTIS’s purposes is the VIN on the frame of the vehicle.
State Responsibilities
17.

Start dates.

Comment: In reference to the proposed June 1, 2009, start date for state reporting and inquiries
into the system, several states and AAMVA noted that the states would have difficulty meeting
this date. One state commented that “[t]he requirement to budget, upgrade and work to complete
compliance requirements for NMVTIS cannot be met by this timeline – it is simply not doable
even with the political will and funds available. To arbitrarily select a date that is not workable
in any manner is unfair and unrealistic.” Other commenters noted that it would take time to
accomplish the necessary statutory and regulatory changes that may be required, and that their
states had not budgeted for NMVTIS and could not pay NMVTIS fees in light of current
economic circumstances. AAMVA further commented that DOJ should establish a process for
approving “temporary exemptions from the deadline where a reasonable timeline for compliance
is presented and approved by the Department.” The State of California proposed a “phasing in”
of participants. The dates proposed by states as alternative start dates ranged from 2010 to “1
year from the date funding is secured” by the state.
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Response: Although DOJ has worked closely with the system operator to reduce the need for
state system modifications, and although the requirements of the Act have been in place since
1992, DOJ understands that it will take time for states to implement some provisions of the
regulation. To provide relief in this regard, DOJ has elected to extend the compliance date for
states to January 1, 2010. By this date, all states and the District of Columbia will be required to
provide daily title transaction updates to NMVTIS, make inquiries into NMVTIS before issuing
a title on a vehicle coming in from out-of-state, and paying any user fees that may be billed by
the operator. The Department believes that the states can comply by that date. Similarly, DOJ
has decided against a “phasing in” approach to state participation commencement because there
is no equitable way of selecting phasing dates and participants in each phase. DOJ points out
that most of the provisions required to be implemented by January 1, 2010, are essentially the
same requirements that have been a part of the Anti-Car Theft Act since either 1992 or 1996, and
states, therefore, have had at least twelve years to implement the provisions of the Act. Thirteen
states have already done so without regulations in place.
Comment: One commenter noted that the proposed start date is just prior to an AAMVAannounced decision to continue as the operator of the system and therefore creates a conflict for
states should AAMVA decide not to continue as the operator.
Response: AAMVA has assured DOJ that should a decision be made in August of 2009 to
discontinue its role as the operator, AAMVA will continue to provide transition services and
continuity until a new operator is identified and is able to assist states that rely on NMVTIS in
their daily operations.
Comment: One commenter asked how the proposed start date had been determined and
requested justification for the date. The commented wrote that in the absence of this
justification, the date appears arbitrary. The State of Illinois motor vehicle administration
52

maintained that “the proposed timeframe for implementing the NMVTIS program under these
rules is unrealistic to the point of being absurd.” Although that Illinois agency conceded that the
start date was likely driven by ongoing litigation and a court order, the commenter noted “that
[the] order is either currently under appeal and a stay of enforcement should be sought pending
appeal, or the Department of Justice [may have] chose[n] not to seek an appeal.”
Response: The proposed start date was chosen after an analysis of historical timelines to provide
batch data to the system, the number of states that currently have implementation funding from
DOJ either directly or through AAMVA, the number of states that have indicated previously that
they were working towards implementation already, and an expected release of stand-alone
access to facilitate title verifications. As noted previously, however, the Anti-Car Theft Act has
been in place for over 16 years, and many states have already implemented the provisions
beyond the minimum specifications. Finally, the court order does not affect the stateimplementation date in any way, and in fact is not even mentioned in that order.
Comment: Several state motor vehicle administrations asked what penalties are in place for
states that do not implement prior to the required start date and what provisions will be made for
jurisdictions that are in process or intend to implement at a later date.
Response: While DOJ will place its priority on supporting state implementation, DOJ would
review state refusals to participate to determine the proper response. DOJ also will work with
state officials in support of NMVTIS to encourage state compliance. This outreach could
include contacts with state legislatures, governors, consumer-action networks, and lawenforcement associations.
Comment: One commenter suggested that DOJ publish a map of participating and nonparticipating states, so that citizens can observe the participation status of every state.

53

Response: DOJ will make this map available on www.NMVTIS.gov and also will notify every
consumer that accesses the site which states are not participating.
Comment: The State of Alaska commented that “there should be a process in place that allows
states to continue to issue titles when NMVTIS is not operational during states’ normal business
days and hours.” Alaska recommended that states be permitted to “issue titles when NMVTIS is
not operational, hold the inquiries in a queue and submit the queued inquiries when NMVTIS is
operational. If a problem is detected with a title, it would be revoked.” The State of Illinois
commented that standards of performance should be established to address these issues.
Response: While NMVTIS is typically only down for various reasons between 1:00 a.m. and
6:00 a.m. Eastern Time and one Sunday morning each month, there are processes in place for
unexpected down time during state business hours. While specific processes vary by state
according to state business processes, there are methods of continuing offline, such as mailing
the new title at a later time, issuing a temporary title, etc. DOJ cannot alter the Anti-Car Theft
Act’s requirement to make a NMVTIS inquiry prior to issuing a new title. Therefore, new titles
should not issue when NMVTIS is unavailable. Current system response time is less than 3
seconds per inquiry, and the number of unexpected system down times has been minimal. DOJ
notes that the NMVTIS connection has not been “down” for 30 minutes or more at any time
during the last three years, demonstrating that it is a reliable connection and service.
Comment: A state motor vehicle administration agency suggested that the requirement for an
“instant title verification check” is problematic for states that do not issue titles over-the-counter.
The commenter suggested that the word “instant” be removed from the final rule.
Response: Some states do not issue titles “instantly.” The “instant title verification check,”
therefore, may take place after the customer has left the title administration agency but before a
new title is issued. In these cases, states may make the NMVTIS inquiry when appropriate in the
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titling process, so long as the inquiry is made and title verified before a new permanent title
issues.
Comment: One commenter asked if a title-verification check would need to be performed on a
state title that was being reassigned after being purchased from an out-of-state dealer.
Response: It is unclear from the comment if the commenter was referring to a title being
transferred out-of-state or into the state. States are required to check incoming titles related to
vehicles from out-of-state. States are not required to check titles being transferred out of the
state. With regard to the need to verify titles during dealer reassignment or the transfer of
vehicles from one dealer to another, the Act requires that states verify the title of any automobile
coming from another state, which DOJ has determined includes dealer reassignments when
involving dealers in different states.
Comment: One commenter argued that the system should provide state motor vehicle titling
agencies with sufficient information to resolve discrepancies during the title-verification process.
Response: NMVTIS provides state motor-vehicle-title administrations with all relevant data in
the system and a seamless and secure electronic connection to other online state title records.
NMVTIS will make available any additional information within NMVTIS that may be needed to
resolve such discrepancies. In the last year alone, the system generated 45 million secure
messages and notifications and make 18.4 million update transactions.
Comment: One commenter noted that information gleaned from a state’s “instant title
verification,” such as reports of prior removal of a vehicle from the vehicle population by export,
destruction, reported existence in a salvage/junk yard, or other indication that the vehicle should
not be present, should result in a physical inspection of the vehicle to determine the validity of
the title and the vehicle.

55

Response: While DOJ agrees that such reports or results will flag for states the title transactions
and vehicles that should be further reviewed prior to undertaking a new title transaction, DOJ
cannot require such inspections. It is each state’s responsibility to institute policies and
procedures for resolving such concerns. This comment does illustrate how NMVTIS can “flag”
for states those vehicles and transactions that should be carefully reviewed to prevent fraud and
theft.
Comment: One state motor vehicle administration asked how NMVTIS will obtain data from
the insurance companies and junk and salvage yards.
Response: Insurance carriers, junk yards, and salvage yards are required to report the data
enumerated in the Act and regulations. The operator will identify more than one reporting
mechanism for electronic reporting, in a format prescribed by the operator. AAMVA and DOJ
will identify the official reporting mechanisms and processes via www.NMVTIS.gov.
Comment: The Nevada Department of Motor Vehicles complained that requiring states to
provide “the date the vehicle was obtained is an expensive and time consuming process” and that
states should be permitted to continue sending the title issue date instead.
Response: There is no requirement proposed for states to submit the date a vehicle was obtained.
This requirement is in relation to insurance carrier and junk and salvage reporting.
Comment: The Oregon Department of Motor Vehicles commented that it currently only collects
odometer information on those vehicles subject to federal odometer requirements and would be
burdened to collect such information on all vehicles. The National Salvage Vehicle Reporting
Program argued that states and insurers should be required to include mileage reporting in their
data provided to NMVTIS.
Response: States are only required to provide odometer information on those vehicles subject to
federal odometer requirements, 49 U.S.C. 32705, and not on all vehicles unless already recorded
56

by the state. States are required to provide to NMVTIS the most recent odometer reading for
such vehicles and any later odometer information contained within state title records. DOJ
strongly encourages all reporting entities to include odometer readings where available.
Comment: One commenter recommended that the final rules spell out what is actually required
from the states and how (i.e., in which format) this information is to be provided. Another
commenter, the California State Motor Vehicle Title Administration, recommended that the rule
be revised to require information that is consistently available across all states and that only
information held by state titling agencies be subject to reporting requirements.
Response: DOJ will clarify what is required of each state and will describe format issues to the
extent practical and appropriate. DOJ cannot simply choose to use only information that is
available in every state consistently for purposes of populating the system, as doing so would
limit the included data and significantly reduce the system’s value.
Comment: One commenter recommended that DOJ require that the operator be responsible for
developing at least two approaches for NMVTIS inquiries and that DOJ should prepare a cost
study relating to the expenses associated with the fully integrated, online approach to
compliance.
Response: There are already at least two approaches for state compliance with NMVTIS: 1) a
fully integrated, online approach, whereby a state’s title information system automatically
queries NMVTIS, and NMVTIS provides real-time updates to both states involved in the
transaction; and 2) a stand-alone approach, whereby title clerks send inquiries to NMVTIS via a
web access point and their state sends daily updates through a batch upload. A third option,
serving central site states, entailing a process whereby verifications are performed via batch
inquiry, will be explored and may be implemented soon. However, DOJ disagrees with the need

57

to prepare a cost study because an extensive cost-benefit study of this issue already exists, and
cost data from other state implementations is already available for estimation purposes.
Comment: The NADA and at least one state motor vehicle administration commented that DOJ
should clarify that states are required to submit all brands to NMVTIS for all automobiles titled
within the state.
Response: DOJ agrees and has clarified this requirement under 25.54 (a) (2), consistent with
statutory requirements.
Comment: The Minnesota Department of Public Safety argued that states should be required to
provide title numbers, “since it would be nearly impossible to establish the ‘validity and status’
of purported titles without them.”
Response: Participating states already have access through NMVTIS to observe the full title of
record, including the title numbers and other information needed to establish the validity and
status of titles presented. However, DOJ encourages the states to voluntarily submit that
information to NMVTIS with the approval of the operator and the Department.
Comment: The Minnesota Department of Public Safety commented that “the proposed rule also
would require states to provide ‘[t]he name of the state that issued the most recent certificate of
title’ and ‘[t]he name of the individual or entity to whom [it] was issued’ when making an
inquiry to NMVTIS. This information is not, and cannot be, recorded in MnDVS’ current title
information system.”
Response: This language was taken from the Anti-Car Theft Act to describe what information
would be needed in order for states to make an inquiry into NMVTIS. Since the passage of the
Anti-Car Theft Act, and with the very recent development of a standalone access model that only
requires a VIN to search, these requirements have changed and this information is no longer

58

needed. At the present time, only the VIN is needed to make an inquiry. This update will be
reflected in the final rule.
Comment: The West Virginia Department of Transportation argued that some states exempt
vehicles that reach a certain age from the requirements of titling, and that these vehicles should
be exempt from reporting.
Response: The rule requires states to report on all automobiles included in the states’ titling
systems, regardless of age. However, if state law exempts certain vehicles from titling, those
vehicles need not be reported to NMVTIS. The state should make the operator aware of these
exceptions, however, so that consumers in the state and in other states are advised of this
exception, which they may take into account when checking the history of vehicles through
NMVTIS.
18.

Unfunded mandate.

Comment: Commenters argued that the mandate for NMVTIS has not been funded, and that the
requirement for compliance has not been applied or enforced for the fifteen years of this process.
On the other hand, one commenter noted that NMVTIS is not an unfunded mandate in view of
DOJ’s investment of over $15 million in the system since its inception and DOJ grants to states
to support system participation.
Response: The Anti-Car Theft Act explicitly requires that user fees sustain NMVTIS rather than
federal funding. Although no funds have been appropriated to DOJ for NMVTIS, DOJ has
invested over $15 million in NMVTIS, with a substantial portion going to states to assist them
with compliance. The U.S. Department of Transportation previously provided funding during
the period it was responsible for the system through 1996.
Comment: One commenter noted that DOJ’s determination that the rule does not meet the
threshold cost or burden requirements of the Unfunded Mandate Reform Act of 1995 is not
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sufficient in and of itself to satisfy the legal responsibilities. Specifically, the commenter noted
that “[t]he fact that the Department of Justice (DOJ) has decided that it is a small enough amount
of money that the Unfunded Mandate Reform Act of 1995 does not apply, or that the DOJ has
determined that per Executive Order 13132, the cost imposed does not provide sufficient cause
for a Federalism issue, is not sufficient.”
Response: The Department of Justice, based on its own analysis, made appropriate
determinations based on law and regulation. The White House Office of Management and
Budget reviewed and approved this analysis.
Comment: The City and County of Honolulu Division of Motor Vehicle, Licensing and Permits
disagreed with the aggregate amount estimated by DOJ in the “Unfunded Mandates Reform Act
of 1995" section of the proposed rule “because their estimate is based on the less expensive
standalone web solution which operationally degrades customer service and increases the work
of our over-the-counter staff.” The commenter further noted that the aggregate amount should
“factor in the development and deployment of the much more costly integrated on-line solution
option that will ultimately be the final solution that states will move towards” and should include
the additional costs that will result “from the increased load on the system to each jurisdiction
when all jurisdictions, insurance companies, salvage yards, consumers, law enforcement, etc. are
given access to the system.” The commenter concluded by stating that using this methodology,
the aggregate costs will “easily exceed the $100 million resulting in the applicability of the
Unfunded Mandates Reform Act.”
Response: The methodology employed to calculate the aggregate costs of the program uses the
minimum requirements for system participation. DOJ sees no purpose in using a level of
participation not required by DOJ as the basis for the cost calculations. While states ultimately
may move towards an integrated, online solution for efficiency, and although this method of
60

participation does benefit NMVTIS, DOJ does not require it for compliance. It is DOJ’s
responsibility to determine the least costly, most effective way for implementing the solution,
and that is the methodology used in the proposed rule. Further, a fully implemented system,
with all jurisdictions, insurance carriers, junk and salvage yards, consumers, and law
enforcement personnel accessing and reporting, does not translate directly into an increase in
costs for states. In fact, it could very well decrease state costs through offset fees.
Comment: The City and County of Honolulu Division of Motor Vehicle, Licensing and Permits
further maintained that because the combined City/County government is a “small” government,
it is uniquely impacted by the regulations and is entitled to relief. Additionally, this commenter
contended that the operator’s requirements for extracting and mapping the required data are
burdensome, and that should the operator undertake these responsibilities, batch data submission
would be much easier to achieve.
Response: The Unfunded Mandates Reform Act and 5 U.S.C. 601(5) define “small
governmental jurisdiction” generally as rural jurisdictions, those with populations under 50,000,
and areas of limited revenues. Based on this definition, the city/county identified by the
commenter would not appear to qualify as a “small governmental jurisdiction.” In terms of the
operator’s requirements and the burden associated with such requirements, DOJ will continue to
direct the operator to provide as much flexibility in requirements as is feasible, and DOJ will
continue to provide technical assistance upon request to identify alternative solutions where
necessary.
19.

Inquiring into NMVTIS versus other systems.

Comment: More than one state motor vehicle administration commented that NMVTIS will not
provide a more substantial benefit than checking third-party vehicle history databases which
some states already check. One state motor-vehicle administration suggested that the law was
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unclear as to whether the Anti-Car Theft Act required states to check NMVTIS or another thirdparty database, stating that “[t]he previous intent was to provide a system that a state may utilize
to verify title before titling a vehicle. This left open the use of other systems, such as Carfax, to
research titles. The requirement to mandate use of NMVTIS to verify titles is unrealistic,
unworkable and unfair. The intent of the process is to protect citizens against fraud. NMVTIS is
not the only system that supports this intent. Limiting research to this system could also lead to
misinformation and misapplication of process.”
Response: The Anti-Car Theft Act requires states to verify titles through NMVTIS. No other
system, public or private, can provide the same level of assurance as NMVTIS once full
compliance is reached. DOJ also points to comments submitted by several organizations that
highlighted concerns with the reliability of third-party databases. States wishing to provide
increased protections for consumers are encouraged to continue to check such private databases
in addition to making the NMVTIS inquiry as required by Federal law.
Comment: One commenter noted that “the fully implemented system . . . will also provide
consumers with a source of comprehensive information. Current services such as Carfax have
partially filled the need for information, but these providers do not offer as current and complete
titling information as the proposed NMVTIS system.”
Response: NMVTIS provides a unique service in terms of the source of its data, its
comprehensiveness, and its timeliness. Services such as CARFAX will continue to provide
information to the public that is not intended to be included in NMVTIS, such as vehicle repair
histories, etc. For this reason, these private services will continue to offer unique and beneficial
services.
20.

Time lags.

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Comment: Several commenters noted that allowing states to upload data (e.g., batch uploading)
may create a “time lag” that could impact law enforcement investigations and impede the ability
of the system to accomplish its goals. One commenter suggested that it would be better to wait
until states secure the necessary funding before proceeding with implementation.
Response: DOJ has examined this issue closely with the system operator and with third-party
vehicle-history providers. While many third-party databases experience lag time of several
weeks or months in getting state updated data, NMVTIS is designed to significantly reduce or
eliminate the lag time entirely to provide reliable information to users. For this reason, states
choosing the stand-alone method of participation and batch uploads will be required after initial
set-up to establish batch updates at least every twenty-four hours. This requirement will greatly
diminish the possibility of exploitation of lag time and provide a more up-to-date vehicle history
check than is currently available. States do have the option of implementing in fully online
mode where data transmission is in real time. DOJ does not have the flexibility to delay
implementation until states have funding to implement the fully online mode. Pursuant to a
federal district court order, DOJ is required to have the rules published and system available by
January 30, 2009.
Comment: One state motor-vehicle administration noted that when using the stand-alone
method of making inquiries before issuing a new title on out-of-state vehicles, an impact on
customer service is expected. Specifically, the commenter stated that an additional “three to five
minutes of processing time” is expected due to the fact that title clerks in this administration are
using a mainframe that does not allow simultaneous internet access, and that to make such a
check, the clerk would have to log out, make the NMVTIS inquiry, and log back in to the
mainframe for each out-of-state title transfer.

63

Response: The lower cost stand-alone method of participation is not as timely as the fully
integrated online method. DOJ is committed to working with states and the operator to identify
new alternative methods to reduce or eliminate such inefficiencies, such as dedicating one
internet-capable PC that could be available to all clerks with the NMVTIS page continuously
running. With system response time currently at 3 seconds or less, this alternative may impact
customer service less. Ultimately, however, although the stand-alone method of making
inquiries is far less costly for states to implement, it may be less efficient than the fully
integrated, online method.
Comment: One state motor-vehicle administration recommended that “all surrendered titles
should be verified when being transferred[,] and the rule should not limit this requirement only
to ‘purchased’ vehicles. Without verifying all surrendered titles it is not known whether the title
surrendered is the latest title issued[,] and there are many reasons titles are transferred other than
through a sale.”
Response: DOJ agrees with this recommendation and notes that the final rule clarifies that the
requirement to make verifications pertains to any title or vehicle coming in from another state,
including transfers. States are also strongly encouraged to perform such verifications on every
title transaction, which most effective when implementing via the online, integrated approach.
Comment: One state motor vehicle administrator asked if manufacturers’ certificates of origin
(MCO) must be verified as well.
Response: Because MCOs are not vehicle titles per se, states are not required to verify MCOs in
NMVTIS. However, DOJ strongly recommends that state motor-vehicle administrators make
inquiries on all title transactions, including initial registration of an MCO, to identify and
eliminate fraud and to protect consumers.
Insurance carriers.
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21.

Reporting on recent-year vehicles.

Comment: One commenter asked “[w]hat is the reason to require insurance carriers to report
only vehicles manufactured within the past five model years that they consider junk or salvage?
If these vehicles will always go directly to junk or salvage yards, won't the vehicle be reported
there anyway? Conversely if there is an opportunity for other disposal of the vehicles, shouldn't
the insurance carriers be required to report all vehicles since the VINs could still be stolen for
swapping?” Other commenters noted that vehicles older than five years are often involved in
consumer fraud and encouraged provisions for the database to cover the same ten-year age range
as is used for odometer reporting.
Response: The Anti-Car Theft Act only required insurance carriers to report vehicles in the
current and four prior model years. DOJ is not able to reverse or alter this limitation by
increasing the reporting parameters. Junk and salvage yards later may report some vehicles that
insurance carriers are not required to report. The Department, however, encourages insurance
carriers to report older vehicles.
Comment: ASPA commented that section 25.55 (b)(3) of the proposed rule requires insurance
carriers to report “the name of the individual or entity from whom the automobile was obtained
or who possessed it when the automobile was designated as a junk or salvage automobile,”
which would seem to be two different individuals or entities in most cases. Further, ASPA notes
that it is unclear if the insurance carrier would know the name of the owner when it files the
report.
Response: Although the proposed rule required reporting of the name of the individual or entity
either from whom the automobile was obtained or who possessed it when the automobile was
designated as a junk, salvage, or total-loss automobile, the Anti-Car Theft Act specifically states
that both names are required. Reporting both names is necessary to establish a “chain of
65

custody” and for other law-enforcement and consumer-protection purposes. DOJ changed this
language in the final rule to require both names pursuant to the Anti-Car Theft Act. In reference
to the concern that insurers may not know the name of the owner, most carriers do possess this
information, as this would be the owner(s) of the automobile at the time the vehicle was
determined a total loss, salvage, or junk.
Comment: Farmers Insurance commented that the “trigger” for insurance-carrier reporting
should be when the insurance carrier sells the vehicle or when the customer determines it will
retain ownership of the vehicle, because such dispositions may not be known for as much as
ninety days after the loss occurs.
Response: Because disposition may not be known at the time of initial reporting, this rule allows
the insurance carrier to file a supplemental disposition or update. Many comments emphasized
the importance of timely reporting, even when the named owner in the initial report is the
insurance company.
Comment: Farmers Insurance suggested that a twelve-month grace period should be granted for
insurance reporting to begin in light of “proper system upgrades” that may be required.
Response: DOJ is not able to provide a grace period, as the court has ordered the reporting to
begin by March 31, 2009. Additionally, because DOJ aims to enable third-party reporting
through organizations that may already receive such data from insurance carriers, the burden of
any system changes should be minimal.
22.

Non-required data.

Comment: One commenter argued that “[t]he proposed rule overstates the benefits provided to
consumers. Particularly, the fact that insurance carriers are only ‘strongly encouraged to provide
. . . other information relevant to a motor vehicle’s title’ undermines the broad benefits implied
by the rule.” “The type of information not reported includes the reason why the insurance carrier
66

may have obtained possession of the motor vehicle – flood, water, collision, fire damage, or
theft.” The NADA further recommended that the rule should require insurers to report the
reasons they obtained possession of the vehicle to prevent brand washing and fraud.
Additionally, this information would assist in cases where a vehicle is considered a total loss for
purely economic reasons (e.g. theft). Several insurance-related organizations contended that for
any voluntary reporting that may be contemplated, immunity provisions must apply to this
voluntary reporting as well.
Response: DOJ disagrees that the rule overstates the benefits of NMVTIS. DOJ does agree,
however, that the reason for the total-loss or salvage designation by insurance carriers may be of
importance to a prospective purchaser and to others. Not only does this protect the consumer’s
interest, but the additional reporting criteria also benefit insurance carriers. Therefore, the
Department strongly encourages insurance carriers to report this data element.
Comment: AAMVA commented that unless the rule requires “junk and salvage dealers” to
report the percentage of damage sustained by each vehicle in their inventories to the states, the
states would not be able to consider applying a state junk or salvage brand on these vehicles.
Response: States will not be in a position to make such judgments based on junk- and salvageyard operator reporting. Insurance carriers have ready access to this information, which is the
typical basis for a state’s designation. Although the reporting of junk- and salvage-yard
inventories was likely not intended to support state-branding decisions, reporting of junk and
salvage yard inventories may be helpful to states in making brand decisions, but likely not
conclusive. Although such vehicles may not end up branded by the states, consumers and other
states have the benefit of knowing that the vehicle was in the possession of a junk or salvage
yard and therefore may wish to inspect the vehicle or to require an inspection before making

67

purchase or titling decisions. DOJ is not in a position to require reporting of the percentage of
damage. However, insurance carriers and others are encouraged to report this information.
Comment: One commenter asked “[h]ow will DOJ know which states, junk, salvage, and
insurance companies are reporting information and reporting all the information that is required?
Will someone audit their reports? I recommend that the system operator and the DOJ both make
a list of who is reporting and publish that list . . . and audit reporting compliance.” The
commenter also suggested that DOJ require entities to report the company name, address, and
phone number for any reports submitted. Another commenter asked who would inform
insurance carriers and junk and salvage yards of the requirement to report information to
NMVTIS, and who would identify those organizations required to report.
Response: DOJ will instruct the operator to publish and maintain a list of the entities reporting
information to NMVTIS. The list will include the name of the reporting entity, city and state of
the reporting entity, the date that data was last submitted by the entity, and any contact
information for the reporting entity. With regard to who would inform reporting entities of the
requirements, DOJ will work with the operator, state-licensing authorities, and affected
associations and advocacy organizations to ensure proper outreach and education.
Comment: Several state motor-vehicle administrations argued that DOJ should limit what nonrequired data the operator could ask for and receive (e.g., address of the vehicle owner). Another
believed that the value of encouraging non-required data is unknown, and that reporting may
only increase the number of discrepancies or errors. ISRI contended that DOJ should limit the
ability of the operator to request additional, non-required data, because the current operator
would be encouraged to request additional information that would generate revenues to the
benefit of the association and its members, creating a conflict of interest. The Minnesota
Department of Vehicle Services (MnDVS) argued that the provisions of section 25.53(c), which
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allow the providers of non-required data to query the system if beneficial in addressing motor
vehicle theft, “exceeds the authority conferred by Congress, is overly broad, and as such
represents an arbitrary and capricious exercise of rulemaking power.” Other commenters,
however, reported that other data may be needed for specific purposes and argued in support of
this flexibility.
Response: It would be difficult to describe what data the operator is restricted from asking for or
accepting, other than social security number, dates of birth, and address. DOJ points out that
States need not provide data that is not specifically required in these regulations or the Act, and
DOJ will need to approve the acceptance of non-required data. Moreover, the non-required data
that is readily available would add great value to some consumers, to law enforcement, and to
others (e.g., NICB flood vehicle database, vehicle export data, other North American vehicle
history records, NICB theft file, etc.). While more data always increases the chances of
discrepancies, DOJ does not want to discourage this voluntary reporting. While the current
operator does have the best interest of its membership in mind, however, it also has expressed
concern for others affected by the rule and will represent the concerns of all stakeholders, not as
a trade association, but as the operator of a DOJ system. In response to MnDVS’s comment,
DOJ is of the opinion that if not in violation of the Anti-Car Theft Act or other federal privacy
statutes, such cooperation is necessary and not arbitrary or capricious.
Comment: Several commenters, including at least one from the state motor-vehicleadministration community, encouraged the inclusion of lien-holder information in the data
provided to NMVTIS in light of the difficulty of obtaining this information on out-of-state titles
and the associated budget impact on states. Other commenters, including insurance-related
organizations, Assurant Solutions, and the NADA, suggested that additional data (including lien-

69

holder information) will provide a crosscheck of information, close up loopholes, and improve
NMVTIS.
Response: This comment demonstrates the importance of allowing the operator of the system to
request and accept additional information beyond the NMVTIS requirements. While states and
others are not required to comply, there may be good reason to do so that would result in cost
savings among the stakeholders. In terms of lien-holder information, while DOJ is not in a
position to require that lien-holder information be included in the central file, DOJ notes that the
existing secure network could be used in conjunction with the NMVTIS central-file information
to query the current state of record and to access lien-holder information in that state’s title
record through the secure network provided by the current operator. Queries of and access to the
actual state records should only be permitted when a state has agreed to provide such access,
when any state application or certification procedures are completed, and when such access is in
conformance with the Anti-Car Theft Act, the DPPA, etc.
Comment: One commenter suggested that DOJ include registration information in the list of
required data as a means to ensure accurate tracking of vehicle ownership.
Response: Including registration information is beyond the scope of NMVTIS. Although it may
be useful, DOJ cannot require such information.
Comment: The National Salvage Vehicle Reporting Program commented that insurance carrier
reporting should commence on or before March 31, 2009, as required by the federal district
court, and that initial reporting by all covered entities should include historical data to the extent
available, so that NMVTIS is complete beginning on March 31. Several insurance-related
organizations or associations reported that “[t]he start date for insurers should be clarified. We
believe the best approach is to provide that the system applies to automobiles declared junk or

70

salvage on or after April 1, 2009, the system must be established by March 31, 2009. However,
we prefer that more time is provided for insurers to comply.”
Response: DOJ will require that all vehicles declared junk or salvage (including “total loss”) on
or after April 1, 2009, be reported to NMVTIS. However, DOJ strongly encourages insurance
carriers and junk- and salvage-yard operators to provide data on vehicles that were declared
junk, salvage, or total loss before that date and as far back as 1992, if such data is available.
Comment: The National Salvage Vehicle Reporting Program commented that “NSVRP strongly
endorses the inclusion in the rules of 3rd party enhanced standards that allow for data generators
to report to NMVTIS more completely and more frequently than minimally specified in the
rules.”
Response: While DOJ is not in a position to articulate data-reporting requirements or standards
regarding data that is not statutorily or otherwise required, DOJ notes that the National Salvage
Vehicle Reporting Program has worked with nearly every stakeholder group affected by
NMVTIS to develop standards for voluntary reporting to NMVTIS that would benefit states, law
enforcement, consumers, and others. DOJ applauds the National Salvage Vehicle Reporting
Program and strongly encourages the operator to adopt these standards as suggested voluntary
compliance standards. While the standards cannot be mandated on any reporting entity, those
entities that adopt the standards and report voluntarily in a manner that is consistent with the
standards will be providing a significant public benefit.
Comment: The National Salvage Vehicle Reporting Program commented that NMVTIS must
support the electronic MCO process and should serve as a catalyst for implementation of the
electronic MCO system nationwide.
Response: DOJ is in favor of supporting an electronic MCO process as a way of eliminating and
preventing fraud and reducing theft. In addition to NMVTIS, the use of the secure AAMVAnet
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communications network for states would likely be necessary, and it would be AAMVA’s
responsibility to authorize its use for this purpose.
Junk yards and salvage yards.
23.

Salvage pools.

Comment: Several law-enforcement and related commenters strongly agreed with the
assessment that Salvage Pools are one of the most significant sources used by criminal groups as
a source of paperwork and as a way to fund their operations. These commenters agree that
Salvage Pools must report vehicles to NMVTIS both when they receive vehicles for sale, and
when they sell those vehicles. These commenters further noted that such salvage pools have
sophisticated technological capabilities and should not have any problem meeting the reporting
requirements. Several of these commenters noted that in some cases, individuals purchase
severely damaged units at or via these pools and then steal a similar make and model for cloning
purposes. For this reason, these commenters also recommended reporting the buyer’s name for
these vehicles. Several national consumer-advocacy organizations also supported the
constructive definition including salvage pools and the requirement to add buyer name in the
reporting requirements.
Response: DOJ reaffirms its determination to include “salvage pools” and “salvage auctions” in
the definition of junk or salvage yards, thereby requiring them to comply with the corresponding
reporting requirements. The name of the buyer is not reported elsewhere despite being very
valuable for law-enforcement and other purposes. DOJ, therefore, added the name of the buyer
as required data to report. Because many of the purchasers are reportedly international buyers,
some of whom have been linked to fraud and theft rings that purchase such vehicles for clean
paper to use on stolen vehicles in the U.S., DOJ also will add to the requirements an indication if
the vehicle is intended for export.
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Comment: The Nevada Department of Motor Vehicles commented that by statute, Nevada
requires wreckers and salvage pools to apply and transfer their salvage titles, junk certificates,
and non-repairable certificates within 10 to 30 days. Nevada suggested that these organizations
should be exempt from reporting because the DMV already sends this data to NMVTIS.
Response: Junk and salvage yards, including salvage pools, are not required to report data to
NMVTIS if the state already reports the required junk- and salvage-yard information to
NMVTIS pursuant to this regulation.
Comment: One commenter asked whether “the definitions of junk yard and salvage yard, which
include even a single individual, [are] a substantial overstep?” Several consumer-protection
organizations also suggested that, with respect to the definition of “in the business of,” junk and
salvage yards should be defined as any entity or individual meeting the description in the
definition that acquires or owns five or more salvage or junk automobiles within the preceding
twelve months, which is analogous to other similar reporting standards.
Response: DOJ modified the final rule consistent with the comment from the consumerprotection organizations. The qualifier of five or more vehicles is taken from federal odometer
law, and its definition of “car dealers” from 49 U.S.C. 32702(2).
Comment: One commenter (CARS of Wisconsin) argued that “information about who owned
the vehicle prior to it being junked is unnecessary.” The Wisconsin Department of
Transportation contended that requiring junk and salvage yards to report the name of the vehicle
supplier is unnecessary, as is the disposition of such vehicles. Wisconsin DOT commented that
because these vehicles are scrapped or destroyed by these entities and cannot be returned to road
use, it is unnecessary to report this information.
Response: Comments from law-enforcement entities on the proposed rule demonstrates that this
information is of significant value. Additionally, even when a vehicle cannot return to the road,
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the VIN can be used to clone a stolen vehicle. In states that do not have the same junk-branding
requirements as Wisconsin, a junked vehicle can “live on” through a cloned stolen vehicle,
which will only cease once NMVTIS is fully implemented.
Comment: The Virginia Department of Motor Vehicles expressed concern that the proposed
rule seemed to encourage junk- and salvage-yard operators to submit data via FTP or facsimile
that potentially would include personal identifying information.
Response: DOJ encourages all reporters to report electronically whenever possible. In cases
where electronic reporting is not an option, DOJ will direct the operator to identify a reporting
procedure to accommodate the situation. Regardless of the reporting method, DOJ and the
operator will ensure that all possible safeguard measures are taken, including secure FTP
wherever possible.
Comment: One commenter requested that DOJ require the operator to accept junk- and salvageyard data from any junk or salvage yard directly or through a third party on their behalf to
minimize administrative burden.
Response: DOJ has provided the operator with flexibility in identifying the specific methods of
reporting to NMVTIS. It is not in the system’s best interest for all required reporters to report
directly into the system, due to technical and business reasons. The operator is expected to
identify 3 or more different methods of transmitting information to NMVTIS and will make this
information available via its website, as will DOJ via www.NMVTIS.gov.
Comment: Several commenters have noted that, similar to insurance-carrier reporting, junk and
salvage reporting of vehicle presence in inventory on a 30-day basis leaves a significant amount
of time for fraud and theft to occur. These commenters recommended that DOJ require
reporting of not only presence in inventory, but also disposition of the vehicle. The

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recommendations for the revised reporting timeline varied in the recommendations from
immediately to the several business days.
Response: The Anti-Car Theft Act defines the reporting timeline, and, therefore, DOJ can only
require reporting on a monthly basis. DOJ does strongly encourage all reporters to report data as
soon as possible or on a daily basis.
Comment: ASPA commented that “while ‘salvage pools’ were not included by Congress in the
‘Anti-Car Theft Act of 1992’ as an entity with reporting requirements, the DOJ sweeps our
industry into the group which has these reporting requirements…. The salvage pool industry
wants to be helpful in combating vehicle theft, but we want to insure that any reporting
requirements imposed on our industry are reasonable, in light of the fact that Congress did not
specifically place reporting requirements on salvage pools.”
Response: DOJ appreciates ASPA’s declaration and will work to ensure that reporting
requirements on every industry are reasonable. The reporting requirements proposed for salvage
pools are the same requirements placed on salvage yards, which also handle salvage vehicles.
Because a salvage pool is in the business of acquiring (constructively defined to included
handling or controlling on behalf of) salvage automobiles for resale, it fits well within the
statutory definition of salvage yards.
Comment: ASPA commented that because salvage pools generally serve as “agents” for
insurance carriers, salvage pools should only be subject to the reporting requirements of
insurance carriers as they relate to the age of automobile to be reported.
Response: DOJ disagrees with this recommendation because salvage pools are included in the
definition of salvage yards, as opposed to insurance carriers.
Comment: ISRI and the National Salvage Vehicle Reporting Program both suggested an
exemption from reporting for vehicles acquired from an entity that is obligated to meet the
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reporting requirements of the Act and rule. They argued that this exemption is necessary, not
because of the burden of double reporting, but because, in the case of the scrap-metal-recycling
industry, many vehicles are acquired after being flattened or crushed to an extent that a VIN
cannot be reasonably obtained.
Response: Many scrap-metal processors and shredders do receive flattened and bundled vehicles
and vehicle parts. In those cases, recording a VIN for every vehicle is nearly impossible. Both
ISRI and the National Salvage Vehicle Reporting Program assert that such entities are at the
“end of the line” in handling end-of-life vehicles, and almost always receive vehicles from those
who are required to report on the vehicle before it is crushed or bundled. Additionally, with
scrap-metal processors and shredders, there is no possibility that the vehicle will be subsequently
purchased for operation on public roads by an unsuspecting consumer. However, cloning and
destruction of stolen vehicles remains a threat. For these reasons, DOJ created an exception for
reporting to NMVTIS in cases where a scrap-metal processor or shredder confirms that the
vehicle supplier reported the required data to NMVTIS. Scrap-metal processors and shredders
that receive automobiles for recycling in a condition that prevents identification of the VINs
need not report the vehicles to the operator if the source of each vehicle has already reported the
vehicle to NMVTIS. In cases where a supplier’s compliance with NMVTIS cannot be
ascertained, however, scrap-metal processors and shredders must report these vehicles to the
operator based on a visual inspection, if possible. If the VIN cannot be determined based on this
inspection, scrap-metal processors and shredders may rely on primary documentation (i.e., title
documents) provided by the vehicle supplier.
Lenders and automobile dealers.

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Comment: Iowa Attorney General Thomas J. Miller supported the DOJ proposal that lenders
and auto dealers have access to NMVTIS in order to further NMVTIS’s goals of reducing crime,
especially fraud.
Response: Commercial consumers will have access to NMVTIS.
Comment: Assurant Solutions argued that lenders and dealers need not only the ability to query
NMVTIS for information, but also need the ability to communicate and electronically exchange
motor-vehicle information to achieve greater efficiencies in title processing, and to limit the
number and type of paper-based transactions as a strategy to significantly decrease fraud.
Specifically, the commenter suggested that lenders and dealers communicate errors or changes to
NMVTIS.
Response: Communication to and from NMVTIS is currently facilitated through the use of the
current operator’s secure and proprietary network, AAMVANet. This network is not a
component of NMVTIS per se, and therefore the operator governs use of this network for
communication between NMVTIS and its users. In terms of providing lenders and dealers with
the ability to make corrections and changes, DOJ notes that it has concerns with authorizing any
user other than a state motor-vehicle administration or its agents (where applicable) to make
corrections directly or changes to NMVTIS data. However, DOJ directed the operator to
develop a process for reporting possible errors and requesting changes that may also be used by
lenders and dealers.
Responsibilities of the operator of NMVTIS.
24.

Consumer access methods.

Comment: One commenter argued that “[t]he web-based access should be open to private
individuals who wish to check the status of a prospective purchase.” And the NADA supported
the provisions in the proposed rule allowing dealers to access NMVTIS as prospective
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purchasers, which is likely to help thwart motor-vehicle-title fraud. A consumer-advocate
attorney commented that if this information becomes widely and readily available, the vehiclefraud industry will be significantly reduced.
Response: Prospective purchasers are required to have access to information necessary to make
an informed purchase decision (which includes dealers who purchase vehicles for resale) and
DOJ will require that consumer access be available by January 30, 2009.
Comment: Experian Automotive argued that DOJ should not overlook the significant costs
involved in marketing and distributing vehicle-history information, and suggested that these
costs are beyond what the operator can provide.
Response: These costs are significant. Under the model of third-party portal providers (as
opposed to a single, operator-provided consumer access model), the third parties, not the
operator or DOJ, will bear the most significant marketing and distribution costs. It is partly
because of these costs that the third-party model was selected.
Comment: Experian Automotive argued that NMVTIS is not chartered to provide the level of
information and support that Experian or other private vehicle-history report companies provide.
Response: DOJ has no intention of competing with private vehicle-history-report companies.
Those private services possess data that NMVTIS does not intend to provide (e.g., vehicle repair
and service histories). NMVTIS is simply intended as a government-sponsored service to verify
the title and brand history of a vehicle reliably, thereby preventing fraud and theft.
Comment: Several motor-vehicle administrations and one services organization argued that the
operator should not be permitted to sell bulk vehicle data from any state or states, which would
effectively allow private information resellers to bypass contractual agreements and seek the
state’s database from the NMVTIS operator. Additionally, at least one state motor-vehicle

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administration suggested that the operator should conduct regular program and security audits
and should screen potential access providers.
Response: The operator will not sell the NMVTIS central file or any particular state’s dataset
(i.e., all VINs from a particular state). All information provided will be in response to VIN
queries, except in cases of law-enforcement queries, which could include searches of NMVTIS
by reporting entity name, names associated with reports, location, etc. Data provided to
NMVTIS will remain in the possession of the operator and any contractors supporting the
operator (i.e., data center hosting or backup). Consumer-access providers are restricted from
downloading and storing bulk NMVTIS data for resale or reuse and must use data in accordance
with the Anti-Car Theft Act. Any entity using NMVTIS data in a manner inconsistent with these
regulations may not be covered under the Act’s immunity provisions. The operator shall
conduct regular reviews and audits of security arrangements and program compliance and shall
work with DOJ to establish access-provider standards to ensure that the access providers are
professional and reputable, and that information and access are provided according to the Act.
Comment: One commenter argued that “[t]he responsibilities of the operator of the NMVTIS
system are confusing in subsection (b)(3) and (b)(5), [as] they appear to have the same meaning
and impact.”
Response: These subsections describe what the operator of NMVTIS is statutorily required to
provide to users of the system, including information regarding a vehicle’s current or past status
as a junk or salvage vehicle. In other words, NMVTIS will make information about vehicle
history available to consumers, state titling agencies, law enforcement, and others through an
electronic (e.g., web-based) inquiry. Although subsections (b)(3) and (b)(5) overlap somewhat,
it is possible that the operator may have information indicating that a vehicle has been branded a

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junk or salvage that did not arise from a report submitted by a junk or salvage yard or insurance
carrier.
Comment: One commenter noted that “[w]ith the expected low implementation costs for this
consumer system, there are major benefits to centralizing the system within a government
website in order to reduce further consumer misinformation. In the alternative, a detailed
scheme prohibiting third-parties from charging certain fees for accessing the system” would be
desirable. The commenter further emphasized the importance of regulating third-party
involvement.
Response: Third-party involvement will be regulated and monitored by the operator and DOJ.
DOJ believes that this is the most sensible manner of implementing consumer access. DOJ has
established www.NMVTIS.gov as a central source of reliable information concerning NMVTIS,
providers, requirements, etc.
Comment: One commenter suggested that the operator be required to establish a data-quality
plan that may rely on technological tools to scan for and flag errors in VINs that may be reported
to the system.
Response: DOJ agrees with this comment and will direct the operator to adopt all reasonable
strategies and techniques for ensuring data quality.
Comment: In response to DOJ’s request for comments on methods of NMVTIS access, several
commenters agreed that third-party providers may be better suited for handling information
access than a single provider. The Minnesota Department of Public Safety argued, however, that
private third parties should not be permitted to have access to NMVTIS data in the manner
proposed, with little oversight, and to generate profit from the data contributed by the states.
Additionally, the commenter stated that this would violate the provisions of the Anti-Car Theft
Act that restrict the operator from taking a profit from its role as the NMVTIS operator.
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Response: The third-party providers are not given open access to NMVTIS data. Rather, they
are only provided access to that data that the Anti-Car Theft Act requires to be available to
prospective purchasers. Additionally, the operator will maintain much more than “little”
oversight over these contractors. Last, while the Anti-Car Theft Act restricts the operator from
taking a profit, the Anti-Car Theft Act provides no restrictions on third-party contractors,
including states that wish to be a portal provider. DOJ will move forward with a third-party
provider approach to consumer access.
Comment: The NADA commented on the importance of providing access to NMVTIS
information for the wholesale vehicle market: “If wholesale auctions have access to NMVTIS
data, fraudulently titled vehicles could be easily flagged and reported to law enforcement
officials expeditiously and efficiently… .Transparency at the wholesale level will only help to
deter motor vehicle title fraud and enhance the NMVTIS system.”
Response: DOJ agrees and notes that enabling this type of access also will assist in generating
revenues to sustain the system and possibly offset or eliminate state fees. So long as this access
is on an inquiry basis, and NMVTIS data is not sold in bulk as previously described, DOJ will
authorize and direct the operator to provide such access to dealers and other commercial
consumers, consistent with the Anti-Car Theft Act.
Comment: Several commenters expressed concern that the operator must provide robust
security protections for the information to be included in NMVTIS.
Response: DOJ will ensure that the operator relies on industry-standard security and related
protections, including any relevant policy recommendations of the Global Justice Information
Sharing Initiative that relate to security and privacy protections of information systems used in
the criminal-justice environment.

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Comment: ISRI argued that DOJ’s authorization for the operator to identify third-party
organizations to receive and provide data to NMVTIS in lieu of allowing all required entities to
report directly to NMVTIS is problematic. ISRI believes that allowing third-party organizations
to handle the information creates a security risk, provides an opportunity for market participants
to access confidential business information, and could create a cost burden for reporting entities.
ISRI recommended additional security protections and restrictions that would prevent these
potential problems.
Response: The current operator’s information architecture is not designed to allow hundreds,
and possibly thousands, of reporting entities to report directly to NMVTIS. In light of this, and
because many of the covered reporting entities are already reporting to third-party entities, such
as the Insurance Services Office (ISO), allowing a third party to receive and provide the required
information is effective and reduces burden on reporting entities by allowing their current
reporting to be used in NMVTIS compliance. DOJ will require the operator to designate at least
three third-party organizations for reporting purposes, so that covered entities can choose which
third party they are most comfortable with. Additionally, any third-party organization that
develops a reporting application at the operator’s request will agree to terms and conditions
restricting the sale or use of the data, consistent with the Anti-Car Theft Act.
Comment: Auto Data Direct, Inc. suggested creating a policy to prevent free dissemination of
prospective-purchaser-inquiry data by any entity and charging all consumer-access providers the
same fees in order to maintain a level playing field.
Response: DOJ agrees and will direct the operator to ensure that all consumer-access portal
providers are charged the same fees for NMVTIS information, notwithstanding volume
discounts. Consumer-access providers, however, are currently not restricted in what they can

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charge the end user (prospective purchaser) for an inquiry, as DOJ has determined that the
“market” can determine this better than any artificial caps or minimums.
Comment: The Minnesota Department of Public Safety commented that section 30504 of the
Act requires DOJ to prescribe by regulation the procedures and practices to facilitate reporting to
NMVTIS. The commenter suggests that DOJ is merely placing this burden on the operator to
circumvent the DOJ’s own responsibilities.
Response: DOJ strongly disagrees with this assessment. Requiring that these procedures, which
are subject to change and modification as technology advances, be published in federal
regulations is unwise and inefficient and would only serve to restrict the states and other covered
participants from working with the operator to improve reporting practices. It is in everyone’s
best interest that such detailed procedures are not codified in regulation beyond the procedures
and practices that are described herein (i.e., third-party reporting, reporting via batch upload or
realtime, etc.).
Comment: AAMVA asserted that it cannot support the development and implementation of a
third-party reporting mechanism to support insurance, junk, and salvage reporting. AAMVA
reports that to establish this connection with the required 2-3 third-party organizations would
require $1million to $1.5 million in development costs and up to $400,000 in annual operating
costs from federal funds to implement this provision.
Response: DOJ is under court order to establish this mechanism by March 31, 2009. DOJ has
recently provided AAMVA with federal funds of nearly $300,000, and AAMVA expects to
receive approximately $1,500,000 in user fees by end of year 2008. Much of these funds are
spent on other activities, including and especially support for currently-participating states. DOJ
expects to work with AAMVA on cost controls and to intervene to ensure that the basic

83

connection is established as required by the court. The Anti-Car Theft Act specifies that
NMVTIS will not depend on federal funds and is to be supported by user fees.
Comment: The National Salvage Vehicle Reporting Program commented that commercial
consumers such as auto dealers would desire the ability to inquire on multiple VINs at the same
time in a “batch” format at an appropriate cost. Consumer-advocate attorney Bernard Brown
commented that “such broad access to NMVTIS data should be provided for all of these
businesses and entities to level the playing field” in the competitive market place. Other
consumer-advocacy organizations commented that such commercial consumers should not be
permitted to provide the NMVTIS vehicle history to other consumers without also notifying
such consumers of the NMVTIS disclaimers and warnings.
Response: Similar to the need for central-issue states to inquire against multiple VINs at the
same time, commercial consumers should have the same service available at a cost
commensurate with the service. Because DOJ is directing the operator to make such a batchinquiry process available for central-issue states, this same service should be available to dealers
and other commercial consumers. DOJ points out, however, that these searches will require a
VIN for each vehicle to be searched. That is, no bulk data will be made available to any
consumers. DOJ will require the operator to require all third-party portal providers to make a
NMVTIS Notice and Disclaimer available to all consumers accessing the system. Additionally,
DOJ has collaborated with the Federal Trade Commission on its Used Car Buyers Guide
regulations to ensure that the FTC is aware of NMVTIS and the accompanying notice and
disclaimer.
Comment: Several commenters, including the National Salvage Vehicle Reporting Program,
stated that the inclusion of specific disclaimers for limitations to the data reported by the system
is essential for consumer protection purposes.
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Response: DOJ agrees and will work collaboratively with the operator and others to ensure that
appropriate notices and disclaimers are in place.
Comment: One commenter noted the need for proactive efforts by DOJ and the operator in the
areas of public awareness and education on NMVTIS and the issues it addresses.
Response: DOJ will work with the operator and the various stakeholder communities to develop
and distribute information through www.NMVTIS.gov and other means.
Comment: Several consumer-advocacy organizations argued that consumers should be provided
access either at no cost or nominal cost without onerous access requirements and allowed to
make multiple inquiries for a fixed price. Similarly, these organizations contended that
consumers who have completed vehicle purchases should be able to verify their vehicles’
history, and that the Department should take into account consumers’ lack of access to credit and
the “digital divide.”
Response: DOJ agrees that consumers should be able to access NMVTIS at nominal cost, that
there should be no onerous access requirements, and that any consumer – including those who
recently purchased a vehicle and those who may be considering purchasing a vehicle in the
future – should be permitted access. DOJ will take into account the comments on pricing
structures and the issues of credit access and “digital divide” while working with the operator to
establish the consumer-access provisions.
25.

Operator accountability.

Comment: Several state departments of Motor Vehicle Administration argued that the operator
must provide a reasonable and timely process for correction and amendment of records that
contain errors, and that the operator must take responsibility for notifying users of the erroneous
information. Another asked who would be responsible for working with insurance carriers and

85

junk and salvage yards when their data is questionable or incorrect. The commenter also asked
how the data would be corrected.
Response: DOJ agrees that an error-verification and correction process is vital to the success of
the program. However, in some circumstances, it may be impossible to fully verify the facts of
some situations (e.g., vehicles disposed of). The operator will be required to work with data
reporters to identify and resolve potential data errors, to note within the central file any
discrepancies reported or the findings of any investigations of errors, and to notify those who
accessed the information of any confirmed erroneous information. No entity, including the
operator, may remove any data reported by another organization, and only state motor-vehicletitle administrations can unilaterally change their data, which will update in NMVTIS. Insurance
carriers and junk and salvage yard operators do not have access to modify data in the system, but
are required to notify the operator immediately of erroneous information that they previously
reported and to immediately report corrected information, which will be flagged or noted in the
system as an update. Although the erroneous information may be retained in the file, it will be
noted as corrected via update, and the updated, correct information will be available. In
releasing insurance, junk, or salvage information, the operator may include the name of the
reporting organization and its contact information, so that anyone questioning the validity of the
report can go directly to the source of the information. It is important to point out that while
NMVTIS is authorized to serve as a data repository and data provider, NMVTIS was not
expected to serve as an arbitrator of questionable or even conflicting information. It is the
responsibility of the data reporters (including states and insurance, junk, and salvage
organizations) to provide correct information, and to provide updates and corrections as soon as
they are identified. Although the operator should not remove previously reported information,
the operator can add a “note” to the record regarding the corrected information, along with the
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corrected information. Additionally, DOJ added a section to the regulation (Section 25.57) that
provides for error correction in exceptional circumstances.
Comment: One commenter stated that “[t]he GAO report stated that there have been problems
with funding NMVTIS through AAMVA, including: excessive consultant fees; lack of
documentation for payments; failing to maintain records supporting financial reports; and failing
to adequately administer contractual arrangements with the states. GAO report at 10. How has
the track record for management of NMVTIS improved since then? What type of financial
oversight is expected for the system? And what type of compensation structure does NMVTIS
propose for its labor costs?”
Response: Because the current operator (AAMVA) has received grant funding from DOJ, the
operator is responsible for complying with all grant requirements, including financial and
programmatic requirements relating to contracting, documentation, and performance. Also, DOJ
will play an active role in overseeing the administration of the system. DOJ also has added
requirements for the operator to publish an annual report to include revenues and expenses by
category. DOJ leaves operator labor cost structures up to the operator to determine what is most
advantageous and cost-effective while complying with DOJ financial requirements. DOJ also
has added a requirement (should DOJ not be the operator) for an annual independent audit of
NMVTIS revenues and expenses, the results of which will be publicly available. DOJ also may
terminate the operator status of any organization (if not the Department of Justice) for cause,
should that be necessary. DOJ also has coordinated with another federal agency, the Office of
the Inspector General (OIG), which recently completed audits of the operator’s financial
recordkeeping and practices and will continue to monitor these issues. DOJ also notes that the
GAO study was completed many years ago, and that AAMVA has undergone many changes
since that time.
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Comment: One commenter asked “to what extent is the potential for corruption of those who
manage the system a concern? What internal controls will be implemented? Is this why access
provided by the operator to users of NMVTIS must be approved by the Department of Justice? §
25.53(d).”
Response: DOJ has no basis for any concerns of corruption. The internal controls in place to
protect the integrity of the system are many and varied, including technological controls,
transparency, and oversight from a variety of stakeholders.
Comment: One commenter noted that “[t]he estimates in the regulations give the impression
that the operator doesn’t know exactly how much the system costs to operate[.] The estimates
provided all seem pretty high. Why does it cost so much to operate the system? Is DOJ sure that
the operator has the experience and ability to run the system well?”
Response: DOJ is very concerned about current system costs. DOJ will continue to monitor and
encourage cost-saving options and will look to the annual independent audits to inform the
operator and DOJ of additional cost-saving strategies. DOJ notes that the current operator,
AAMVA, already administers other federal-state systems successfully. DOJ will continue to
encourage AAMVA to seek cost savings by outsourcing technological solutions as appropriate
and by adopting current and less-costly technological solutions.
Comment: One commenter asked “[h]ow will DOJ oversee the program and the operator?
Because these questions are obvious and because others have already asked questions about the
same issues, I recommend that DOJ create some kind of governance model to oversee the
project. The current operator has close ties to the states, but other groups required to participate
don’t have a seat at the table. A board of governors that has people from the groups that use the
system or need the system is definitely needed.” Similarly, one state motor-vehicle
administration noted that “the proposed rules and the options AAMVA is willing to provide do
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not match. The lack of flexibility on the part of AAMVA results in many options set forth in the
proposed rule not actually being available to the states.” The California motor-vehicle
administration commented that a board or commission made up of state representatives, DOJ,
and the operator should be engaged to discuss and agree upon the requirements relating to
consumer access. Other commenters also recommended the establishment of a steering
committee to govern operation of NMVTIS outside of the rules.
Response: It is DOJ’s responsibility to oversee the program and make or approve all policy
decisions regarding the implementation of NMVTIS. To ensure input from all stakeholders, the
Department may establish a NMVTIS Advisory Board to make recommendations to DOJ
regarding the system and its operation.
Comment: Several commenters recommended that DOJ publish the NMVTIS system budget on
an annual basis for review as a part of an annual report, and another commented that the operator
should be required to provide quarterly reports on the number of vehicles reported on during
each quarter, along with dispositional information, in order to give better insight into the
effectiveness and compliance rates within the system. Another state motor-vehicle title
administration recommended that the operator be required to have procured an independent audit
of the fees generated and expenses incurred on an annual basis.
Response: DOJ will require the operator (if not the Department of Justice) to prepare and
publish electronically a detailed annual report that includes many of these items, and DOJ also
will require an annual independent audit of NMVTIS revenues, costs, expenditures, and financial
controls and practices, which shall also be available.
Comment: The California motor-vehicle administration suggested that DOJ should identify its
responsibility for oversight of the system and operator performance, and that specific
performance measures should be established along with a minimum-performance period such as
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a year. The commenter further suggested that the review of operator performance should include
solicited comments from the various system stakeholders.
Response: As previously stated in these comments, the Anti-Car Theft Act provides that
NMVTIS is a DOJ system over which DOJ has sole responsibility and control. As necessary,
DOJ will enter into an Memorandum of Understanding (MOU) with the operator that addresses
these issues in greater detail.
Comment: Several commenters noted the need to require the operator to provide information to
reporters and others on its compliance and the compliance of others in the program.
Response: DOJ will work with the operator to establish the specific compliance monitoring,
management-control functions, and administrative-dashboard features that will be required. In
its annual report, the operator will provide compliance data and information on which states,
insurance, and junk- and salvage-yard entities are reporting to the system and participating, if
available.
User Fees
26.

Per transaction.

Comment: Several commenters noted that the user fees should be based on a “per transaction”
basis: “The fee structure based on a pro-rata share to states based on the number of registered
vehicles is not an equitable structure. States put information into the system and all the states
involved in the system benefit from this. Under a pro-rata system, states that have a low number
of title transfers but a high number of vehicles ha[ve] to pay in more for the system for marginal
benefit. Other states, for example states that act as dealer hubs and have a large number of title
transfers but a small number of registered vehicles[,] would be benefitting disproportionately.
For those reasons, the fees should be applied on a per transaction basis.”

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Response: Several commenters, including state motor-vehicle-title administrations, noted that
fees based on a “transaction” basis could serve as a disincentive for states to participate and to
make NMVTIS inquiries, which would leave consumers and others vulnerable. Additionally,
several commenters noted that fees based on a pro rata basis provided the ability to know fees in
advance, which would assist in budget planning and requests. Finally, a transaction-based fee
structure would require the operator of NMVTIS to revise its billing process and would likely be
more costly to implement. For these reasons primarily, DOJ has determined that state user fees
will be based on the number of motor vehicles titled or registered as reported by the U.S.
Department of Transportation’s Federal Highway Administration through its Highway Statistics
Program and reports. With state participation mandated beginning January 1, 2010, the operator
will invoice all states regardless of their level of participation. State fees shall be reviewed
biennially and announced to the states as soon as possible, preferably more than one year in
advance of becoming effective.
Comment: Experian Automotive commented that some aspects of the proposed rule could be
read to allow the establishment of a fee beyond what would be reasonable for the records, which
would be essentially the same as prohibiting the disclosure of information outright.
Response: The current inquiry fee used in consumer-access pricing is based on market
assessments, and with volume discounts included, has been effective in securing consumeraccess provider-organization agreements. However, DOJ will carefully monitor consumer
access pricing to ensure that the average consumer is not “priced out.”
Comment: AAMVA and the States of California, New York, and Alaska commented that user
fees based on the number of vehicles registered in the state are the preferred basis, as this will
enable states to determine the fees in advance, which will support budget planning. At the same
time, states such as Texas, Oregon, South Carolina, and Hawaii have recommended a fee
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structure other than the number of registered vehicles because of the high number of registered
vehicles in some states. The State of California recommended that the fees be the subject of a
separate, future rulemaking, that the operator be required to make its expenses publicly
available, and that a stakeholder group comprising the operator, DOJ, and states provide input
into the fees.
Response: DOJ agrees with AAMVA and several states in making the basis for state fees the
number of vehicles registered or titled. DOJ cannot defer rulemaking on fees because the
operator has indicated extensively that funding for NMVTIS is critical. In fact, in the operator’s
public comments on this rule, it acknowledges that it cannot implement key aspects of NMVTIS
in accordance with a federal court’s order without critical funding. For these reasons, DOJ must
resolve this issue now. DOJ agrees that all expenses and revenues for NMVTIS be made
publicly available annually.
Comment: More than one commenter noted that “[c]harging a ‘user fee’ to a state for the
information they are required to upload to the system is simply unfair. If anything, the states are
providing this information as a courtesy to enable the NMVTIS process to function. As such, a
state should not be charged a fee for providing data. Rather, anyone, including a state, which
uses the system to process requests, should pay fees for system use.”
Response: The user fee is not charged to a state solely for sharing its data with the system and
other states. The user fees are assessed in light of the states’ use of the system overall as is
required by law, including making inquiries into the system, relying on the system to maintain a
national brand history, and facilitating the secure exchange of title information and updates
between states to protect the states’ consumers. Additionally, all states receive a level of added
protection from fraud via participation by other states.

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Comment: The State of South Carolina Department of Motor Vehicles suggested that “states
could be charged for inquiries prior to the issuance of a new jurisdictional title based on an outof-state title; however, states should be reimbursed for these charges based on the number of
third-party inquiries that the system receives. If such a model is not developed, then states will
take a double hit: the cost of full participation in the program, as well as the loss of revenue
resulting from third parties being able to obtain current jurisdictional data through alternative
means.”
Response: Regardless of the fee model, DOJ has taken steps with the operator of the system to
ensure that impact on states is minimized. In fact, the model that South Carolina proposes is
very similar to the model being considered by DOJ and the operator. The model DOJ is
proposing for generating revenue includes a component designed to “point” consumers to the
full title history in the state of record, thereby potentially generating additional revenues for the
state, and the model includes a strategy of using revenue to cover system operational costs as
well as offsetting state user fees. Once system operational costs are covered, DOJ anticipates
offsetting or eliminating state fees entirely with revenues generated by the system. Should
NMVTIS ever reach the point where an unexpected surplus of user fee revenue exists, DOJ
could direct the operator to reduce user fees the following year or could use the funds to support
state upgrades to motor vehicle title information systems. This latter use of funds would be
directed by DOJ exclusively.
Comment: The State of Illinois motor-vehicle administration commented that in order for
NMVTIS to be effective, NMVTIS should purchase vehicle-history data from the state, “mark
up” the price of the data, and sell the data to third parties. Illinois suggested that “with this
model, everyone wins,” and that “consumers win because they can rely on the complete,
consistent, and efficient flow of information about motor vehicles.”
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Response: While this concept may be appealing to some, the concept has several major. First,
the Anti-Car Theft Act does not authorize or even suggest that DOJ should purchase state data.
Had this been contemplated by Congress, funds would have to have been appropriated or at least
authorized to make the purchases. Additionally, government agencies are not in a position to
engage in speculative purchases. Consumers would not win under this scenario because they
would be left to pay high prices for vehicle history information, which many cannot afford and
should not have to do to be protected. Last, this is not what is required under the Anti-Car Theft
Act.
Comment: The State of California recommended that the states be charged a flat fee for
participation that would cover NMVTIS operating expenses, and that all revenues generated
from consumer access be returned to the states.
Response: DOJ believes that, based on the arguments presented by the states in response to the
proposed rule, there is no equitable way to charge a flat fee due to variances in the number of
vehicles in the states, number of title transactions, number of out-of-state transfers into the
states, etc. DOJ believes that the fees must be based on a factor that is correlated to a state’s
required use of the system. In terms of returning revenues generated from consumer access to
the states, this is not too dissimilar to what DOJ has proposed – offsetting state fees (potentially
entirely) with revenues from consumer access once system operating costs are covered.
Comment: One commenter stated that “states should not be charged simply for submitting their
title data to NMVTIS. States that choose to use NMVTIS should not be charged for assisting the
DOJ.”
Response: States are not charged for simply submitting data to NMVTIS. States are required to
use NMVTIS for inquiries prior to issuing new titles for out-of-state vehicles, and NMVTIS can
provide real-time updates and corrections as well as a secure method of sharing title information
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between states. In fact, for the thirteen states currently online, 45 million messages or exchanges
have been processed by NMVTIS, and the State of California has commented that NMVTIS is
an “integral part of state operational activities,” demonstrating that NMVTIS does provide
services to the states. The purpose of NMVTIS is not to assist DOJ, and DOJ has limited use for
the data in NMVTIS. NMVTIS is a service to states that provides greater consumer protection,
reduces crime, and can improve titling process efficiencies, all three of which ultimately reduce
costs to the states overall as well as to consumers.
Comment: One commenter noted that “the Department of Justice does possess a legitimate
interest in incentivizing full state participation in NMVTIS.” All states receive a benefit from
NMVTIS. “Title washing and rebranding of vehicles remain a national problem, not somehow
confined merely within state borders. Providing information to NMVTIS allows law
enforcement agencies to confront crimes that may have originated or affected states outside of
their jurisdiction.”
Response: DOJ agrees with this comment.
Commenter: One commenter expressed disappointment regarding state concerns over user fees
and system costs and recommended that DOJ pursue enforcement against non-participating
states.
Response: DOJ appreciates the concern and will monitor state compliance with the Anti-Car
Theft Act and the NMVTIS rules.
Comment: One commenter noted that the fee structure should be based on the activities
generating the most costs, such as storing vehicle data, performing verifications, etc.
Response: DOJ agrees that the fees should match the costs of the system. In asking for
comments on the fee structure, however, DOJ was attempting to solicit input from the field
regarding the most equitable manner of developing the fees and applying them to all states. As
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for costs, the majority of current expenses are for supporting online states and states in the
process of implementation and data storage.
Comment: The State of New York Department of Motor Vehicles commented that a
transaction-based fee could serve as a disincentive to states to query the system often. The State
further commented that a flat fee may be more effective.
Response: DOJ appreciates this input and assumes that the commenters reference to a “flat fee”
could include a tiered fee structure, such as what is in place today, as this results in a flat fee for
the states in each tier.
Comment: One commenter noted that “[w]e remain convinced that if this is a program that is as
effective as it is pronounced to be, if it will truly accomplish all of the goals it is said to have,
then it should be fully funded and supported by the Department of Justice. Otherwise, it should
be funded by fees charged for those states, individuals and organizations who request data from
the system, based on a transaction fee as determined by AAMVA to sustain the system. If that is
not possible and the DOJ will not fund it, it should be cancelled.”
Response: The Anti-Car Theft Act explicitly states that NMVTIS should not be dependent on
federal funds for operation. DOJ has awarded over $15 million to NMVTIS and participating
states, in addition to the funds awarded by the Department of Transportation prior to 1996.
Since 1992, no more than $2 million has been collected in user fees by the operator. DOJ will
comply with the Anti-Car Theft Act in requiring a system of user fees to support system
development, operation, and maintenance. Because the Anti-Car Theft Act requires that DOJ
implement the system sustained by user fees, DOJ has no ability to “cancel” the program.
27.

Tier structure.

Comment: Several commenters, including AAMVA, noted that a tiered structure is the most
workable structure from a budgeting perspective, given that this type of basis or structure will
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lessen the need for annual changes to fees, which are unworkable for states with biennium
budgets. However, some states, such as Oregon, Virginia, Alaska, Minnesota, and others, noted
that a non-tiered structure is preferred.
Response: DOJ appreciates this input and has elected to keep the tier structure in place. While
there is still disparity between small and large states, and between those states that have
significant differences in the number of titled vehicles, the tiered structure does help in reducing
disparities between states of similar size. Additionally, the tier structure allows the per-vehicle
basis fee structure to remain relatively stable, rather than fluctuating constantly, and because it
acts as a stabilizer, it results in a stable fee that states can budget for appropriately. Last, the tier
structure is the structure that the AAMVA Board has adopted as a workable method for
establishing fees.
Comment: AAMVA commented that in addition to retaining the tiered fee structure, DOJ
should modify the final rule to allow changes to the fee structure to be determined through a
mutual agreement between DOJ and the operator.
Response: DOJ firmly believes that issues such as the structure of mandatory fee systems
should be addressed in a public manner, as opposed to handled informally and without input
from stakeholders.
28.

Per vehicle.

Comment: More than one commenter noted that user fees should be based on the number of
“automobiles” titled versus the number of “motor vehicles” titled in a particular state.
Response: While DOJ understands the comment and agrees in principle, the “basis” for
calculating such fees has no impact when fees are adjusted to cover system costs. In other
words, charging a user fee of $0.02 based on the number of “motor vehicles,” versus $0.04 based
on number of “automobiles,” is academic. Because NMVTIS already includes and services titles
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on all motor vehicles that a state may provide data on, many stakeholders and DOJ encourage
states to make verifications on all motor vehicle transactions. States have been paying fees
based on number of motor vehicles, and because the number of motor vehicles (a more
comprehensive figure) is easier to calculate for states and the operator, DOJ authorizes the
operator to continue the practice of charging user fees based on the number of motor vehicles
titled in the states.
29.

Charging non-participants.

Comment: Several commenters, including the current operator, expressed concern with
charging fees to all states regardless of participation. The North Dakota Department of
Transportation noted that the proposal to allow the operator to charge the user fee to all states,
even if a state is not a current participant in NMVTIS, is “unfair” and that there has been no
evidence provided that demonstrates the enhanced effectiveness of NMVTIS when all states
participate. That commenter also argued that there is no evidence that criminals have targeted
non-participating states. The commenter noted that “paying for the privilege of participating . . .
is patently unfair and simply ludicrous.” Another commenter stating the same conclusion
described the system as “an unfunded mandate where the particular costs to states are vague, and
the total costs ill-defined.” The State of Texas commented that this would not represent a true
“user fee,” and the State raised the possibility of “constitutional problems” in paying such a fee.
Response: DOJ disagrees with each of these comments. Because all states are required to
participate fully in NMVTIS and all states receive benefits from the system, all states must pay
the user fees. There is no option for states to not participate in NMVTIS, which includes paying
user fees to support the system as required by the Anti-Car Theft Act. Existing research
demonstrates NMVTIS’s effectiveness, and the supporting data provided. Moreover, state and
local law enforcement organizations, as well as automotive insurance experts, agree that non98

participating states are being targeted for exploitation. It is important to note that the operator of
the system has no discretion with regard to charging user fees, as this is the economic model
established by the Anti-Car Theft Act. The operator has been steadfast in ensuring that DOJ
understands and appreciates the perspective of its members and has worked closely with DOJ to
identify ways of lessening the burden of implementation on state agencies. Additionally, states
have multiple options for implementation in order to best manage the costs of participation, and
certain cost-saving and potential state-revenue-enhancing features have been established or
planned.
Comment: The State of California commented that “we agree with the recommendation to
charge all states. If the fee is charged to all states regardless of participation, there will likely be
greater participation by all states. This could increase the value of the database, generating
additional consumer transactions, which can then be used to offset the user fees charged to
states.”
Response: DOJ agrees that by charging all states a user fee in light of the requirement for all
states to participate and the benefits all receive, any disincentive to make title verifications or use
the system in the manner required is eliminated.
Comment: One commenter noted that his/her state “will not voluntarily pay user fees.”
Response: User fees will not be voluntary. Because the Anti-Car Theft Act requires that
NMVTIS be self-sustaining through user fees, the final rule requires the operator to issue
invoices and charge users of the system a user fee based on system operating costs and other
factors that affect the costs, such as necessary upgrades or enhancements. Payment of the user
fee is required for compliance with Federal law.
Comment: One commenter noted that all users of the system should be charged user fees,
including entities reporting data.
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Response: At this time, DOJ is not in favor of this recommendation because of the increased
financial burden it would place on junk and salvage yards and insurance carriers, and the
disincentive it would impose on their reporting of data.
30.

Enforcement.

Comment: Several commenters from various stakeholder groups asked who would be
responsible for enforcement of the provisions of the rule and how enforcement responsibilities
will be conducted.
Response: Responsibility for enforcement of this rule resides with the Department of Justice
overall. Within DOJ, several component organizations (including the Bureau of Justice
Assistance, the Federal Bureau of Investigation, and the Civil Division’s Federal Programs
Branch) will collaborate with each other, with the operator, and with state and local law
enforcement to ensure compliance and to respond to allegations of non-compliance.
Comment: ARA commented that an “amnesty period” should be provided because most
automotive recyclers will depend on inventory-management vendors to provide a reporting
mechanism.
Response: While an “amnesty period” per se is not established, DOJ will work closely with the
ARA and other organizations including the operator (if not the Department of Justice) to ensure
that the commencement of reporting is not impeded. During the initial period of reporting, DOJ
will be focused on implementation as opposed to purely enforcement.
Comment: Several insurance carriers suggested language for clarifying the enforcement aspects
of the rule, recommending that a “violation” be defined as “an act in flagrantly and in conscious
disregard of this chapter” and that the rule include a statement limiting liability of insurance
carriers for what is reported and not reported.

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Response: DOJ will not define “violation” in this regulation because such a definition is
unnecessary. The Anti-Car Theft Act provides DOJ with sufficient discretion to seek and assess
penalties, including a requirement that DOJ consider the size of the business of the person
charged and the gravity of the violation.
Comment: The National Salvage Vehicle Reporting Program commented that any penalties
levied against a required reporter should be determined in a way that will result in a material fine
that could force a modification in behavior. This comment was supported by comments from
consumer-advocate attorneys who noted that “[t]he Department should construe the enforcement
provisions of the statutes to make them as strong as possible with respect to any potential
deliberate violations by insurance carriers or salvage yards.”
Response: DOJ will carefully consider any penalties applied as required by the Anti-Car Theft
Act.
Comment: The National Salvage Vehicle Reporting Program commented that “the
establishment of regular document procedures by an entity to provide compliance should be
considered a mitigating factor to demonstrate good intent.”
Response: The Department did not propose any regulations governing its enforcement efforts in
the proposed rule. At this time, the Department believes that enforcement concerns are
adequately addressed by the Anti-Car Theft Act and other applicable statutes and regulations.
Comment: Several insurance-related organizations or associations commented that “49 U.S.C.
40505 sets forth a $1000 civil penalty for ‘each violation of the chapter.’ With millions of data
points reported from and to many sources, there needs to be an interpretation of this provision
that makes clear that good faith efforts to comply would be enough to avoid the penalty. For
example, we request that the Department include language along these lines in the final

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regulation: ‘A violation for purposes of 49 U.S.C. 30505 means an act that is committed
flagrantly and in conscious disregard of this chapter.’”
Opposing this view, several national consumer organizations commented that “the
Department should flatly reject the American Insurance Association’s proposal that its
enforcement authority be limited by a ‘flagrant disregard’ standard. Nothing in the Anti-Car
Theft Act authorizes or contemplates such a standard, and the AIA does not adequately explain
why such a standard is necessary, or how it would be satisfied. Consistent with congressional
intent, the Department should preserve its full enforcement authority with respect to the
reporting requirements of the Anti-Car Theft Act and its implementing regulations.”
Response: As a matter of policy, DOJ will preserve its full enforcement authority and
discretion, including the ability to determine what constitutes a violation of the Act. As noted
above, the Department believes that enforcement concerns are adequately addressed by the AntiCar Theft Act and other applicable statutes and regulations.
31.

Liability.

Comment: Several commenters requested that DOJ clarify liability and immunity protections
for all users of the system – those using the data to make decisions and those providing the data
to the NMVTIS. At least one of these commenters indicated that without such clarification,
some data reporters may be hesitant to comply. Some commenters requested that DOJ clarify
protections from both criminal and civil liability.
Response: DOJ does not believe that the applicable immunity provisions require clarification.
Pursuant to 49 U.S.C. §30502(f): “Any person performing any activity under this section or
sections 30503 or 30504 in good faith and with the reasonable belief that such activity was in
accordance with this section or section 30503 or 30504, as the case may be, shall be immune

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from any civil action respecting such activity which is seeking money damages or equitable
relief in any court of the United States or a State.”
32.

System operating costs.

Comment: One commenter noted that the operator should examine its financial records and
projections more closely in order to narrow the estimated system operating cost projections of
$3,000,000 to $5,000,000 annually. Such examination would create greater reliability and equity
in determining user fees. The commenter further suggested that “an outside bidding process
should be enacted to shift the entire program onto a contractor.”
Response: Because the system has not yet been fully implemented, and because costs are driven
in part by system usage, the annual operating costs vary annually and therefore are estimates at
this time. DOJ agrees, however, that it is imperative that more robust and tighter financial
procedures and controls be put in place, and that transparency be encouraged through an annual
publication of an operator report of progress and costs, as well as budget projections for the
coming years. DOJ will ensure that these goals are reflected in the requirements of the system
operator. While the operator is free to consider outsourcing opportunities for operational
components (e.g., technology, financial oversight, etc.), the Anti-Car Theft Act requires that the
operator of the system, if it is not the DOJ, be an organization that represents the interests of the
states. The Act also restricts the ability of the operator to make any profit from the operation of
the system. Based on the current operator’s statements regarding continued participation as the
operator, DOJ is currently exploring outside bidding processes that could result in moving the
program to another operator or to DOJ.
33.

Concerns with cost-benefit study.

Comment: Several commenters noted concerns with the cost-benefit study cited in the proposed
rule and completed by Logistics Management Institute (LMI). Concerns include overstatement
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of the benefits of NMVTIS, lack of details regarding the study’s methodology, vague
presentation of findings and issues, and a noted possibility that underreported costs were not well
addressed. One commenter argued that “the LMI study is thoroughly unconvincing, and its
methodology is not sufficiently revealed as to permit rebuttal.”
Response: The LMI study was commissioned in 1999 by the National Institute of Justice (NIJ).
The reports cited are the only reports available to DOJ at this time. Although more details may
be desirable, the LMI study’s findings clearly indicate that NMVTIS’s benefits outweigh the
costs. Comparing an individual state’s cost estimates for implementation with the financial
benefits of eliminating even a modest number of thefts and brand washings demonstrates the
same thing. Moreover, the LMI study likely overestimated the costs of participation because the
only method of participation known at the time of the study was the fully integrated method,
which required a state to reconfigure title information systems to integrate NMVTIS inquiries
and updates into their automated title processes. With a new “stand alone” method of
participation available, the most costly aspect of known participation at that time (i.e., major
modifications to title information systems) has been eliminated as a requirement.
Comment: One commenter noted that “many improvements will remain theoretical without full
participation. The expected benefits however are not illogical; states will only fully gain from
NMVTIS once most states are full participants.” “The best interests of states, through their
consumers, lies with full participation in NMVTIS.” In agreement with this, the Virginia
Department of Motor Vehicles commented that “the system provides a great value to
participating states and that value will exponentially increase as each jurisdiction begins fully
participating.”

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Response: NMVTIS will not achieve its full value until there is 100% state participation.
However, some states, such as California, have commented very favorably on the benefits of the
system, even though all states do not yet participate.
34.

Cost calculations.

Comment: One commenter noted that “[t]here are specific examples of laxity in the costaccounting figures for this rule. For instance, although the proposed rule states that average fees
charged to states by the operator should be less than 3 cents per vehicle, it goes on to say that
‘states that choose to integrate the NMVTIS processes of data provision and inquiry into their
titling process generally incur one-time upgrade costs to establish these connections.’ It would
seem that . . . a ballpark figure for this ‘onetime upgrade’ is needed. Further, the cost of this
‘one-time upgrade’ may not be insignificant, as suggested by the fact that ‘states can lower their
upgrade costs by choosing to integrate the NMVTIS reporting and inquiry requirements into
their business rules but not into their electronic titling processes.’ This would bring with it,
however, a definite loss in efficiency.”
Response: It is important to note that there is no requirement in this rule or otherwise that states
integrate NMVTIS processes into their title-information systems. Because doing so would be
strictly and totally voluntary on the part of the states, DOJ does not see the need to attempt to
estimate the costs for this type of implementation. Requests from states for DOJ grant funds
have ranged from $17,000 to nearly $500,000 to implement various aspects of NMVTIS, e.g.,
data provision only, full implementation, etc. While implementing NMVTIS through the standalone method eliminates the need for nearly all system modifications, DOJ agrees that this
approach may still affect business processes and could therefore impact overall operating costs.
However, given that NMVTIS inquiries are only required on out-of-state vehicles coming into
the state, and given that system response time is less than three seconds on average, we can
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reasonably estimate that the cost is minimal for a title clerk to enter the VIN, wait approximately
3 seconds for the response, and review the response (a process estimated to take as little as 60
seconds or as much as 3 minutes). DOJ has included this estimation in the costs described in the
proposed rule. Clearly, if discrepancies are found, the time required to process the transaction
could increase substantially. However, DOJ notes that this is not a new cost, but a cost that
states already have today.
Comment: One commenter asked “has the agency considered the day-to-day cost of requiring a
title clerk to ‘switch to an internet enabled PC to perform a Web search of NMVTIS via a secure
virtual private network’ for every single title check of every single day? (Section 25.54(c)
requires that each state shall perform an instant title verification check through NMVTIS before
issuing a certificate of title.) Is this additional cost something an underfunded state is supposed
to bear simply because it is underfunded? What is the actual cost of having a clerk provide such
a search based on the total number of title checks that a state will do in a year?” A state motor
vehicle administration commented on the need to provide a “batch” verification method via
stand-alone access, so that many title verifications can be conducted as part of a “back room”
operation.
Response: The estimated costs for this function have been included in the overall cost
calculations for the system as described in the response above. It is important to point out,
however, that a state is only required to check NMVTIS when an out-of-state title is presented.
Although states are encouraged to make NMVTIS inquiries before all transactions, it is only
required in these limited instances. Additionally, states that determine that this process is
unworkable may make a one-time system modification to automate the NMVTIS inquiry
function. While most states may opt to use the individual title-verification method for over-the-

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counter operations, DOJ will encourage the operator to make available a “batch” verification
method as quickly as possible to make compliance more flexible for central-issue states.
Comment: One commenter asked “what are the anticipated costs of causing an insurance carrier
to provide the requested information ‘in a format acceptable to the operator?’ § 25.55(a).
Where is the study indicating this cost? How was this cost determined? And was this cost
balanced against the benefit of consumer protection? This rule will increase insurance costs.”
The commenter also asked why insurance carriers should have to provide the information at its
own cost. If the information was being collected under the “guise” of consumer protection,
when it will provide “any real benefit?”
Response: DOJ estimated the costs to insurance companies and presented these costs and a
description of how they were determined in the proposed rule. These costs were not balanced
against the benefit of consumer protection. For insurance carriers already reporting to a third
party that provides the required information to NMVTIS, no additional costs will be incurred.
Amica Mutual Insurance and other insurance organizations that have begun reporting this
information on their own have publicly stated the benefits of such reporting. The benefits of
NMVTIS in terms of consumer protection are well founded and common sense.
Comment: The State of Illinois motor-vehicle administration commented that compliance in the
first year of the program would cost the state an estimate $3,700,000, including start-up costs,
user fees, and the loss of approximately $2,600,000 in annual sales of vehicle information.
Illinois commented that these costs and the model being implemented by the operator is
“nonsensical.” Other states estimated their costs at approximately $200,000. The NADA added
that “[a]ny state claims of excessive reporting costs should be weighed against the huge costs
associated with vehicles with hidden histories entering the stream of used vehicle commerce.”

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Response: DOJ disagrees with Illinois’s assessment of start-up costs. Because the proposed rule
did not prescribe a specific user-fee model, Illinois’s estimate of $700,000 in user fees is not
reliable. Additionally, organizations that typically purchase state motor-vehicle records have
signaled that they will continue to purchase state data, as they are unable to purchase the bulk
state data from or through NMVTIS. For this reason, Illinois’s assertion that it will loose
$2,600,000 in revenues likely is unfounded. The only place these organizations can purchase
bulk vehicle data from Illinois is from Illinois – NMVTIS will not sell data in this manner.
While DOJ is not in a position to address Illinois’s estimate of start-up costs, DOJ issued a
solicitation in fiscal years 2007 and 2008 to provide funds to states to support NMVTIS start-up
costs and encouraged states to apply under other unrestricted, eligible funding programs as well.
For many years between FY 1997 and FY 2004, AAMVA also offered funding support to states
based on DOJ grant awards to the operator.
Comment: AAMVA contended that although the Anti-Car Theft Act states that NMVTIS
should be self sustaining, NMVTIS represents an unfunded mandate that has serious impact on
states. AAMVA went on to assert that to achieve full implementation and long-term success,
federal funding of the remaining development work and support for system operation is needed.
Response: The Anti-Car Theft Act requires NMVTIS to be self-sustaining and “not dependent
on federal funds” for its operation. To date, DOJ has invested more than $15 million in
NMVTIS development, combined with investments from the U.S. Department of Transportation,
as well as a reported $30 million investment from AAMVA. Since 1992, less than $2 million
has been collected from user fees. DOJ is concerned that additional investments of federal funds
will be used to support the required “services to states” and will not lead to additional
development of the system. Additionally, DOJ notes that much of the federal funds provided to
states through AAMVA remains unexpended even years after being provided to facilitate
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participation. From 2003 to date, AAMVA and the states have strongly encouraged DOJ to
implement the rules for NMVTIS as a necessary step to system implementation. With rules now
published, system operation and user fees established, and third-party providers generating
additional user fees, it is DOJ’s hope that additional federal funding may not be needed, and that
the system can begin to be self sustaining as originally envisioned.
Comment: AAMVA commented that its Board of Directors recently concluded that AAMVA
will not be able to continue as the system operator if it must subsidize the ongoing development
and operation costs of NMVTIS. As a result, AAMVA expects a decision by August 2009 from
its Board of Directors as to its continued participation as the operator of the system.
Response: DOJ acknowledges AAMVA’s position and, in response, developed a Request for
Information (RFI) that was published to identify prospective new operators and organizations
that could support DOJ should DOJ become the operator. DOJ expects that any new operator, if
not DOJ, will comply with the same provisions of this rule and will work with DOJ, AAMVA,
and the NMVTIS stakeholders to perform a seamless transition. The results from the RFI are
being used to identify new ideas and capabilities to accomplish the program objectives while
minimizing the burden on states.
Provisions of this rule.
The continued implementation of NMVTIS and its effectiveness depend on the
participation and cooperation of a number of parties. According to the cost-benefit study
conducted by the Logistics Management Institute: “The way NMVTIS is implemented
–piecemeal, regionally, or nationally – will affect how criminals respond. Criminals are highly
mobile and may avoid NMVTIS states until most of the country is covered by the system.
Criminals use technology to their advantage, both to identify potential theft targets and to
camouflage stolen vehicles.” As a result, any states not fully participating in NMVTIS and their
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citizens may be disproportionately targeted by criminals committing vehicle crimes. This
finding has been repeatedly confirmed by law enforcement at the local, state, and federal levels,
and by national anti-theft organizations based on experience and active investigations. Even
private vehicle-history providers have agreed that criminals exploit these and similar weaknesses
in the vehicle-titling system in the U.S., particularly the lack of communication between state
motor vehicle title and registration agencies. The Anti-Car Theft Act also referred to the
“weakest link” in referring to this problem as it relates to brand washing. See Pub. L. No. 102519, section 140(a)(1).
Participation in NMVTIS must be expanded to all states. In addition, insurance carriers,
junk yards, and salvage yards also need to provide certain information relevant to the life-cycle
of an automobile in order for NMVTIS to function properly and achieve the intended benefits.
The Anti-Car Theft Act requires junk yards, salvage yards, and insurance carriers to report at
least monthly to NMVTIS on all junk and salvage automobiles they obtain. Pursuant to 49
U.S.C. 30504(c), the Attorney General is authorized to issue regulations establishing procedures
and practices to facilitate reporting the required information in the least-burdensome and costly
fashion.
Accordingly, this rule implements the reporting requirements imposed on junk yards,
salvage yards, and insurance carriers pursuant to 49 U.S.C. 30504(c). In addition, this rule
clarifies, consistent with section 202(a)(1) of the Act, the title and related information to be
included in the system to determine its adequacy, timeliness, reliability, and capability of aiding
in efforts to prevent theft and fraud. The rule also clarifies the various responsibilities of the
operator of NMVTIS, states, junk yards, salvage yards, and insurance carriers under the Anti-Car
Theft Act to help ensure its effectiveness. Finally, this rule provides a means by which user fees

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will be imposed to fund NMVTIS, consistent with the requirements of the Anti-Car Theft Act
and its requirement that NMVTIS be self sustaining and “not dependent on Federal funds.”
1. State responsibilities.
The effectiveness of NMVTIS increases as more states fully participate. NMVTIS will
only be as good as the quality and quantity of information it contains. Consequently, all nonparticipating states are strongly urged to comply with their obligations under the Anti-Car Theft
Act and to begin title verifications and reporting title information to NMVTIS as soon as
possible. While the immediate requirement of this rule is to, at a minimum, have all states make
verifications on incoming, out-of-state titles and provide regular (at least daily) data updates to
NMVTIS, the ultimate goal is for all states to participate in the system via an integrated, online
method that provides real-time data updates, making inquiries into NMVTIS prior to issuing new
titles on vehicles coming from out-of-state, and sharing other information and data
electronically, via NMVTIS.
In accordance with 49 U.S.C. 30502, NMVTIS must provide a means of determining
whether a title is valid, where the automobile previously was titled, the automobile’s reported
mileage, if the automobile is titled as a junk or salvage automobile in another state, and whether
the automobile has been reported as a junk or salvage automobile under 49 U.S.C. 30504. Each
state is required to make its titling information available to NMVTIS. 49 U.S.C. 30503(a). Each
state also is required “to establish a practice of performing an ‘instant’ title verification check
before issuing a certificate of title.” 49 U.S.C. 30503(b). This rule clarifies the procedures for
verifying title information and the information states must report to NMVTIS pursuant to the
Anti-Car Theft Act, and the procedures and practices that states must follow to provide this
needed information. Pursuant to 49 U.S.C. 30503(a), states are required to perform an “instant”
title verification check before issuing a certificate of title to an individual or entity bringing a
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vehicle into the state. Because several states are “central issue” states where titles are produced
at a central location after an application for title has been made, “instant” is considered to mean
at any point before a permanent title is issued. The primary purpose of the verification is to
determine the validity and status of a document purporting to be a certification of title, to
determine whether the automobile has been a junk or salvage vehicle or has been reported as
such, to compare and verify the odometer information presented with that reported in the system,
and to determine the validity of other information presented (e.g., lien-holder status, etc.). While
the laws and regulations of the receiving state will prevail in determining the status of the
vehicle (e.g., branding, title type, or status), the information in NMVTIS should be used by the
state to identify inconsistencies, errors, or other issues, and to follow state procedures and
policies for their resolution. Because NMVTIS can prevent many types of fraud in addition to
simple brand washing, states are encouraged to use NMVTIS for verifications on all transactions
whenever possible. This verification includes in-state title transactions, dealer reassignments,
lender and dealer verifications, updates, corrections, and other types of title transactions. This
business process is made possible through the integrated, online method of state participation
and is strongly encouraged by law enforcement, consumer protection groups, and private sector
entities.
States are also required under U.S.C. 30503(a) to make selected titling information they
maintain available for use in NMVTIS. Specifically, states are required to report: 1) an
automobile’s VIN; 2) any description of the automobile included on the certificate of title,
including all brand information; 3) the name of the individual or entity to whom the title
certificate was issued; and 4) information from junk or salvage yard operators or insurance
carriers regarding their acquisition of junk automobiles or salvage automobiles, if this
information is being collected by the state. The Anti-Car Theft Act also requires that the
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operator of NMVTIS make available the odometer mileage that is disclosed pursuant to 49
U.S.C. 32705 on the date the certificate of title was issued and any later mileage information, if
in the state’s title record for that vehicle. Accordingly, the rule requires states to provide such
mileage information to NMVTIS. States shall provide new title information and any updated
title information to NMVTIS at least once every 24 hours.
In addition, with the approval of DOJ, the operator, and the state, the rule will allow the
state to provide any other information that is included on a certificate of title or that is
maintained by the state in relation to the certificate of title.
The Anti-Car Theft Act specifically covers “automobiles” as defined in 49 U.S.C.
32901(a). That definition, which is part of the fuel economy laws, was most recently amended
by the Energy Independence and Security Act of 2007, Pub. L. No. 110-140, and generally
covers vehicles with 4-wheels that are rated at less than 10,000 pounds gross vehicle weight, but
excludes vehicles that operate on rails, certain vehicles manufactured in different stages by two
or more manufacturers, and certain work trucks. Participating states, however, have been
providing information to NMVTIS on other types of motor vehicles3 possessing VINs, such as
motorcycles and various work trucks. Information on these other types of motor vehicles is very
useful to the users of NMVTIS, and law enforcement organizations including DOJ have strongly
encouraged states to continue to provide information on such vehicles in order to reduce the theft
of such vehicles. Therefore, while states only are required to report on automobiles, they are
strongly encouraged to continue reporting to NMVTIS information on all motor vehicles
possessing VINs in their state titling systems.
2. Insurance carriers.
3

Pursuant to 49 U.S.C. 30102(a)(6), a “motor vehicle” means a vehicle driven or drawn
by mechanical power and manufactured primarily for use on public streets, roads, and highways,
but does not include a vehicle operated only on a rail line.
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The Anti-Car Theft Act authorized the Attorney General to issue regulations establishing
procedures by which insurance companies must report monthly to NMVTIS on the junk and
salvage automobiles they obtain. 49 U.S.C. 30504(c). Accordingly, this rule clarifies the
reporting requirements imposed on insurance carriers regarding junk and salvage automobiles.
The Anti-Car Theft Act defines a salvage automobile to mean “an automobile that is damaged by
collision, fire, flood, accident, trespass, or other event, to the extent that its fair salvage value
plus the cost of repairing the automobile for legal operation on public streets, roads, and
highways would be more than the fair market value of the automobile immediately before the
event that caused the damage.” 49 U.S.C. 30501(7). For purposes of clarification, the
Department of Justice has determined that this definition includes all automobiles found to be a
total loss under the laws of the applicable state, or designated as a total loss by the insurance
carrier under the terms of its policies, regardless of whether an insurance carrier retitles the
vehicle into its name or allows the owner to retain the vehicle.
As a practical matter, the determination that an automobile is a total loss (i.e., that the
automobile has been “totaled”) is the logical event that shall trigger reporting to NMVTIS by an
insurance carrier. Insurance carriers are required under this rule to provide NMVTIS with:
1) the VIN of such automobiles; 2) the date on which the automobile was obtained or designated
as a junk or salvage automobile; 3) the name of the individual or entity from whom the
automobile was obtained (owner name or lien-holder name) and who possessed the automobile
when it was designated a junk or salvage automobile; and 4) the name of the owner of the
automobile at the time of the filing of the report with NMVTIS (either the insurance company or
the owner, if owner-retained). DOJ strongly encourages insurers to include the primary reason
for the insurance carrier’s designation of salvage or total loss in this reporting as well. In
accordance with 49 U.S.C. 30504(b), the report must provide such information on “all
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automobiles of the current model year or any of the 4 prior model years that the carrier, during
the prior month, has obtained possession of and has decided are junk automobiles or salvage
automobiles.”
In addition, although not specifically required by the Anti-Car Theft Act or this rule, this
rule will permit insurance carriers to provide the NMVTIS operator with information on other
motor vehicles, including older model automobiles, and other information relevant to a motor
vehicle’s title, including the disposition of such automobiles, and the name of the individual or
entity that takes possession of the vehicle. The reporting of this information by insurance
carriers will help reduce instances in which thieves use the VINs of junk or salvage motor
vehicles on stolen motor vehicles and will assist in preventing and eliminating fraud.
Accordingly, the Department of Justice strongly encourages insurance carriers to report such
additional information to the operator.
3. Junk and salvage yards and auto recyclers.
Under this rule, junk yards and salvage yards are required to provide NMVTIS with the
VIN, the date the automobile was obtained, the name of the individual or entity from whom the
automobile was obtained, and a statement of whether the automobile was crushed or disposed of,
for sale or other purposes. The reporting of this information will be limited to junk yards and
salvage yards located within the United States. Pursuant to the Anti-Car Theft Act, junk and
salvage yards are defined as individuals or entities engaged in the business of acquiring or
owning junk or salvage automobiles for resale in their entirety or as spare parts or for rebuilding,
restoration, or crushing. See 49 U.S.C. 30501(5), (8). “Rebuilding, restoration, and crushing” is
reflective of the varied nature of entities that meet this definition. Included in this definition are
scrap-vehicle shredders and scrap-metal processors, as well as “pull- or pick-apart yards,”
salvage pools, salvage auctions, and other types of auctions, businesses, and individuals that
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handle salvage vehicles (including vehicles declared a “total loss”). A salvage pool is an entity
that acquires junk and salvage automobiles from a variety of parties and consolidates them for
resale at a common point of sale. The pooling of junk and salvage automobiles attracts a large
number of buyers. It is the belief of the Department of Justice and the state and local lawenforcement community that a significant number of these buyers purchase junk and salvage
automobiles at salvage pools in order to acquire VINs or titles that can be used on stolen motor
vehicles or to create cloned motor vehicles for other illicit purposes.
Such entities must report all salvage or junk vehicles they obtain, including vehicles from
or on behalf of insurance carriers, that can reasonably be assumed to be total loss vehicles. Such
entities are not required to report any vehicle that is determined not to meet the definition of
salvage or junk after a good-faith physical and value appraisal conducted by qualified appraisal
personnel entirely independent of any other persons or entities. Second, DOJ has added a
clarification that individuals and entities of this type that handle fewer than 5 vehicles per year
that are determined to be salvage or total loss are not required to report under the salvage yard
requirements, consistent with requirements for automobile dealers, see 49 U.S.C. 32702(2).
Pursuant to 49 U.S.C. 30504(a)(2), junk yards and salvage yards will not be required to
submit reports to NMVTIS if they already report the required information to the state in which
they are located and that state makes available to the operator the information required by this
rule of junk and salvage entities. Because some junk or salvage yards may hold vehicles for
several months or years before a final disposition (e.g., crushed, sold, rebuilt, etc.) is known,
some junk and salvage yards may need to provide a supplemental or additional report at the time
of disposition or within 30 days of the date of disposition. Nothing in this rule shall preclude a
junk or salvage yard from reporting the disposition of a vehicle at the time of first reporting, if
such a disposition is known with certainty. Junk and salvage yards are responsible for ensuring
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the accuracy and completeness of their reporting and for providing corrected information to the
system should the disposition be changed from what was initially reported.
4. Lenders and automobile dealers.
The Anti-Car Theft Act requires that the operator make NMVTIS information available
to prospective purchasers, including auction companies and entities engaged in the business of
purchasing new or used automobiles. The Department believes that the scope of prospective
purchasers also includes lenders who are financing the purchase of automobiles and automobile
dealers. Lenders and dealers are integral components of the automobile purchasing and titling
process who also can be the victims of fraud. This rule allows the operator to permit public and
private entities involved in the purchasing and titling of automobiles to access NMVTIS if such
access will assist in efforts to prevent the introduction or reintroduction of stolen motor vehicles
and parts into interstate commerce and to prevent fraud. For purposes of clarification, this rule
permits commercial consumers to access and verify NMVTIS information at the time of
purchases as well as at any time during the ownership of or involvement with such vehicles (i.e.,
lender verifications). States are strongly encouraged to work with lenders and others in using
NMVTIS as an electronic means of performing title transactions and verifications. Conducting
such efforts in an electronic fashion will eliminate a major source of fraud – paper-based title
exchanges, updates, lien releases, etc.
5. Responsibilities of the operator of NMVTIS.

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In accordance with 49 U.S.C. 30502, NMVTIS must provide a means of determining
whether a title is valid, where the automobile previously was titled, the automobile’s reported
mileage, if the automobile is titled as a junk or salvage automobile in another state, and whether
the automobile has been reported as a junk or salvage automobile under 49 U.S.C. 30504.
Further, the operator of NMVTIS must make relevant information available to states, law
enforcement officials, prospective and current purchasers (individual and commercial), and
prospective and current insurers. This rule clarifies that the operator of NMVTIS will be
responsible for collecting the required information and providing the necessary access to all
permitted users.
The Department will instruct the operator that if it is not receiving reporting entity data
directly, then it must identify at least three third-party organizations willing to receive reports
from reporting entities (junk, salvage, insurance) and to share such data with NMVTIS. The
operator also will take steps to ensure data quality to the extent possible and take steps as
described in this rule to correct reported data , if not reported by a state, which has the authority
to make changes via updates.
The operator will be using the National Information Exchange Model (NIEM) or any
successor information-sharing model for all new information exchanges established, and DOJ
may require the operator to use web services for all new connections to NMVTIS.
Services to state motor vehicle title administrations.
The operator will:
!

Make available to state motor vehicle title administrations at least two methods of

interacting with NMVTIS. States will have the option of participating via “stand alone”
access, which is a basic internet site that allows a state to enter a VIN and receive the
results of the search. States currently have the option of fully integrating the NMVTIS
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search function into their title-information systems. This method of access allows state
systems to perform the search seamlessly and without specific effort of the titling staff.
This method allows updates made after the title transaction to be shared with the prior
state of title and allows real-time updates to NMVTIS as well. The operator also will
make available a modified stand-alone access process (that allows for batch inquiries) to
central-issue states to support their efficient title administration needs.
!

Share with states any and all information in NMVTIS, including any intended

export criteria, junk and salvage history, and any other information obtained by the
operator (e.g., title history information from other North American title administrations,
etc.).
!

Provide the states with the greatest amount of flexibility in data standards,

mapping, connection methodology, etc.
Services to law enforcement.
In particular, the operator of NMVTIS will be responsible for ensuring that state and
local law enforcement agencies have access to all title information in or available through
NMVTIS, including personal information collected by NMVTIS for law-enforcement purposes.
A thief can take a stolen, cloned vehicle to a non-participating state, and get a valid title by
presenting the clone and matching fraudulent ownership documentation to the new state.
Thieves often switch the VIN plate (and sometime other VIN stickers) of a stolen motor vehicle
with one from a junked car in order to get a valid title for the stolen car. These activities were
possible because the states had no instantly updated, reliable way of validating the information
on the ownership documentation prior to issuing the new title. Investigations have shown that
sophisticated criminal organizations typically employ fraud schemes involving multiple statetitle processes and either target non-participating states as the new title-issuing agent or use
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fraudulent or counterfeit title documents from a non-participating state in order to effect brand
washing or cloning. Exported vehicles also have become a key source for cloning activities.
NMVTIS will provide law enforcement agencies with access to make inquiries to further their
investigations of motor vehicle theft and fraud – including fraud committed against consumers,
businesses, and states. This access will allow law enforcement agencies to better identify stolen
motor vehicles, enhance their ability to identify vehicle theft rings, identify cases of public
corruption, and identify other criminal enterprises involving vehicles. NMVTIS will reduce the
ability of organized criminal organizations to obtain fraudulent vehicle registrations by linking
state and local authorities with real-time verification of information. This system also will
provide an additional tool to identify and investigate international organized criminal and
terrorist activity. NMVTIS will assist investigations of vehicles involved in violent crimes,
smuggling (narcotics, weapons, undocumented aliens, and currency), and fraud. In addition to
providing access to NMVTIS based on a VIN inquiry, the operator also will allow law
enforcement agencies to make inquiries based on other search criteria in the system, including
the organizations reporting data to the system, individuals owning, supplying, purchasing, or
receiving such vehicles (if available), and export criteria.
Services in support of consumer access.
The operator of NMVTIS is responsible for ensuring that a means exists for allowing
insurers and purchasers to access information, including information regarding brands, junk and
salvage history, and odometer readings. Such access shall be provided to individual consumers
in a single-VIN search arrangement and to commercial consumers in a single-, multiple-, or
batch-VIN search arrangement. As noted above, motor vehicles that incur significant damage
are considered “junk” or “salvage.” Fraud occurs when junk or salvage motor vehicles are
presented for sale to purchasers without disclosure of their real condition or history. Not only
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are unsuspecting purchasers paying more than the motor vehicle is worth, but they do not know
if the damaged vehicles have been adequately repaired and are safe to drive. For example,
during Hurricane Katrina, thousands of motor vehicles were completely flooded, and many
remained under water for weeks before flood waters subsided. Many of these flooded motor
vehicles were taken to other states where they were cleaned and sold as purportedly undamaged
used cars, despite the damage caused by the flood, which jeopardizes the motor vehicles’
electrical and safety systems. In several reported cases, consumers purchased vehicles that had
previously been involved in a collision, and airbags were not reinstalled. These consumers were
later killed in a collision where the airbags could not deploy because they were no longer
present. This fraud has serious consequences, not only for commerce and law enforcement, but
also for highway and citizen safety.
The cost for web-based prospective-purchaser inquiries for individuals shall be nominal
and take into consideration the potential that consumers may lack credit cards or internet access.
Consumer-access fees charged by the operator may be in addition to fees that may be charged by
other public or private entities participating in providing the service. While this rule does not
establish minimum or maximum fees for such consumer access in order to allow it to remain
“market-driven” and flexible, the Department requires that all consumer-access fees and
methods be approved by the Department prior to enactment.
The Department anticipates that the operator will implement a web-based method of
permitting prospective purchasers to access NMVTIS information as required by the Act.
Consumer access shall be available to individual and commercial consumers who are
considering purchasing a vehicle or have recently purchased a vehicle. Consumers accessing
NMVTIS shall receive an indication of and link to the current state of title, the brand history

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(name of brand/brand category), the most recent odometer information in the system, and any
reports on the subject vehicle(s) from junk or salvage yards.
Privacy and security protections for NMVTIS.
The operator may not release any personal information to individual prospective
purchasers. The operator also will develop a privacy policy that will address the release of this
information as well. The operator also will ensure that NMVTIS and associated access services
(i.e., secure networks used to facilitate access to personal information included in NMVTIS)
meet or exceed technology industry security standards, most notably any relevant Global Justice
Information Sharing Initiative standards and recommendations.
Accountability and transparency.
The operator shall publish an annual report describing the performance of the system
during the preceding year and shall include a detailed report of NMVTIS expenses and all
revenues received as a result of NMVTIS operation. Additionally, the operator (if not the
Department of Justice) shall be required to procure an independent financial audit of NMVTIS
expenses and revenues during the preceding year. Both the annual performance and budget
report and the independent audit report shall be publicly available via www.NMVTIS.gov.
Although DOJ has primary enforcement responsibility for the provisions of this rule, the
operator shall conduct regular reviews of reporting compliance by all reporters to assess the
extent to which reporting entities are reporting appropriately, documentation is in place, and
other requirements of reporting are being met. The operator shall provide the results of such
information to DOJ. The operator shall also maintain a publicly available, regularly updated
listing of all entities reporting to NMVTIS. Such listing shall include the name of the reporting
entity, city/state, contact information, and last-data-reported date.

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6. User fees.
Pursuant to 49 U.S.C. 30502(c), NMVTIS is to be “paid for by user fees and should be
self-sufficient and not be dependent on amounts from the United States Government. The
amount of fees the operator collects and keeps . . . subject to annual appropriations laws,
excluding fees the operator collects and pays to an entity providing information to the operator,
may be not more than the costs of operating the System.” Rather than charge states user fees
based on the number of transactions they place with NMVTIS, AAMVA (the operator of
NMVTIS) currently employs a 10-tiered fee structure. The fee a particular state is charged
depends on the tier in which that state is placed based on the number of currently titled motor
vehicles in that state. As a result of the great disparity between the states in their total number of
titled motor vehicles, the per-vehicle fee currently charged by the operator of NMVTIS ranges
from less than 1 cent per vehicle in the states with the most titled motor vehicles to nearly 7
cents per vehicle in the state with the lowest number of titled motor vehicles. This fee structure
was developed by AAMVA and approved by its Board of Directors, comprising state motor
vehicle administrators. As noted above, AAMVA is a nonprofit, tax-exempt, educational
association representing U.S. and Canadian officials who are responsible for the administration
and enforcement of motor vehicle laws.
This rule requires the operator (if not the Department of Justice) to continue to charge
user fees to all states based on the total number of motor vehicles titled in the state and to
continue the tiered structure. Such a pro rata fee structure simplifies billing for both the states
and the operator of NMVTIS. In addition, a state would not be subject to a significant change in
user fees if it moves from one tier to another. Last, a pro rata fee structure eliminates any
disincentive for states to make title verifications and encourages all states to participate in order
to receive the benefits of the system they are funding.
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In addition, the Department of Justice requires that the operator charge user fees to all
states, even if a state is not a current participant in NMVTIS. In accordance with 49 U.S.C.
30503(a) and (b), each state is required to participate in the system, which includes making
titling information available to NMVTIS, conducting title-verification checks before issuing a
title, and paying any user fees. Because all states are required to participate in NMVTIS, this
rule requires that the operator charge user fees to all states, regardless of their current level of
participation. Further, this rule requires that the operator notify states at least one year in
advance of user fees and invoice every state at least once per year. This schedule shall remain in
place until modified by agreement with DOJ.
Under this rule, and consistent with the Anti-Car Theft Act, users, such as purchasers,
insurers, consumers, and other non-governmental entities, may be charged a fee for inquiries
they make to NMVTIS. Because of the varying levels of participation by the states, the
Department has decided to eliminate the proposed provision prohibiting the operator from
charging transaction fees for consumer transactions performed by fully participating states.
However, the Department retains the authority to allow the operator to discount such fees for
fully participating states. The operator shall not charge any user fees or transaction fees for
inquiries made by law enforcement agencies. The operator shall ensure that all third-party
providers of NMVTIS information are eligible for the same prices and discounts, based on the
product implemented or provided (e.g., single VIN lookup, batch look up, etc.). The operator
shall require that all providers and methods of consumer access include a visible notice and
disclaimer, or a link to such a notice or disclaimer, that provides consumers with accurate
information on what NMVTIS includes and any limitations in the database. The names of all
noncompliant states shall be disclosed to each consumer for purposes of awareness. Providers
and methods of consumer access also will include a link to operator-provided information that
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explains to consumers how NMVTIS works, such as how different reporting streams may
explain variances or seemingly conflicting information. Those providers and methods of
consumer access also will provide a link to a state’s brand definitions if those brands are
displayed and the information is available.
The expenses to be recouped by the operator of NMVTIS through its fees will consist of
labor costs, data center operations costs, the cost of providing access to authorized users, annual
functional-enhancement costs (including labor and hardware), the cost of technical upgrades,
costs to comply with the provisions of this rule, and other costs as approved by the Department
of Justice in advance of the expense. The operator is authorized to develop a systemenhancement reserve that does not exceed 50% of the annual cost of operating the system for use
in ensuring that critical upgrades can be implemented on an emergency basis as necessary.
AAMVA currently estimates that the annual cost of operating NMVTIS is approximately
$5,650,000. According to DOT’s 2005 Highway Statistics, 241,193,974 vehicles were titled in
the United States in 2005. Therefore, the cost to fund NMVTIS will average less than 3 cents
per motor vehicle title, although states in different tiers may pay slightly different rates. The
operator of NMVTIS will inform the states of the applicable fees either through publication in
the Federal Register or by direct notice or invoicing to the states.
The operator will be required to recalculate its fees on at least a biennial (every two
years) basis at least one year in advance of their effective date. Any fees charged to the states
would be offset by transaction fees received by the operator. In addition, the total fees charged
to the states would be reduced by future funds awarded by the U.S. Government to the operator
to assist in implementing the system. Any fees imposed by the operator in connection to
NMVTIS must be approved by the Department of Justice.

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Notwithstanding individual and batch lookups or inquiries, the operator shall not, under
any circumstances, sell a state’s entire data set in bulk or sell the entire NMVTIS data set in
bulk.
Since Fiscal Year 1997, the Department of Justice, through BJA, has provided over $15
million to AAMVA for NMVTIS implementation. In Fiscal Years 2007-2009, BJA invited
states to apply for direct funding from DOJ to support initial NMVTIS implementation. In fiscal
years 2007 and 2008, less than six states applied for funds each year. BJA awarded funds to five
states in fiscal year 2007 and one state in 2008 to support system implementation. BJA also
invited AAMVA, the system operator, to apply for direct funding from BJA in fiscal years 2007
and 2008, to supplement state participation fees received by AAMVA, as authorized under the
Anti-Car Theft Act, and encouraged states to apply through its other funding programs to
enhance NMVTIS participation. As a result of these solicitations, funding was awarded to
AAMVA to assist with NMVTIS implementation in fiscal years 2007 and 2008. As noted
above, funds awarded to the operator of NMVTIS will reduce the amount of user fees that must
be imposed to implement NMVTIS once all states are participating.
7. Governance.
The Department of Justice may establish a NMVTIS Advisory Board to provide input
and recommendations from stakeholders on NMVTIS operations and administration. If created,
the Advisory Board’s costs would be supported by the operator after approval of the Department
of Justice.
Regulatory Flexibility Act.
The Attorney General, in accordance with the Regulatory Flexibility Act,
5 U.S.C. 605(b), has reviewed this regulation and by approving it certifies that this regulation
will not have a significant economic impact on a substantial number of small entities.
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Although the reporting requirements imposed by the Anti-Car Theft Act will apply to all
small insurance companies and small junk and salvage yard operators that handle junk or salvage
automobiles, the Department believes that the incremental cost for these entities to collect VINs
and the other required information will be minimal and that the rule will not have a significant
economic impact on them. Many insurance companies and junk and salvage yards already
capture VINs as a means of positively identifying automobiles and tracking inventory. The
additional cost to insurance companies, junk yard operators, and salvage yard operators to report
the collected information electronically to NMVTIS is not expected to exceed 1 cent per motor
vehicle for most entities after the first year. In the first year only, start-up investments increase
this per-vehicle cost to approximately 4 cents per vehicle. For the estimated small number of
non-automated reporting entities, a manual reporting process may be required, in which case the
additional cost is estimated at 96 cents per vehicle annually. In the first year only, the cost for
these entities is estimated at $1.86 per vehicle due to initial investment or start-up needs. Indeed,
these costs may be significantly lower or possibly even eliminated altogether if insurance,
salvage, and junk data is provided through a third party that may already have access to the data
and may be in a position to establish a data-sharing arrangement with NMVTIS in order to
reduce the reporting burden on these entities.
Moreover, insurance companies will not be required to provide data on automobiles older
than the four previous model years. In addition, junk and salvage yards will not be required to
report if they already report the required information to the state and the state makes that
information available to the operator. The Department has attempted to minimize the impact of
the rule on small businesses by allowing them to use third parties to report the statutorily
required information to NMVTIS. In addition, the monthly reporting requirements of this rule

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only apply to automobiles obtained by the business within the prior month or in cases where an
update or correction to previously reported data is needed.
Paperwork Reduction Act
This information collection has been submitted to the Office of Management and Budget
(OMB) for review in accordance with the procedures of the Paperwork Reduction Act of 1995,
Public Law No. 104-13, 109 Stat. 163. If additional information is required contact: Lynn
Bryant, Department Clearance Officer, United States Department of Justice, Justice Management
Division, Policy and Planning Staff, Patrick Henry Building, Suite 1600, 601 D Street NW.,
Washington, DC 20530.
Unfunded Mandates Reform Act of 1995.
This rule will not result in the expenditure by state, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one year, and it will not
significantly or uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
Small Business Regulatory Enforcement Fairness Act of 1996.
This rule is not a major rule as defined by section 251 of the Small Business Regulatory
Enforcement Fairness Act of 1996, 5 U.S.C. 804. This rule will not result in a major increase in
costs or prices or have significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based companies to compete with
foreign-based companies in domestic and export markets.
Executive Order 12866.
This regulation has been drafted and reviewed in accordance with Executive Order
12866, “Regulatory Planning and Review,” section 1(b), Principles of Regulation. The
Department of Justice has determined that this rule is a “significant regulatory action” under
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Executive Order 12866, section 3(f). Accordingly, this rule has been reviewed by the Office of
Management and Budget.
Regulatory Impact Assessment.
In 1999, the GAO conducted a review of NMVTIS. The GAO report found that a lifecycle cost and benefits analysis should be performed to determine if further federal funding of
NMVTIS was warranted. Accordingly, at the request of the Department of Justice, the Logistics
Management Institute conducted such an analysis. The 2001 LMI report found that NMVTIS
would achieve significant net benefits if it is fully implemented in all 50 states and the District of
Columbia. In addition, the 2006 IJIS Institute report found that: “the NMVTIS program
provides an invaluable benefit to state vehicle administrators and the public community as a
whole. Advantages of the program include improving the state titling process, as well as
providing key information to consumers and law enforcement agencies.” Based on these
reviews of NMVTIS and the Department’s experience with automobile theft and fraud, the
Department believes that the full implementation of NMVTIS should reduce the market for
stolen motor vehicles, enhance public safety, and reduce fraud. This rule will serve to enhance
the efficacy of NMVTIS by implementing the statutory reporting requirements imposed on junk
and salvage yards and insurance carriers and clarifying the obligations of the states and the
operator of NMVTIS.
The operator of the NMVTIS is entitled to receive revenues from user fees to support the
system. Currently, these fees generate approximately $1.5 million annually. AAMVA,
however, estimates the annual operating cost of the system to be approximately $5,650,000 –
depending on necessary system upgrades that may be required and user volume. Therefore, the
current AAMVA fee structure under-funds NMVTIS by $4,150,000 according to its estimates.
According to the Department of Transportation’s 2005 Highway Statistics, 241,193,974 vehicles
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were titled in the United States in 2005. Therefore, the total cost to the operator to fund
NMVTIS ranges from 1 cent to 2.3 cents per motor vehicle title titled in the U.S.
Consequently, the average fees charged to the states by the operator under this proposed
rule should be less than 3 cents per vehicle. In most cases, states that choose to integrate the
NMVTIS processes of data provision and inquiry into their titling process generally incur onetime upgrade costs to establish these connections. In nearly every case, once a connection to the
system is established, data transmission for uploads and inquiries is automated and occurs
without recurring costs. With these one-time costs and state fees considered, the costs to states
are estimated at 6 cents per vehicle. This scenario includes making the data available to
NMVTIS via real-time updates and making inquiries into the system prior to issuing new titles.
While the frequency of reporting does not impact costs under this scenario, states can lower their
upgrade costs by choosing to integrate the NMVTIS reporting and inquiry requirements into
their business rules but not into their electronic titling processes. In these cases, states would see
lower costs by establishing a regular reporting/data upload process but not re-engineering their
own title-information systems for real-time updates. Under this scenario, instead of a state’s
title-information system automatically making the NMVTIS inquiry, the title clerk would switch
to an internet enabled PC to perform a web search of NMVTIS via a secure virtual private
network (VPN). In addition, the cost is minimized because a state is only required to check outof-state titles. Moreover, because this type of search is internet-based versus state-titleinformation system-based, no changes to the state’s title-information system is required and
therefore there is no cost for this aspect of compliance. For the reporting aspect however (i.e.,
programming an automated batch upload process via file transfer protocol (FTP)), it is
anticipated that states would incur reporting costs of less than 1 cent per vehicle. Assuming the
reporting costs for states are 0.005 cents per vehicle and that 241,193,974 vehicles are titled in
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the United States, the Department estimates that the reporting costs for states is approximately
$1,205,970.
The incremental cost to insurance companies and junk- and salvage-yard operators that
handle junk or salvage automobiles also is expected to be low. Many insurance companies and
junk and salvage yards already capture VINs as a means of positively identifying automobiles
and tracking inventory. Additionally, for both the insurance sector and the junk/salvage
industry, many companies are already reporting much of the required data to independent third
parties who have indicated a willingness to pass this data on to DOJ for NMVTIS use.
According to the NICB, it is estimated that there are approximately 321 insurance groups
representing approximately 3,000 insurers that report an estimated 2.4 million salvage and totalloss records annually (based on the most recent three-year average). Furthermore, based on
2007 insurance data, over 60% of these motor vehicles will originate from the ten largest
insurance groups. These 3,000 insurers would then be responsible for reporting this total-loss
information to NMVTIS if not already reported to a third party that agrees to provide the data to
NMVTIS. In those cases where the data is already reported to a state or to a cooperating third
party, there is no additional cost to insurance carriers. In cases where this data is not currently
reported to a cooperating third party, the carrier would be required to report the data to
NMVTIS. With the assumption that the data is already collected in an exportable format, and
assuming that NMVTIS would establish a reporting mechanism involving a simple FTP-based
solution, the cost to insurance carriers is similar to the state reporting costs of less than 1 cent per
vehicle. The FBI previously has estimated that approximately 10.5 million junk and salvage
vehicles are handled each year. Assuming that it costs insurance carriers approximately 0.005
cents per vehicle to report and that the insurance carriers are required to report on all 10.5

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million junk and salvage vehicles, then the reporting costs to insurance carriers will be
approximately $52,500 annually.
Similarly, junk and salvage yard operators that already are reporting to cooperating third
parties would not be required to report separately. Thus, NMVTIS would impose no additional
burden. For those entities not voluntarily reporting to a cooperating third party, a separate
reporting mechanism would be established. Depending on the type of mechanism established
(e.g., FTP-based solution, form-fax solution, etc.), the costs will vary. It is assumed that all junk
and salvage yard operators already collect much of the information required under the rule, and
therefore, it is only the transmission of this data to NMVTIS that will result in costs. The table
below summarizes these cost estimates.

Yard Size Reporting
Initial
Annual
Annual
Method Investment
Ongoing
Vehicle
Costs
Labor Costs Volume*

Fax

$90

12 hours per
year/$96.00

1-200

Total
Total First Year
Annual
Costs (includes
Average
initial
Labor Costs investment costs
per vehicle
and annual
labor costs)
96 cents
$1.86

Small
(nonautomated)
Small FTP
$0
24 minutes per 1-200
3 cents
3 cents
(automated)
year/$3.12
FTP
$0
24 minutes per 201-500 <1 cent
<1 cent
Medium
year/$3.12
FTP
$250
24 minutes per 501-7,800 <1 cent
6 cents
Large
year/$3.12
(* Note: Per-vehicle costs based on an average annual vehicle volumes.)
While it is difficult to estimate how many junk/salvage yards are not automated, the
National Salvage Vehicle Reporting Program and other industry representatives estimate that
nearly all have some form of data collection even if they do not have automation in place. The
National Salvage Vehicle Reporting Program has discussed with many of the inventory-

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management vendors the assistance that can be made available to establish reliable reporting
protocols through its voluntary and independent efforts within the industry. If such assistance is
available from these vendors, nearly all junk/salvage yards will have some form of automation
and be capable of exporting and sending monthly reports electronically.
In cases in which small junk and salvage yards have no form of automation or
computerized files, the Department assumes that a fax or other data transmittal process would be
needed. This paper-based process would likely incur additional labor costs that would bring the
estimated per-vehicle costs for this small number of businesses to approximately 0.96 cents per
vehicle (annual labor costs). However, according to industry representatives, the number of
junk/salvage yards of this size is relatively small (estimated at 20 percent of licensed junk and
salvage yards) and the number of businesses without any automation is even lower (expected to
be less than 1,700 licensed businesses in the U.S.). These businesses would not incur these costs
if already reporting this data to a state or another cooperating third party.
Assuming that small junk and salvage yards handle approximately 170,000 vehicles
annually (at $0.96 per vehicle annual labor costs) and that the remaining junk and salvage yards
handle 10,330,000 vehicles annually (at an average labor cost of 1 cent per vehicle), then the
Department estimates that their annual reporting costs will be approximately $266,500.
The Department anticipates that the cost for web-based prospective-purchaser inquiries
will be nominal. Similarly, the cost to law enforcement to access NMVTIS also is expected to
be minimal because law enforcement will not be charged any direct transaction costs. Law
enforcement will access NMVTIS through their existing infrastructure. The only cost will be to
the operator of the system based on the number of inquiries received from law enforcement. The
expected cost to the operator is less than 12 cents per inquiry.

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The Department of Justice also considered possible alternatives to those proposed in the
rule. Indeed, pursuant to 49 U.S.C. 30504(c), the Attorney General was required to establish
“procedures and practices to facilitate reporting in the least burdensome and costly fashion” on
insurance carriers and junk and salvage yards. Because of the statutory requirements imposed by
the Anti-Car Theft Act, however, the Department of Justice did not have many options regarding
the information that must be provided and the scope of the entities that must report the required
information. In particular, the information required to be reported by the proposed rule is
mandated by the Anti-Car Theft Act. The Department also considered various alternatives for
funding NMVTIS, such as a tiered-based fee structure and a transaction-based fee structure.
Based on the comments to the proposed rule, the Department believes that a tiered fee structure
based on the total number of motor vehicles titled in a state is preferable to these alternatives
because it complies with the Anti-Car Theft Act and minimizes any burden imposed on reporting
entities.
With regard to all sector reporting requirements, in most cases reducing the reporting
timelines from monthly to semi-annually or less will not significantly reduce costs due to the
benefits of automated processes. Additionally, the costs that this reduced reporting would incur
by enabling theft and fraud to continue far outweighs the benefits. Consumers, states, law
enforcement, and others need to know as soon as possible when a vehicle is reported as totaled
or salvage to prevent the vehicle from being turned over to another state or consumer with a
clean title. Moreover, a monthly reporting cycle is expressly required by statute.
Executive Order 13132.
In accordance with section 6 of Executive Order 13132, the Department of Justice has
determined that this rule does not have sufficient federalism implications to warrant a federalism
summary impact statement. The rule does not impose substantial direct compliance costs on
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State and local governments and does not preempt State law. In formulating this rule, the
Department has worked closely with AAMVA regarding the implementation of NMVTIS.
Executive Order 12988.
This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of
Executive Order 12988, Civil Justice Reform.

List of Subjects
28 CFR Part 25
Crime, Law enforcement, Motor vehicles safety, Motor vehicles, Reporting and
recordkeeping requirements, Transportation.
Accordingly, by virtue of the authority vested in me as Attorney General, including 5
U.S.C. 301 and 28 U.S.C. 509 and 510 and, for the reasons set forth in the preamble, part 25 of
chapter I of Title 28 of the Code of Regulations is amended as follows:

PART 25 – DEPARTMENT OF JUSTICE INFORMATION SYSTEMS
1. The Authority citation for part 25 is revised to read as follows:
Authority: Pub. L. 103-159, 107 Stat. 1536, 49 U.S.C. 30501-30505; Pub. L.
101-410, 104 Stat. 890, as amended by Pub. L. 104-134, 110 Stat. 1321.
2. The Table of Contents for part 25 is revised as follows:
PART 25 – DEPARTMENT OF JUSTICE INFORMATION SYSTEMS
*

*

*

Subpart B – National Motor Vehicle Title Information System (NMVTIS)

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Sec.
25.51 Purpose and authority.
25.52 Definitions.
25.53 Responsibilities of the Operator of NMVTIS.
25.54 Responsibilities of the States.
25.55 Responsibilities of Insurance Carriers.
25.56 Responsibilities of Junk yards and Salvage yards.
25.57 Erroneous Reporting
3. Adding a new subpart B to read as follows:
Subpart B – National Motor Vehicle Title Information System (NMVTIS)

§ 25.51 Purpose and authority.
The purpose of this subpart is to establish policies and procedures implementing the
National Motor Vehicle Title Information System (NMVTIS) in accordance with Title 49 U.S.C.
30502. The purpose of NMVTIS is to assist in efforts to prevent the introduction or
reintroduction of stolen motor vehicles into interstate commerce, protect states and individual
and commercial consumers from fraud, reduce the use of stolen vehicles for illicit purposes
including fundraising for criminal enterprises, and provide consumer protection from unsafe
vehicles.

§ 25.52 Definitions.
For purposes of this subpart B:
“Acquiring” means owning, possessing, handling, directing, or controlling.
“Automobile” has the same meaning given that term in 49 U.S.C. 32901(a).
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“Certificate of title” means a document issued by a state showing ownership of an
automobile.
“Insurance carrier” means an individual or entity engaged in the business of
underwriting automobile insurance.
“Junk automobile” means an automobile that –
(A) is incapable of operating on public streets, roads, and highways; and
(B) has no value except as a source of parts or scrap.
“Junk yard” means an individual or entity engaged in the business of acquiring or
owning junk automobiles for –
(A) resale in their entirety or as spare parts; or
(B) rebuilding, restoration, or crushing.
“Motor vehicle” has the same meaning given that term in 49 U.S.C. 3102(6).
“NMVTIS” means the National Motor Vehicle Title Information System.
“Operator” means the individual or entity authorized or designated as the operator of
NMVTIS under 49 U.S.C. 30502(b), or the office designated by the Attorney General, if there is
no authorized or designated individual or entity.
“Purchaser” means the individual or entity buying an automobile or financing the
purchase of an automobile. For purposes of this subpart, purchasers include dealers, auction
companies or entities engaged in the business of purchasing used automobiles, lenders financing
the purchase of new or used automobiles, and automobile dealers.
“Salvage automobile” means an automobile that is damaged by collision, fire, flood,
accident, trespass, or other event, to the extent that its fair salvage value plus the cost of
repairing the automobile for legal operation on public streets, roads, and highways would be
more than the fair market value of the automobile immediately before the event that caused the
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damage. Salvage automobiles include automobiles determined to be a total loss under the law of
the applicable jurisdiction or designated as a total loss by an insurer under the terms of its
policies, regardless of whether or not the ownership of the vehicle is transferred to the insurance
carrier.
“Salvage yard” means an individual or entity engaged in the business of acquiring or
owning salvage automobiles for –
(A) resale in their entirety or as spare parts; or
(B) rebuilding, restoration, or crushing.
For purposes of this subpart, vehicle remarketers and vehicle recyclers, including scrap vehicle
shredders and scrap metal processors as well as “pull- or pick-apart yards,” salvage pools,
salvage auctions, and other types of auctions handling salvage or junk vehicles (including
vehicles declared a “total loss”), are included in the definition of “junk or salvage yards.”
“State” means a state of the United States or the District of Columbia.
“Total loss” means that the cost of repairing such vehicles plus projected supplements
plus projected diminished resale value plus rental reimbursement expense exceeds the cost of
buying the damaged motor vehicle at its pre-accident value, minus the proceeds of selling the
damaged motor vehicle for salvage.
“VIN” means the vehicle identification number;

§ 25.53 Responsibilities of the Operator of NMVTIS
(a) The operator shall make available:
(1) to a participating state on request of that state, information in NMVTIS about
any automobile;

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(2) to a Government, state, or local law enforcement official on request of that
official, information in NMVTIS about a particular automobile, junk yard, or salvage yard;
(3) to a prospective purchaser of an automobile on request of that purchaser,
information in NMVTIS about that automobile; and
(4) to a prospective or current insurer of an automobile on request of that insurer,
information in NMVTIS about the automobile.
(b) NMVTIS shall permit a user of the system to establish instantly and reliably:
(1) The validity and status of a document purporting to be a certificate of title;
(2) Whether an automobile bearing a known VIN is titled in a particular state;
(3) Whether an automobile known to be titled in a particular state is or has been a
junk automobile or a salvage automobile;
(4) For an automobile known to be titled in a particular state, the odometer
mileage disclosure required under 49 U.S.C. 32705 for that automobile on the date the certificate
of title for that automobile was issued and any later mileage information, if noted by the state;
and
(5) Whether an automobile bearing a known VIN has been reported as a junk
automobile or a salvage automobile under 49 U.S.C. 30504.
(c) The operator is authorized to seek and accept, with the concurrence of the
Department of Justice, additional information from states and public and private entities that is
relevant to the titling of automobiles and to assist in efforts to prevent the introduction or
reintroduction of stolen motor vehicles and parts into interstate commerce. The operator,
however, may not collect any social security account numbers as part of any of the information
provided by any state or public or private entity. The operator may not make personally
identifying information contained within NMVTIS, such as the name or address of the owner of
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an automobile, available to an individual prospective purchaser. With the approval of the
Department of Justice, the operator may allow public and private entities that provide
information to NMVTIS to query the system if such access will assist in efforts to prevent the
introduction or reintroduction of stolen motor vehicles and parts into interstate commerce.
(d) The operator shall develop and maintain a privacy policy that addresses the
information in the system and how personal information shall be protected. DOJ shall review
and approve this privacy policy.
(e) The means by which access is provided by the operator to users of NMVTIS must be
approved by the Department of Justice.
(f) The operator shall biennially establish and at least annually collect user fees from the
states and users of NMVTIS to pay for its operation, but the operator may not collect fees in
excess of the costs of operating the system. The operator is required to recalculate the user fees
on a biennial basis. After the operator establishes its initial user fees for the states under this
section, subsequent state user fees must be established at least one year in advance of their
effective date. Any user fees established by the operator must be established with the approval
of the Department of Justice. The operator of NMVTIS will inform the states of the applicable
user fees either through publication in the Federal Register or by direct notice or invoice to the
states.
(1) The expenses to be recouped by the operator of NMVTIS will consist of labor
costs, data center operations costs, the cost of providing access to authorized users, annual
functional enhancement costs (including labor and hardware), costs necessary for implementing
the provisions of this rule, the cost of technical upgrades, and other costs approved in advance by
the Department of Justice.

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(2) User fees collected from states should be based on the states’ pro rata share of
the total number of titled motor vehicles based on the Highway Statistics Program of the Federal
Highway Administration, U.S. Department of Transportation, except in cases where states did
not report to that program in which case the states shall make available the most recent statistics
for motor vehicle title registrations.
(3) All states, regardless of their level of participation, shall be charged user fees
by the operator.
(4) No fees shall be charged for inquiries from law enforcement agencies.
(g) The operator will establish procedures and practices to facilitate reporting to
NMVTIS in the least burdensome and costly fashion. If the operator is not the Department of
Justice, the operator must provide an annual report to the Department of Justice detailing the fees
it collected and how it expended such fees and other funds to operate NMVTIS. This report
must also include a status report on the implementation of the system, compliance with reporting
and other requirements, and sufficient detail and scope regarding financial information so that
reasonable determinations can be made regarding budgeting and performance. The operator
shall procure an independent financial audit of NMVTIS revenues and expenses on an annual
basis. The Department of Justice will make these reports available for public inspection.

§ 25.54 Responsibilities of the States
(a) By no later than January 1, 2010, each state shall provide, or cause to be provided by
an agent or third party, to the designated operator and in an electronic format acceptable to the
operator, at a frequency of once every 24 hours, titling information for all automobiles
maintained by the state. The titling information provided to NMVTIS must include the
following:
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(1) VIN;
(2) Any description of the automobile included on the certificate of title
(including any and all brands associated with such vehicle);
(3) The name of the individual or entity to whom the certificate was issued;
(4) Information from junk or salvage yard operators or insurance carriers
regarding the acquisition of junk automobiles or salvage automobiles, if this information is being
collected by the state; and
(5) For an automobile known to be titled in a particular state, the odometer
mileage disclosure required under 49 U.S.C. 32705 for that automobile on the date the certificate
of title for that automobile was issued and any later mileage information, if noted by the state.
(b) With the approval of the operator and the state, the titling information provided to
NMVTIS may include any other information included on the certificates of title and any other
information the state maintains in relation to these titles.
(c) By no later than January 1, 2010, each state shall establish a practice of performing a
title verification check through NMVTIS before issuing a certificate of title to an individual or
entity claiming to have purchased an automobile from an individual or entity in another state or
in cases of title transfers. The check will consist of -(1) communicating to the operator the VIN of the automobile for which the
certificate of title is sought;
(2) giving the operator an opportunity to communicate to the participating state
the results of a search of the information and using the results to determine the validity and status
of a document purporting to be a certification of title, to determine whether the automobile has
been a junk or salvage vehicle or has been reported as such, to compare and verify the odometer

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information presented with that reported in the system, and to determine the validity of other
information presented (e.g., lien-holder status, etc.).
(d) By January 1, 2010, those states not currently paying user fees will be responsible for
paying user fees as established by the operator to support NMVTIS.

§ 25.55 Responsibilities of Insurance Carriers.
(a) By no later than March 31, 2009, and on a monthly basis as designated by the
operator, any individual or entity acting as an insurance carrier conducting business within the
United States shall provide, or cause to be provided on its behalf, to the operator and in a format
acceptable to the operator, a report that contains an inventory of all automobiles of the current
model year or any of the four prior model years that the carrier, during the past month, has
obtained possession of and has decided are junk automobiles or salvage automobiles. An
insurance carrier shall report on any automobiles that it has determined to be a total loss under
the law of the applicable jurisdiction (i.e., state) or designated as a total loss by the insurance
company under the terms of its policies.
(b) The inventory must contain the following information:
(1) The name, address, and contact information for the reporting entity
(insurance carrier);
(2) VIN;
(3) The date on which the automobile was obtained or designated as a junk or
salvage automobile;
(4) The name of the individual or entity from whom the automobile was obtained
and who possessed it when the automobile was designated as a junk or salvage automobile; and

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(5) The name of the owner of the automobile at the time of the filing of the
report.
(c) Insurance carriers are strongly encouraged to provide the operator with information
on other motor vehicles or other information relevant to a motor vehicle’s title, including the
reason why the insurance carrier obtained possession of the motor vehicle. For example, the
insurance carrier may have obtained possession of a motor vehicle because it had been subject to
flood, water, collision, or fire damage, or as a result of theft and recovery. The provision of
information provided by an insurance carrier under this paragraph must be pursuant to a means
approved by the operator.
(d) Insurance carriers whose required data is provided to the operator through an
operator-authorized third party in a manner acceptable to the operator are not required to
duplicate such reporting. For example, if the operator and a private third-party organization
reach agreement on the provision of insurance data already reported by insurance to the third
party, insurance companies are not required to subsequently report the information directly into
NMVTIS.

§ 25.56 Responsibilities of Junk Yards and Salvage Yards and Auto Recyclers.
(a) By no later than March 31, 2009, and continuing on a monthly basis as designated by
the operator, any individual or entity engaged in the business of operating a junk yard or salvage
yard within the United States shall provide, or cause to be provided on its behalf, to the operator
and in a format acceptable to the operator, an inventory of all junk automobiles or salvage
automobiles obtained in whole or in part by that entity in the prior month.
(b) The inventory shall include the following information:

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(1) The name, address, and contact information for the reporting entity (junk,
salvage yard, recycler);
(2) VIN;
(3) The date the automobile was obtained;
(4) The name of the individual or entity from whom the automobile was
obtained;
(5) A statement of whether the automobile was crushed or disposed of, for sale or
other purposes, to whom it was provided or transferred, and if the vehicle is intended for export
out of the United States.
(c) Junk and salvage yards, however, are not required to report this information if they
already report the information to the state and the state makes the information required in this
rule available to the operator.
(d) Junk and salvage yards may be required to file an update or supplemental report of
final disposition of any automobile where final disposition information was not available at the
time of the initial report filing, or if their actual disposition of the automobile differs from what
was initially reported.
(e) Junk and salvage yards are encouraged to provide the operator with similar
information on motor vehicles other than automobiles that they obtain that possess VINs.
(f) Junk- and salvage-yard operators whose required data is provided to the operator
through an operator-authorized third party (e.g., state or other public or private organization) in a
manner acceptable to the operator are not required to duplicate such reporting. In addition, junk
and salvage yards are not required to report on an automobile if they are issued a verification
under 49 U.S.C. 33110 stating that the automobile or parts from the automobile are not reported
as stolen.
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(g) Such entities must report all salvage or junk vehicles they obtain, including vehicles
from or on behalf of insurance carriers, which can be reasonably assumed are total loss vehicles.
Such entities, however, are not required to report any vehicle that is determined not to meet the
definition of salvage or junk after a good-faith physical and value appraisal conducted by
qualified appraisal personnel, so long as such appraisals are conducted entirely independent of
any other interests, persons or entities. Individuals and entities that handle less than five vehicles
per year that are determined to be salvage, junk, or total loss are not required to report under the
salvage-yard requirements.
(h) Scrap metal processors and shredders that receive automobiles for recycling where
the condition of such vehicles generally prevent VINs from being identified are not required to
report to the operator if the source of each vehicle has already reported the vehicle to NMVTIS.
In cases where a supplier’s compliance with NMVTIS cannot be ascertained, however, scrap
metal processors and shredders must report these vehicles to the operator based on a visual
inspection if possible. If the VIN cannot be determined based on this inspection, scrap metal
processors and shredders may rely on primary documentation (i.e., title documents) provided by
the vehicle supplier.

§ 25.57 Erroneous Junk or Salvage Reporting.
(a) In cases where a vehicle is erroneously reported to have been salvage or junk and
subsequently destroyed (i.e., crushed), owners of the legitimate vehicles are encouraged to seek a
vehicle inspection in the current state of title whereby inspection officials can verify via hidden
VINs the vehicle’s true identity. Owners are encouraged to file such inspection reports with the
current state of title and to retain such reports so that the vehicle’s true history can be
documented.
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(b) To avoid the possibility of fraud, the operator may not allow any entity to delete a
prior report of junk or salvage status.

Date

Michael B. Mukasey
Attorney General

147