Monday, 30 September 2002 17:00

Two salvage reform bills signed by CA Governor Davis

The California salvage industry won what the collision repair industry couldn't; a partial victory in Sacramento with the passage of two bills - and the defeat of a third - that begin to level the playing field between licensed salvage yards and the gray market of automotive rebuilders that bids against them for wrecked vehicles. 

Senate Bill 1331, written by Sen. Jackie Speier (D-San Francisco), the same senator who sponsored the ill-fated bill to keep insurers from owning body shops, establishes safety rules for rebuilt vehicles, including inspection by CHP to ensure that the vehicles have working air bags and that the VIN is valid. "The law will save thousands of unsuspecting consumers from buying cars with stolen parts," said Sen. Speier.

A second bill (SB 2076), introduced by State Sen. Dbra Bowen (D-Marina del Rey) makes it more difficult for leasing and rental companies, self-insurers and financial institutions to sell a total loss vehicle without making the disclosure requirements for salvage vehicles. Previously, leasing companies were exempt from the disclosure requirements and the Senate heard testimony that these companies would use the exemption to recycle their wrecks into the salvage pool at higher prices because the title was not branded.

Speier's Senate Insurance committee heard testimony in January that consumers are regularly buying cars, rebuilt from wrecks and declared as total losses by insurers, that do not carry required titles marking them as salvage. There was testimony before the committee that insurers do whatever they can to avoid having the titles branded as salvage because branding them reduces the value of the vehicle.

The bill most sought after by the recycling industry however, Speier's SB 1743, was vetoed by Governor Davis. It would have required the DMV to make available on the Internet a database of salvage titles so that consumers could check the database before buying a used car. More importantly to the recyclers, it would have required that salvage auction companies be licensed, a step recyclers said was critical to leveling the salvage pool playing field and regulating the flow of wrecked vehicles from insurers to rebuilders and back onto the highways.

The State of California Auto Dismantlers Association (SCADA), representing salvage yards throughout the state, took a position in favor of all three bills; automotive recyclers have long complained about losing late model wrecks to gray market rebuilders.

SCADA's lobbyist, Gavin McHugh, wrote in August, "SCADA's top legislative priority continues to be working with Sen. Jackie Speier on her legislative reforms to the management and handling of salvage vehicles."

In vetoing the bill, Gov. Davis said the state could not afford the database or the proposed licensing system, which legislative analysts said would cost an estimated $450,000.


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