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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1989 

                        CHAPTER 188-S.F.No. 834 
           An act relating to consumer protection; requiring 
          motor vehicle damage disclosures and branding 
          certificates of title; amending Minnesota Statutes 
          1988, sections 168A.04, subdivisions 1 and 4; and 
          168A.05, subdivisions 3 and 5; proposing coding for 
          new law in Minnesota Statutes, chapter 325F. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1988, section 168A.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  The application for the first certificate 
of title of a vehicle in this state shall be made by the owner 
to the department on the form prescribed by the department and 
shall contain: 
    (1) the first, middle, and last names, the dates of birth, 
and addresses of all owners who are natural persons, the full 
names and addresses of all other owners; 
    (2) a description of the vehicle including, so far as the 
following data exists, its make, model, year, identifying 
number, type of body, and whether new or used; 
    (3) the date of purchase by applicant, the name and address 
of the person from whom the vehicle was acquired, the names and 
addresses of any secured parties in the order of their priority, 
and the dates of their respective security agreements; 
    (4) with respect to motor vehicles subject to the 
provisions of section 325E.15, the true cumulative mileage 
registered on the odometer or that the actual mileage is unknown 
if the odometer reading is known by the owner to be different 
from the true mileage; and 
    (5) with respect to vehicles subject to sections 6 and 7, 
whether the vehicle sustained damage by collision or other 
occurrence which exceeded 70 percent of the actual cash value; 
and 
    (6) any further information the department reasonably 
requires to identify the vehicle and to enable it to determine 
whether the owner is entitled to a certificate of title, and the 
existence or nonexistence and priority of any security interest 
in the vehicle. 
    Sec. 2.  Minnesota Statutes 1988, section 168A.04, 
subdivision 4, is amended to read: 
    Subd. 4.  If the application refers to a vehicle last 
previously registered in another state or country, the 
application shall contain or be accompanied by: 
    (1) any certificate of title issued by the other state or 
country; 
    (2) any other information and documents the department 
reasonably requires to establish the ownership of the vehicle 
and the existence or nonexistence and priority of any security 
interest in it; 
    (3) the certificate of a person authorized by the 
department that the identifying number of the vehicle has been 
inspected and found to conform to the description given in the 
application, or any other proof of the identity of the vehicle 
the department reasonably requires; and 
    (4) with respect to vehicles subject to sections 6 and 7, 
whether the vehicle sustained damage by collision or other 
occurrence which exceeded 70 percent of actual cash value. 
    Sec. 3.  Minnesota Statutes 1988, section 168A.05, 
subdivision 3, is amended to read: 
    Subd. 3.  [CONTENT OF CERTIFICATE.] Each certificate of 
title issued by the department shall contain: 
    (1) the date issued; 
    (2) the first, middle, and last names, the dates of birth, 
and addresses of all owners who are natural persons, the full 
names and addresses of all other owners; 
    (3) the names and addresses of any secured parties in the 
order of priority as shown on the application, or if the 
application is based on a certificate of title, as shown on the 
certificate, or as otherwise determined by the department; 
    (4) the title number assigned to the vehicle; 
    (5) a description of the vehicle including, so far as the 
following data exists, its make, model, year, identifying 
number, type of body, whether new or used, and if a new vehicle, 
the date of the first sale of the vehicle for use; 
    (6) with respect to motor vehicles subject to the 
provisions of section 325E.15, the true cumulative mileage 
registered on the odometer or that the actual mileage is unknown 
if the odometer reading is known by the owner to be different 
from the true mileage; and 
    (7) with respect to vehicles subject to sections 6 and 7, 
the appropriate term "flood damaged," "rebuilt," or 
"reconstructed"; and 
    (8) any other data the department prescribes. 
    Sec. 4.  Minnesota Statutes 1988, section 168A.05, 
subdivision 5, is amended to read: 
    Subd. 5.  [ASSIGNMENT AND WARRANTY OF TITLE FORMS.] The 
certificate of title shall contain forms for assignment and 
warranty of title by the owner, and for assignment and warranty 
of title by a dealer, and may contain forms for applications for 
a certificate of title by a transferee, the naming of a secured 
party, and the assignment or release of security interests, and 
shall include language necessary to implement sections 6 and 7. 
    Sec. 5.  [325F.664] [NEW MOTOR VEHICLE DAMAGE DISCLOSURES.] 
    Subdivision 1.  [DEFINITION.] For the purposes of this 
section, the term "new motor vehicle" means a motor vehicle as 
defined in section 80E.03, subdivision 7, including vehicles 
driven for demonstration purposes.  
    Subd. 2.  [DISCLOSURE OF DAMAGE EXCEEDING FOUR PERCENT OF 
RETAIL PRICE.] (a) Before the sale of a new motor vehicle, a 
dealer must disclose and describe to the buyer, in a clear and 
conspicuous written statement and orally in the course of the 
sales presentation, any damage to the vehicle of which the 
dealer had actual knowledge, if the dealer's cost of repairs 
exceeded four percent of the manufacturer's suggested retail 
price, or $500, whichever is greater.  
    (b) A manufacturer, distributor, or importer must disclose 
and describe to its franchised dealers, in a clear and 
conspicuous written statement, any repaired damage exceeding 
four percent of the manufacturer's suggested retail price, or 
$500, whichever is greater.  
    (c) Damaged or stolen glass, tires, wheels, bumpers, 
radios, and in-dash audio components are excluded from the 
disclosure requirements of this subdivision if the damaged or 
stolen parts are replaced with identical manufacturer's original 
equipment.  
    Sec. 6.  [325F.6641] [DISCLOSURE OF MOTOR VEHICLE DAMAGE.] 
    Subdivision 1.  [DAMAGE.] (a) If a motor vehicle has 
sustained damage by collision or other occurrence which exceeds 
70 percent of its actual cash value so that the vehicle becomes 
a class C total loss vehicle, the seller must disclose that fact 
to the buyer, if the seller has actual knowledge of the damage.  
    (b) The disclosure required under this subdivision must be 
made in writing on the application for title and registration or 
other transfer document, in a manner prescribed by the registrar 
of motor vehicles.  The registrar shall revise the certificate 
of title form, including the assignment by seller (transferor) 
and reassignment by licensed dealer sections of the form, the 
separate application for title forms, and other transfer 
documents to accommodate this disclosure.  If the seller is a 
motor vehicle dealer licensed pursuant to section 168.27, the 
disclosure required by this section must be made orally by the 
dealer to the prospective buyer in the course of the sales 
presentation.  
    Subd. 2.  [FORM OF DISCLOSURE.] The disclosure required in 
this section must be made in substantially the following form:  
"To the best of my knowledge, this vehicle has ..... has not 
..... sustained damage in excess of 70 percent actual cash 
value."  
    Sec. 7.  [325F.6642] [TITLE BRANDING.] 
    Subdivision 1.  [FLOOD DAMAGE.] If the application for 
title and registration indicates that the vehicle has been 
classified as a class B or C total loss vehicle because of water 
or flood damage, the registrar of motor vehicles shall record 
the term "flood damaged" on the certificate of title and all 
subsequent certificates of title issued for that vehicle.  
    Subd. 2.  [CLASS C VEHICLES.] Upon transfer and application 
for title to all class C total loss vehicles, the registrar of 
motor vehicles shall record the term "rebuilt" on the first 
Minnesota certificate of title and all subsequent Minnesota 
certificates of title used for that vehicle. 
    Subd. 3.  [OUT-OF-STATE VEHICLES.] (a) Upon transfer and 
application for title of all repaired vehicles with out-of-state 
titles that bear the term "damaged," "salvage," "rebuilt," 
"reconditioned," or any similar term, the registrar of motor 
vehicles shall record the term "rebuilt" on the first Minnesota 
certificate of title and all subsequent Minnesota certificates 
of title used for that vehicle.  
    (b) The registrar shall mark "rebuilt" on the first 
Minnesota certificate of title and all subsequent certificates 
of title issued for any vehicle which came into the state 
unrepaired and for which a salvage certificate of title was 
issued unless the person applying for the Minnesota title offers 
proof satisfactory to the registrar that the vehicle did not 
sustain damage equivalent to the 70 percent standard set forth 
in this section.  The proof shall include photographs of the 
vehicle and either an insurance adjuster's written report or a 
written repair estimate which details the parts and labor 
required to repair the vehicle.  The photographs and other 
documents submitted as proof under this subdivision must be 
filed and retained by the registrar so as to permit verification 
of the proof offered. 
    (c) For vehicles with out-of-state titles which bear the 
term "flood damaged," the registrar of motor vehicles shall 
record the term "flood damaged" on the first Minnesota 
certificate of title and all subsequent Minnesota certificates 
of title issued for that vehicle.  
     Subd. 4.  [RECONSTRUCTED VEHICLES.] For vehicles that are 
reconstructed within the meaning of section 168A.15, the 
registrar shall record the term "reconstructed" on the 
certificate of title and all subsequent certificates of title.  
    Subd. 5.  [MANNER OF BRANDING.] The designation of "flood 
damaged," "rebuilt," or "reconstructed" on a certificate of 
title shall be made by the registrar of motor vehicles in a 
clear and conspicuous manner, in a color different from all 
other writing on the certificate of title.  
    Subd. 6.  [CLASS C TOTAL LOSS VEHICLE; DEFINITION.] For the 
purposes of this section, a class C total loss vehicle means a 
vehicle, damaged by collision or other occurrence, for which a 
salvage certificate of title has been issued and vehicles with 
damage of at least 70 percent of the vehicle's actual cash value 
immediately prior to sustaining the damage based on a written 
retail repair estimate or invoice, as determined by an insurer 
or dealer pursuant to section 168A.151 or by comparing an 
insurer's written retail repair estimate of damage or actual 
loss payout to the average trade-in value of the vehicle 
according to the National Automobile Dealers Association's 
Official Used Car Guide or other similar publication approved by 
the registrar.  
    Subd. 7.  [DEALER DISCLOSURE.] If a licensed motor vehicle 
dealer offers for sale a vehicle with a branded title, the 
dealer shall orally disclose the existence of the brand in the 
course of the sales presentation.  
     Subd. 8.  [FLOOD DAMAGE; DEALER LOTS.] If a motor vehicle, 
which is part of a licensed motor vehicle dealer's inventory, 
has been submerged or flooded above the bottom of the dashboard 
while parked on the dealer's lot, the dealer must disclose that 
fact in writing to any buyer and must orally disclose that fact 
in the course of a sales presentation to any prospective buyer.  
The buyer must also disclose the existence of the flood damage 
in writing to any subsequent buyer. 
    Sec. 8.  [325F.6643] [REMEDIES; PENALTIES.] 
    (a) A person who violates sections 5 to 7 is subject to the 
remedies and penalties, including a private right of action, 
provided in section 8.31.  
    (b) A person injured by a violation of sections 5 to 7 
shall recover the actual damages sustained, together with costs 
and disbursements, including reasonable attorney fees.  In its 
discretion, the court may increase the award of damages to an 
amount not to exceed three times the actual damages sustained, 
or $2,500, whichever is greater.  
    (c) The relief provided in this section is in addition to 
any remedies otherwise available under the common law or other 
statutes of this state.  
    Sec. 9.  [325F.6644] [APPLICATION.] 
    Sections 6 and 7 do not apply to vehicles that are six 
years old or older as calculated from the first day of January 
of the designated model year or to commercial motor vehicles 
with a gross vehicle rating of 26,000 pounds or more.  
    Sec. 10.  [EFFECTIVE DATE AND TRANSITION.] 
    Section 5 is effective October 1, 1989.  Sections 1 to 4 
and 6 to 9 are effective July 1, 1990.  All certificates of 
title issued after that date must include the disclosure 
language in the assignment by seller (transferor), reassignment 
by licensed dealer sections, and other transfer documents, and 
the appropriate designation "flood damaged," "rebuilt," or 
"reconstructed" as required by section 7.  No title application 
or title transfer shall be rejected by the registrar for failure 
to include the disclosures required by sections 1 to 7 if the 
application for title, the assignment by seller (transferor), 
reassignment by licensed dealer, or other transfer documents 
have not been revised to include the appropriate form for 
disclosure pursuant to section 6, subdivision 2. 
    Presented to the governor May 18, 1989 
    Signed by the governor May 19, 1989, 8:51 p.m.