The U.S. General Accounting Office (GAO) was asked by U.S. Sen. John Ashcroft, chairman of the Subcommittee on Consumer Affairs, Foreign Commerce and Tourism of the Senate Commerce, Science and Transportation Committee, to review the Anti-Car Theft Act of 1992. In particular, Ashcroft asked that the GAO review federal funding of the vehicle title system.

Congress passed the Anti-Car Theft Act of 1992 to counter what it perceived as the No. 1 property crime in the United States, car theft. Congressional hearings had determined that stolen cars were profitable in three ways:

• Thieves took the stolen car to a chop shop where the car was dismantled and its parts were sold as replacement parts for other vehicles,
• They obtained an apparently valid title for the car and then sold it to a third party,
• Thieves exported the vehicle for sale abroad.
• The Anti-Car Theft Act also established a federal advisory committee to assist in stolen vehicle policy. The Federal Bureau of Investigation led the federal advisory committee. The Automotive Service Association represented the independent repair industry.

Originally the Act called for the U.S. Department of Transportation to develop a National Motor Vehicle Title Information System (NMVTIS). This was later moved to the U.S. Justice Department by language in the Anti-Car Theft Improvements Act of 1996. This system, in theory, would allow users to reliably validate out-of-state motor vehicle titles for states that are retitling a vehicle and provide a history of the vehicle being retitled (odometer reading, salvage information, etc.), according to the GAO.

Ashcroft raised concerns in the summer of 1998 about the development of the NMVTIS. The two issues were the current status of NMVTIS, and whether the Justice Department had evaluated the expected costs and benefits of NMVTIS to ensure that additional federal investment in the system was justified. GAO agreed to investigate these concerns and report back to the U.S. Congress.

Although the Justice Department has primary responsibility for the development and implementation of the system, the American Association of Motor Vehicle Administrators (AAMVA) works with the Justice Department under a cooperative agreement. Presently AAMVA has a seven-state pilot project.

The benefits of a system are quite evident. It would deter trafficking in stolen vehicles by eliminating a thief's ability to obtain "valid" titles by retitling the vehicle in other states. Simply put, the copy of the motor vehicle title presented for retitling would be electronically validated against the database of the state that originally titled the vehicle, according to the GAO. The NMVTIS would automatically cancel the title in the originating state once a new title has been reissued in another state.

The current system for retitling is done manually by states mailing vehicle-titling information. AAMVA officials reported that the NMVTIS would also prevent fraudulent use of duplicate motor vehicle titles.

As with the goal of current national motor vehicle titling legislation being considered by the Congress, the NMVTIS would protect subsequent purchasers. GAO highlighted three key protections:

• Make title washing more difficult. Title washing is a type of title fraud in which vehicle brand history is removed from the title by retitling the vehicle in another state that does not carry a particular brand. This is done to make it easier to pass the vehicle to a third party who is otherwise unaware of the brand.
• Provide access to brand data that would help purchasers to determine the market value and safety of the vehicle prior to purchase.
• Provide odometer readings, which would help purchasers determine if the vehicle mileage has been improperly rolled back to a lower number. There will be a fee to access the system, but law enforcement agencies and state departments of motor vehicles would be exempt.

In its investigation, the GAO determined the development of the system would cost approximately $34 million. The first pilot will be complete in early 2000. As of September 30 of this year, Congress had provided about $8 million for the system. The federal government is expected to allocate about $22 million for the project. States, AAMVA and contractors will provide the remaining monies.

Similar to any national titling debate, the system could fail if states do not participate fully. In its survey, GAO found that 27 of 47 states surveyed were concerned about how they would fund the system. GAO recommended that the attorney general 1) perform a life-cycle cost benefit analysis to determine if additional federal investment in NMVTIS is justified, and 2) provide additional federal funds for NMVTIS only if such funding is supported by the analysis.

Why should auto body repairers be concerned about stolen vehicles? The cycle of stolen vehicles inevitably will include repairers in the process. Providing more information to law enforcement and consumers will diminish the number of stolen vehicles and stolen automotive parts in the marketplace. Congress has the opportunity to implement a national uniform titling system this year. If the opportunity is missed, states must do a better job of coordinating a more uniform titling system. The NMVTIS is one piece of this process. If law enforcement is to succeed in lowering the number of stolen vehicles, it will have to have working partners such as the NMVTIS.

ASA has worked with AAMVA on a number of projects and supports the Justice Department's cooperative agreement with AAMVA. They are the most qualified and best positioned to develop and implement a national system such as NMVTIS.

Bob Redding is the Automotive Service Association's Washington, D.C., representative. He is a member of several federal and state advisory committees involved in the automotive industry. For more information about the legislative activities of ASA, visit www.TakingTheHill.com.

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