(14) National Motor Vehicle Title Information System (NMVTIS). NMVTIS was created by the Federal “Anti Car Theft Act” of 1992 (Public Law 102-519) and the “Anti Car Theft Improvements Act” of 1996 (Public Law 104-152) to prevent auto theft and vehicle fraud by creating a national title information data sharing system. NMVTIS requires all 50 states to provide title and branding information. NMVTIS also requires various businesses engaged in the acquisition, dismantling and destruction of vehicles to report vehicle information.

A new subdivision (k) is added to section 81.2 to read as follows:

A new subdivision (g) is added to section 81.3 to read as follows:

Paragraph (3) of subdivision (a) of section 81.8 is amended to read as follows:

(3) Scrap processors. A scrap processor who acquires a junk and salvage vehicle shall follow the procedure set forth in this subdivision, except that a scrap processor shall not purchase any material which may have been a vehicle or a major component part of a vehicle, if recognizable as such, from any person other than a dealer registered pursuant to section 415 of the Vehicle and Traffic Law, an insurance company, a governmental agency, a manufacturer of motor vehicles, a person in whose name a certificate of title or other ownership document has been issued for such vehicle, a person alleging ownership and utilizing form MV-35, signed and properly completed, for a vehicle at least eight model years old and worth [$750] $1,250 or less, or a person registered or certified or issued an identification number pursuant to this Part. This restriction shall not apply to a major component part included in a mixed load, which is a load consisting of more than 50 percent non-vehicular scrap. A scrap processor must take possession of any certificate of title or form MV-35 used as proof of ownership of a vehicle the scrap processor is buying. All vehicles acquired must be entered on a multiple entry form for salvage vehicles (form MV-907M), to which the proof of ownership for the vehicle must be attached. All vehicles entered onto the form must be reported, under the unique National Motor Vehicle Title Information System (NMVTIS) ID that corresponds with the processing facility, to NMVTIS or any successor, in conformance with their reporting requirements, or within 60 days of acquiring the vehicle whichever is shorter. All forms 907-M and accompanying ownership documents must be retained by the facility for five years and in a manner that allows for retrieval of the documents on demand by an agent of the Commissioner of Motor Vehicles and/or any law enforcement agency during normal business hours. [The scrap processor must send certificates of title and completed forms MV-35 to the Department of Motor Vehicles within 15 days.]

Paragraph (8) of subdivision (a) of section 81.8 is amended to read as follows:

(8) A vehicle dismantler, within 15 days after acquiring a motor vehicle or trailer, must determine whether or not the vehicle will be sold to a scrap processor. If the vehicle is to be sold to a scrap processor, a salvage certificate (form MV-907A) is not required. Instead, the vehicle is entered in the Book of Registry and on a Multiple Entry Form for Salvage Vehicles (form MV-907M), to which the proof of ownership for the vehicle must be attached. All vehicles entered onto the form must be reported, under the unique National Motor Vehicle Title Information System (NMVTIS) ID that corresponds with the dismantling facility, to NMVTIS, or any successor, in conformance with their reporting requirements, or within 60 days of acquiring the vehicle whichever is shorter. All forms 907-M and accompanying ownership documents must be retained by the facility for five years and in a manner that allows for retrieval of the documents on demand by an agent of the Commissioner of Motor Vehicles and/or any law enforcement agency during normal business hours. [No later than the last day of each month, the form must be mailed to the address shown on the form.]

Subdivision (h) of section 81.14 is amended to read as follows:

(h) Retention period. Except for proofs of ownership required to be submitted to the Department of Motor Vehicles or required to be given to the transferee, all required records must be kept for a period of at least five years from the time the vehicle or major component part has left the possession of any person required to keep records pursuant to this section. However, and only pertaining to vehicles acquired prior to the effective date of paragraph (14) of subdivision (b) of section 81.1, no records shall be required to be kept for a vehicle or major component part which has left the possession of any person required to keep records if the vehicle or major component part is ten or more model years old.

1. Statutory authority: Section 215(a) of the Vehicle and Traffic Law (VTL) authorizes the Commissioner of Motor Vehicles to promulgate regulations which shall regulate and control the exercise of the powers of the Department of Motor Vehicles (DMV). Section 429(1)(b) of the VTL authorizes the Commissioner to promulgate regulations regarding the electronic filing of certain information related to junk or salvage vehicles.

2. Legislative objectives: Chapter 531 of the Laws of 2015 provides for the Commissioner to waive, by regulation, the delivery of documents related to junk and salvage vehicles or, in the alternative, to allow such requirements to be satisfied by the electronic filing of the necessary information by or on behalf of the person to whom such requirements apply. This proposed rule meets this legislative objective by establishing the requirements for electronic filing.

3. Needs and benefits: Section 429 of the VTL currently requires that vehicle dismantlers and scrap processors mail form MV-907M, related to the disposition of junk and salvage vehicles, to the Department of Motor Vehicles. Chapter 531 of the Laws of 2015 authorizes the Commissioner to obtain the information contained in such document from the National Motor Vehicle Title Information System (NMVTIS), to which dismantlers and scrap processors currently electronically transmit such information.

Form MV-907M (Disposition for Junk and Salvage Vehicles- Multiple Entry Form) is used by a registered vehicle dismantler or scrap processor to record the destruction of multiple vehicles. A vehicle listed on the MV-907M may never be titled again, nor may the vehicle and its component parts be transferred to any entity other than a scrap processor. A vehicle listed on a MV-907M is considered destroyed and may not be listed in the inventory of a dismantler after the date noted on the MV-907M.

NMVTIS was established in 1992 and is administered by the United States Department of Justice. NMVTIS is used to protect states and consumers from title fraud, ensure that junk or salvage vehicles are not later re-sold, and that the vehicle identification numbers from destroyed vehicles cannot be used for stolen vehicles. NMVTIS is an electronic system to which every state and business engaged in the disposition of junk, salvage related vehicles must report certain information. Per federal requirements, such businesses currently electronically report the information on the MV-907M to NMVTIS after such business obtains an identifying number from NMVTIS. Most businesses use a third party consolidator to perform this service. This proposal requires the dismantlers and scrap processors to obtain a unique NMVTIS number for each business facility that is regulated by DMV. This will allow DMV to map NMVTIS data to the specific regulated business.

This rule will eliminate the requirement for vehicle dismantlers and scrap processors to mail form MV-907M and related documentation for each vehicle thereon to the Department of Motor Vehicles and will provide for a more efficient process that benefits the consumer, vehicle dismantlers, scrap processors and the Department in detecting title fraud.

The current process requires vehicle dismantlers and scrap processors to enter vehicle information on form MV-907M, with the appropriate proof of ownership attached. Vehicle dismantlers and scrap processors must then mail form MV-907M and related vehicle documentation to the Department of Motor Vehicles Title Bureau by the last day of each month. Dismantlers and scrap processors must also submit vehicle information to NMVTIS electronically.

The proposed rule would require vehicle dismantlers and scrap processors to electronically submit to NMVTIS the information currently recorded on form MV-907M, in accordance with the reporting requirements of NMVTIS. DMV would then acquire this information from NMVTIS. In addition, for auditing purposes, vehicle dismantlers and scrap processors would be required to retain the completed original form MV-907M and all relevant ownership documents for a minimum of five years, in accordance with Section 81.14 (h). The MV-907M may not be eliminated in its entirety, however, because it is mandated by VTL section 429 and provides vital information to law enforcement.

The Department of Motor Vehicles will benefit from this rule because acquiring data electronically from NMVTIS will reduce the workload and resources now dedicated to processing MV-907M paperwork.

Vehicle dismantlers and scrap processors will benefit from the elimination of duplicate reporting—electronically to NMVTIS and mailing paper to DMV. Additionally, costs and employee resources currently associated with the mailing of the paper MV-907M data to the DMV will be eliminated.

4. Costs: This rule will have no fiscal impact upon the public, the DMV, or local governments. Scrap processors and vehicle dismantlers will continue to be required to pay a third party data consolidator in order to report this information, in accordance with NMVTIS requirements. This is not a new requirement. The regulation will require that the businesses maintain the paper records and have them available for DMV inspection.

5. Local government mandates: This rule does not impose any new mandates or responsibilities upon local governments.

6. Paperwork: This rule does not impose any new paperwork or reporting requirements. In fact, it eliminates one of the steps currently required. Scrap processors and vehicle dismantlers will no longer be required to mail Forms MV-907M to the DMV. Instead, the forms and related attachments will be retained on file at the respective facility for five years as required in part by Section 81.14(h).

7. Duplication: The proposal does not duplicate or conflict with any State or Federal rule.

8. Alternatives: The alternative is to continue to require the needless submission of paper form MV-907M.

This proposal was shared with the affected industry and the Department received responses from the Institute of Scrap Recycling Industries (ISRI) and Tabs Consulting Group. Tabs requested that the Department create its own electronic filing system so that dismantlers and scrap processors would not have to file with NMVTIS. The Department declines to implement this proposal, because it would consume significant ITS and Department resources to create a new system; it makes no sense to do so when such a system already exists in NMVTIS.

ISRI requested that the Department eliminate a proposal to require a VIN etching or photograph of VINs in scrapped vehicles, due to the difficult and burdensome nature of such task. The Department agrees that the burden of the requirement exceeds the benefits and has removed it from the proposed rulemaking. ISRI also requested that we increase the maximum worth of the scrap vehicles from $750 to $1,250 to provide consistency with another provision of Part 81. We have done so. However, we decline to change the text to provide that $1,250 applies to the “scrap metal value,” as opposed to the intrinsic value of the motor vehicle. A $40,000 luxury car may have a scrap value of $1,000. Finally, ISRI requests that dismantlers and scrap processors be able to store records electronically or in paper form. We decline to offer this option. Scanned documents are often difficult to read and authenticate, and may be incomplete. Original paper documents are generally complete and of greater use for DMV’s investigators.

9. Federal standards: The proposal does not exceed any minimum standards of the federal government for the same or similar subject areas.

10. Compliance schedule: The Department anticipates that all affected parties will be able to achieve the proposed immediate compliance date upon adoption of the rule.

1. Effect of rule: The Department estimates that there are approximately 225 certified scrap processors and 585 registered vehicle dismantlers in New York affected by this rule, which will remove a regulatory mandate. This proposed rule does not impact local governments.

2. Compliance requirements: Vehicle dismantlers and scrap processors will no longer be required to send DMV form MV-907M, but would be required to retain the original completed form MV-907M and all relevant ownership documents for a minimum of five years. Upon request of any agent of the commissioner or of any police officer (and during its regular business hours), a vehicle dismantler or scrap processor shall produce such records and permit said agent or police officer to examine them. The five year retention period conforms to the requirements of NYCRR Part 81.14(h) in that all required records must be kept for a period of at least five years.

Vehicle dismantler and scrap processor businesses are already required to obtain an identifying number from the National Motor Vehicle Title Information System (NMVTIS). This proposal requires the dismantlers and scrap processors to obtain a unique NMVTIS number for each business facility that is regulated by DMV. This will allow DMV to map NMVTIS data to the specific regulated business. Vehicle dismantlers and scrap processors are already required by federal law to electronically submit the data recorded on form MV-907M, regarding the acquisition and disposition of the junk and salvage vehicles, in accordance with the reporting requirements of NMVTIS.

3. Professional services: This regulation would not require the businesses to obtain new professional services beyond any that they may already use. Scrap processors and vehicle dismantlers are currently required by federal law to pay a third party data consolidator in order to report certain information to NMVTIS. This is not a new requirement.

4. Compliance costs: Scrap processors and vehicle dismantlers are currently required by federal law to pay a third party data consolidator in order to report certain information, to NMVTIS. This is not a new requirement. Vehicle dismantlers and scrap processors would be required to retain the original completed form MV-907M and all relevant ownership documents for a minimum of five years.

5. Economic and technological feasibility: The proposed rule will eliminate the requirement for vehicle dismantlers and scrap processors to submit form MV-907M to the Department of Motor Vehicles using traditional mail, in that data will be transmitted electronically.

6. Minimizing adverse impact: See #7 below.

7. Small business and local government participation: This proposal was shared with the affected industry and the Department received responses from the Institute of Scrap Recycling Industries (ISRI) and Tabs Consulting Group. Tabs requested that the Department create its own electronic filing system so that dismantlers and scrap processors would not have to file with NMVTIS. The Department declines to implement this proposal, because it would consume significant ITS and Department resources to create a new system; it makes no sense to do so when such a system already exists in NMVTIS, and is inefficiently duplicative of federal requirements.

ISRI requested that the Department eliminate a proposal to require a VIN etching or photograph of VINs in scrapped vehicles, due to the difficult and burdensome nature of such task. The Department agrees that the burden of the requirement exceeds the benefits and has removed it from the proposed rulemaking. ISRI also requested that we increase the maximum worth of the scrap vehicles from $750 to $1,250 to provide consistency with another provision of Part 81. We have done so. However, we decline to change the text to provide that $1,250 applies to the “scrap metal value,” as opposed to the intrinsic value of the motor vehicle. A $40,000 luxury car may have a scrap value of $1,000. Finally, ISRI requests that dismantlers and scrap processors be able to store records electronically or in paper form. We decline to offer this option. Scanned documents are often difficult to read and authenticate, and may be incomplete. Original paper documents are generally complete and of greater use for DMV’s investigators and law enforcement.

A rural area flexibility analysis and a job impact statement are not required for this rulemaking proposal because it will not adversely affect rural areas or job creation.

This proposal establishes procedures regarding the electronic filing of information maintained by dismantlers and scrap processors. Due to its focus, this rule will not impose an adverse economic impact on rural areas or on employment opportunities.