House File 777 - Introduced HOUSE FILE 777 BY COMMITTEE ON TRANSPORTATION (SUCCESSOR TO HSB 179) A BILL FOR An Act relating to applications for a motor vehicle salvage 1 certificate of title by an insurer without surrendering 2 the certificate of title or manufacturers or importers 3 statement of origin, making penalties applicable, and 4 including effective date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2542HV (2) 91 th/ns
H.F. 777 Section 1. Section 321.52, subsection 4, paragraph a, Code 1 2025, is amended to read as follows: 2 a. (1) Notwithstanding any other provision of law to the 3 contrary, an insurer may apply for and be issued a salvage 4 certificate of title for a motor vehicle without surrendering 5 the certificate of title or manufacturers or importers 6 statement of origin properly assigned if ownership of the 7 vehicle was transferred, or will transfer, to the insurer 8 pursuant to a settlement with the previous owner of the vehicle 9 arising from circumstances involving damage to the vehicle, 10 and at least thirty days have expired since the effective date 11 of such settlement. To obtain a salvage certificate of title 12 pursuant to this paragraph a , the insurer shall submit an 13 application for a salvage certificate of title to any county 14 treasurer. The application shall must be accompanied by an one 15 of the following: 16 (a) An affidavit from the insurer in which the insurer 17 certifies it has made at least two written attempts to obtain 18 a properly assigned certificate of title or manufacturers or 19 importers statement of origin for the vehicle by contacting 20 the previous owner of the vehicle and all lienholders of 21 record by certified mail or a similar service that provides 22 proof of service using a return receipt, and has been unable 23 to obtain the title or statement of origin. The failure of a 24 previous owner or lienholder to provide a properly assigned 25 certificate of title or manufacturers or importers statement 26 of origin shall be deemed to be a waiver by the previous owner 27 or lienholder of all rights, title, claim, and interest in the 28 vehicle. The 29 (b) If the owner transfers ownership of the vehicle to an 30 insurer pursuant to a settlement arising from circumstances 31 involving damage to or theft of the motor vehicle, one or more 32 supporting documents, including but not limited to a power of 33 attorney described in section 321.49, a duplicate certificate 34 of title application for the vehicle owner, or an odometer 35 -1- LSB 2542HV (2) 91 th/ns 1/ 4
H.F. 777 statement required under section 321.71 to the extent permitted 1 under 49 C.F.R. pt. 580, evidencing the transfer of ownership 2 to the insurer. Notwithstanding chapter 9B, section 633B.105, 3 or any other provision to the contrary, supporting documents 4 may be signed and affirmed under penalty of perjury in lieu of 5 a notarized signature and, in accordance with chapter 554D, the 6 signature may be electronic. The affirmation under penalty of 7 perjury is limited to the signature identifying the signer as 8 the owner or the signers representation of the authority of 9 the named agent to sign on the owners behalf. The insurer 10 shall indemnify and hold harmless the department for any 11 claims resulting from issuing a certificate of title, salvage 12 certificate of title, or junking certificate pursuant to this 13 subparagraph division. The department may adopt rules pursuant 14 to chapter 17A to implement and administer this subparagraph 15 division. 16 (2) An application shall made in accordance with 17 subparagraph (1) must also be accompanied by the application 18 fee required under paragraph b , and proof of payment of the 19 total amount of the settlement by the insurer to the previous 20 owner of the vehicle. Upon receiving an application that 21 complies with this paragraph a , the county treasurer shall 22 issue a salvage certificate of title to the insurer which shall 23 be free and clear of all liens and claims of ownership and 24 shall bear the word SALVAGE stamped or printed on the face of 25 the title in a manner prescribed by the department. 26 Sec. 2. EFFECTIVE DATE. This Act takes effect January 1, 27 2026. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanations substance by the members of the general assembly. 31 Under current law, when a motor vehicle is sold or 32 transferred, the vehicles certificate of title must be 33 physically exchanged between the seller or transferor and 34 the purchaser or transferee. Limited exceptions apply, 35 -2- LSB 2542HV (2) 91 th/ns 2/ 4
H.F. 777 including that an insurer is authorized to apply for and be 1 issued a salvage certificate of title for a motor vehicle 2 without surrendering the certificate of title or manufacturers 3 or importers statement of origin properly assigned if (1) 4 ownership of the vehicle was transferred, or will transfer, to 5 the insurer pursuant to a settlement with the previous owner of 6 the vehicle arising from circumstances involving damage to the 7 vehicle, (2) at least 30 days have expired since the effective 8 date of such settlement, and (3) the application is accompanied 9 by an affidavit from the insurer in which the insurer certifies 10 it has made at least two written attempts to obtain a properly 11 assigned certificate of title or statement of origin for the 12 vehicle by contacting the previous owner of the vehicle and all 13 lienholders of record by certified mail or a similar service, 14 and has been unable to obtain the title or statement of origin. 15 This bill authorizes an insurer to instead submit one or 16 more supporting documents described in the bill, evidencing the 17 transfer of ownership from the previous owner to the insurer 18 if the motor vehicle is transferred pursuant to a settlement 19 arising from circumstances involving damage or theft. Such 20 supporting documents must be signed and affirmed under penalty 21 of perjury if they are not notarized, and may be signed 22 electronically in accordance with Code chapter 554D (electronic 23 transactions). The insurer is required to indemnify and hold 24 harmless the department of transportation for any claims 25 resulting from issuing a salvage certificate of title pursuant 26 to the bill. 27 In accordance with current law, an application with 28 supporting documents must also be accompanied by a $20 29 application fee and proof of payment of the total amount of the 30 settlement by the insurer to the previous owner of the vehicle. 31 In addition, a surcharge of $5 is required pursuant to Code 32 section 321.52A. 33 A person who violates the title and registration 34 requirements of Code section 321.52, including as amended by 35 -3- LSB 2542HV (2) 91 th/ns 3/ 4
H.F. 777 the bill, commits a simple misdemeanor punishable by a $135 1 scheduled fine. By operation of law, any person who knowingly 2 swears or affirms falsely to any matter or thing required under 3 Code chapter 321 (motor vehicles and law of the road) to be 4 sworn to or affirmed, including as required by the bill, is 5 guilty of a class D felony. A class D felony is punishable 6 by confinement for no more than five years and a fine of at 7 least $1,025 but not more than $10,245. 8 The bill takes effect January 1, 2026. 9 -4- LSB 2542HV (2) 91 th/ns 4/ 4