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Friday, 23 May 2014 18:26

Florida Bans Counterfeit or Non-functional Airbags, Changes Total Loss Threshold to 90%

On April 28, 2014, the Florida House and Senate voted to pass Senate Bill 754 (SB 754) making it a second-degree felony “... for any person to knowingly import, manufacture, purchase, sell, offer for sale, or install, or reinstall on a vehicle a fake airbag or junk-filled airbag compartment.”

The bill defines a fake airbag to include both counterfeit and nonfunctioning airbags and specifically includes airbag covers.

SB 754 also revises the required statement that is stamped on a certificate of title upon issuance of the certificate; requires the Department of Highway Safety and Motor Vehicles to provide a report regarding certificates of title for rebuilt motor vehicles; revises requirements for the department to declare certain mobile homes and motor vehicles unrebuildable and to issue a certificate of destruction; requires an owner of, or an insurance company for, a motor vehicle that is worth less than a specified amount or is above a certain age to obtain a certificate of destruction under certain circumstances; provides a criminal penalty, etc.

The bill also requires the Florida Department of Highway Safety and Motor Vehicles (DHSMV) to visually inspect rebuilt vehicles and issue an affidavit-of-compliance if repairs are needed before issuing a certificate of title. The DHSMV would charge $40 for each rebuilt vehicle inspection.

In Florida, a rebuildable vehicle carries a salvage title, and an unrebuildable vehicle is issued a certificate of destruction (COD). Under existing law, if the cost of repairing a vehicle exceeded 80 percent of the vehicle’s value, the owner was required to obtain a COD. The bill raises the 80 percent repair-to-value COD threshold to 90 percent, and limits its application to late model vehicles, seven years old or new, with a value of at least $7,500 just prior to sustaining the damage resulting in total loss. Vehicles worth less than $1,500 retail are specifically excluded.

The new language added to section 319.30 of the Florida Statute reads: If a motor vehicle or mobile home is damaged, wrecked, or burned to the extent that the only residual value of the motor vehicle or mobile home is as a source of parts or scrap metal, or if the motor vehicle or mobile home comes into this state under a title or other ownership document that indicates that the motor vehicle or mobile home is not repairable, is junked, or is for parts or dismantling only, the owner or insurance company that pays money as compensation for total loss of a motor vehicle or mobile home shall obtain a certificate of destruction...

Given the increase in the threshold, more salvage motor vehicle titles are expected to be issued than under current law, allowing for more of those vehicles to be rebuilt and permitted back on the roads. Auto insurers would benefit from possible higher prices for salvage vehicles versus those receiving CODs. Conversely, the bill will result in fewer CODs being issued, reducing the number of vehicles available to dismantlers and recyclers.

The bill also directs the department, on or before December 31, 2015, to assess and provide a summary report to the Governor, Senate President, and Speaker of the House of their findings regarding certificates of title and affidavits-of-compliance process.

The legislation now goes to the Governor to sign or veto the bill. The Governor must sign or veto legislation within 15 days of transmittal, or it becomes law without signature. The bill would take effect July 1, 2014.

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