Assigned to COMPS &                                                                                          AS PASSED BY COMMITTEE






Fifty-Third Legislature, Second Regular Session





scrap vehicles; sales




Allows registered scrap metal dealers and licensed automotive recyclers to purchase a vehicle that is at least 12 model years old without obtaining a certificate of title. Outlines reporting and verification requirements for transactions of vehicles without a title.




Current law defines automotive recycler as a person engaged in buying or acquiring motor vehicles solely for dismantling, selling, or otherwise disposing of the parts or accessories and who dismantles six or more vehicles in a calendar year (A.R.S. § 28-4301).  Scrap metal dealer is defined as a person or business entity that is licensed, engaged in purchasing, trading or receiving secondhand material of any kind, commonly known as scrap metal and whose primary business is the dismantling, selling, or disposing of parts or accessories of motor vehicles (A.R.S. § 44-1641).


Scrap metal dealers must register with the Arizona Department of Public Safety (DPS) and maintain proof of registration (A.R.S. § 44-1641.05). Registered dealers must record each transaction, including documentation of: 1) a transaction receipt; 2) a photograph and description of the metal purchased; 3) date, time and place of the transaction; 4) dollar amount of the transaction; 4) seller's description, fingerprint and photograph; 5) seller's transaction privilege tax number; and 6) the number and state of issuance of the license on the vehicle used to deliver the scrap metal (A.R.S. § 44-1642). Law enforcement must provide detailed descriptions of stolen items on a free theft notification website. Dealers must register with the website and alert law enforcement when offered suspicious materials (A.R.S. § 44-1641.02).


The Arizona Department of Transportation (ADOT) provides for indication of a lien or encumbrance upon application for a certificate of title of a vehicle (A.R.S. § 28-2132).  ADOT must maintain an appropriate index of all liens, encumbrances, and title retention instruments (A.R.S. § 28-4133). 


            The National Motor Vehicle Title Information System (NMVTIS) is an electronic filing system designed to prevent the introduction or reintroduction of stolen motor vehicles into interstate commerce and protect states, individuals and consumers from fraud. Auto recyclers, junk yards and salvage yards are required to provide NMVTIS with the following information on each vehicle received every month: 1) name, address and contact information for the reporting entity; 2) the vehicle identification number (VIN); 3) date the automobile was obtained; 4) name of the individual or entity from whom the automobile was obtained; 5) whether the automobile was crushed, disposed of, or offered for sale; and 6) whether the vehicle is intended for export out of the United States (NMVTIS).


There is no anticipated fiscal impact to the state General Fund associated with this legislation.




1.      Allows a registered scrap metal dealer or licensed automotive recycler to purchase and scrap a vehicle, at least 12 model years old, without obtaining the certificate of title if the title was: 

a)      not obtained in the owner's or authorized agent's name;

b)      lost by the owner; or

c)      returned by the owner to ADOT. 


2.      Requires scrap metal dealers and automotive recyclers that purchase a vehicle without the certificate of title to submit a statement to ADOT that is signed by the seller and contains:

a)      a statement that the vehicle will not be titled again and will be scrapped;

b)      a description of the vehicle;

c)      the owner's name, address and driver license number, nonoperating identification or photo identification.  

d)      certification the owner does not possess the title due to one of the approved reasons;

e)      certification the vehicle is at least ten model years old and not subject to a security interest or lien;

f)       acknowledgement that knowingly falsifying information on the statement will result in a class one misdemeanor;

g)      the owner's signature and date of transaction;

h)      the name and address of the business acquiring the vehicle;

i)       NMVTIS identification number; and

j)       the business agent's signature and date, including printed name and title if the agent is signing on behalf of a corporation. 


3.      Designates, as a class one misdemeanor, knowingly providing or certifying false information on the signed statement or knowingly selling a vehicle with an unsatisfied lien.  


4.      Requires scrap metal dealers and automotive recyclers purchasing a vehicle without a title to maintain a photocopy or electronic scan of the owner's driver license, nonoperating identification license or photo identification card issued by a tribal government or the United States military.


5.      Allows scrap metal dealers or automotive recyclers to maintain a copy of a seller's photo identification as reference for future transactions. 


6.      Requires scrap metal dealers and automotive recyclers to retain required statements and records for at least two years.


7.      Allows ADOT to develop an electronic system to be used as verification that a vehicle offered for sale has not been reported stolen.


8.      Requires scrap metal dealers or automotive recyclers to use ADOT's electronic system to verify that a vehicle offered for sale without a title has not been reported stolen.  


9.      Requires scrap metal dealers and automotive recyclers to retain a form for at least 5 years that contains verification of a completed search on the electronic system, the VIN and date of search.


10.  Requires ADOT to retain records of electronic system searches for at least 10 years.


11.  Prohibits a scrap metal dealer or automotive recycler from purchasing a vehicle if ADOT's electronic system indicates that the vehicle was reported stolen, but does not require the dealer or recycler to apprehend the seller.


12.  Requires scrap metal dealers and automotive recyclers to use an ADOT vehicle lien or encumbrance database, in place February 1, 2018, or a comparable database to check for liens or encumbrances on vehicles purchased.


13.  Requires scrap metal dealers and automotive recyclers that purchase or receive vehicles for scrap or parts to report to NMVTIS and submit an electronic list of vehicles obtained to ADOT within 48 hours after the close of business each day that contains:

a)      the name, address and contact information of the reporting entity;

b)      the VIN;

c)      the date the vehicle was obtained;

d)      the name of the seller;

e)      intended use of the vehicle;

f)       intent to export the vehicle; and

g)      NMVTIS identification number of the business acquiring the vehicle.


14.  Requires scrap metal dealers and automotive recyclers to hold a vehicle for at least three business days after the date it was reported to ADOT before crushing, dismantling or shredding.


15.  Prohibits ADOT from disclosing information obtained from scrap metal dealers or automotive recyclers, other than to law enforcement agencies and for the purposes of canceling certificates of title.


16.  Subjects, to civil penalties of up to $1,000, any individual that is engaged in scrap metal dealer or automotive recycler activity and knowingly and willingly fails to deliver a vehicle title or required statements and records to the ADOT or NMVTIS within 48 hours of a transaction. 


17.  Allows a local or state law enforcement agency, county attorney or attorney general to bring an action in any court of competent jurisdiction to enforce subjected civil penalties.

18.  Requires 50 percent of civil penalties assessed be deposited in the certificate of title fund and the remaining 50 percent be deposited to the appropriate city, town, county or state to be used to enforce requirements.


19.  Establishes the certificate of title fund to be administered by ADOT and continuously appropriated.  


20.  Requires ADOT to adopt NMVTIS provisions and allows a peace officer to enforce NMVTIS provisions.

21.  Requires the seller of material obtained from scrap vehicles to certify to the purchaser proper reporting of the vehicle to ADOT or NMVTIS.


22.  Supersedes any other law governing the purchase by a scrap metal dealer of a vehicle solely for the purpose processing the vehicle into a scrap vehicle or scrap metal.


23.  Defines scrap vehicle as a vehicle that has been reported to NMVTIS and that has been flattened, crushed, baled or logged so that the vehicle is less than 50 percent of its original volume, is no longer the vehicle that is described by the certification of title and is sold only for purposes of scrap metal.


24.  Excludes scrap vehicles from the definition of vehicle.


25.  Includes scrap vehicles in the definition of ferrous metals and scrap metals.  


26.  Contains a conditional enactment clause contingent on ADOT's implementation of an electronic verification system by October 1, 2019.


27.  Makes technical and conforming changes.


28.  Becomes effective on the general effective date. 


Amendments Adopted by Committee


1.      Increases the model year requirement, from 10 to 12, for vehicles eligible to be sold without a title.


2.      Requires scrap metal dealers and automotive recyclers to hold a vehicle for at least three business days after the date it was reported to ADOT.  


3.      Requires scrap metal dealers, automotive recyclers and ADOT to maintain records of searches completed on the electronic verification system.  


4.      Adds reporting requirements to NMVTIS.


5.      Contains a conditional enactment clause contingent on ADOT's implementation of an electronic verification system.


House Action                                                              Senate Action


TI                    2/7/18     DP          8-0-0-0                  COMPS          3/19/18     DPA     7-0-1

3rd Read          2/22/18                  56-0-4


Prepared by Senate Research

March 21, 2018