(a) For any passenger motor vehicle, the ownership of which is transferred on or after October 1, 1996, the department shall disclose in writing on the certificate of title whenever records readily accessible to the state indicate that the passenger motor vehicle was previously issued a title that bore any word or symbol signifying that the vehicle was “salvage,” “unrebuildable,” “parts only,” “scrap,” “junk,” “nonrepairable,” “reconstructed,” “rebuilt,” or any other symbol or word of like kind, or that it has been damaged by flood.

(b)

(1) The department shall indicate on the face of the title or certificate for a passenger motor vehicle, as applicable, if the passenger motor vehicle is a salvage vehicle, a nonrepairable vehicle, a rebuilt vehicle, or a flood vehicle.

(2) Information concerning a passenger motor vehicle's status as a salvage, nonrepairable, rebuilt, or flood vehicle shall also be conveyed on any subsequent title, including a duplicate or replacement title, for the passenger motor vehicle issued by the original titling state or any other state.

(3) The title documents, the rebuilt anti-theft inspection certificate, the decal stating “Rebuilt Vehicle — Anti-theft Inspections Passed,” and the issuing system shall meet security standards minimizing the opportunities for fraud.

(4) The certificate of title shall include the passenger motor vehicle make, model, body type, year, odometer disclosure, and vehicle identification number.

(5) A passenger motor vehicle designated as nonrepairable shall be issued a nonrepairable vehicle certificate and shall not be retitled.

(6)

(A) A passenger motor vehicle owner submitting a vehicle for an anti-theft inspection shall be required to provide a completed document identifying the vehicle's damage prior to being repaired, a list of replacement parts used to repair the vehicle, and proof of ownership of the replacement parts, as may be evidenced by bills of sale, invoices or, if these documents are not available, other proof of ownership for the replacement parts. The owner shall submit in writing under penalty of perjury that the information in the declaration is complete and accurate, and, to the best of the owner's knowledge, no stolen parts were used during the construction or reconstruction of the motor vehicle.

(B) Any passenger motor vehicle or any major part or major replacement part required to be marked under 49 U.S.C. § 33102 of the Motor Vehicle Information and Cost Savings Act having a mark or vehicle identification number that has been illegally altered, defaced, or falsified, and that cannot be identified as having been legally obtained through bills of sale, invoices, or other ownership documentation, shall be contraband and subject to seizure.

(7) No duplicate or replacement title shall be issued unless the word “duplicate” is clearly marked on its face.

(8)

(A) If an insurance company is not involved in a damage settlement involving a salvage vehicle or a nonrepairable vehicle, the passenger motor vehicle owner must apply for a salvage title or nonrepairable vehicle certificate, whichever is applicable, before the passenger motor vehicle is repaired or the ownership of the passenger motor vehicle is transferred, but in any event within thirty (30) days after the passenger motor vehicle is damaged.

(B)

(i) If an insurance company, pursuant to a damage settlement, acquires ownership of a passenger motor vehicle that has incurred damage requiring the vehicle to be titled as a salvage vehicle, nonrepairable vehicle, or flood vehicle, the insurance company either must notify the department electronically or on documents prescribed by the department for purposes of evidencing the insurance company in the ownership chain of title or, alternatively, must apply for a salvage title or nonrepairable vehicle certificate within fifteen (15) days after the title is properly assigned by the owner to the insurance company, and delivered to the insurance company with all liens released.

(ii) Notwithstanding this or any other law to the contrary, if an insurance company acquires ownership of a passenger motor vehicle under the circumstances described in this subdivision (b)(8) and then sells the vehicle, then these transactions shall be exempt from sales and use tax liability to the same extent the transactions were exempt from such liability prior to October 1, 1996. If the vehicle does not meet or exceed the definition of a “salvage vehicle,” “nonrepairable vehicle” or “flood vehicle,” the insurance company is authorized to endorse change in ownership on the certificate of title as follows:

(a) With regard to a motor vehicle that is sold “as is” without repairs, change in ownership may be endorsed on the certificate of title without:

(1) Obtaining a new certificate of title; or

(2) Registering with the department for sales and use tax purposes; and

(b) With regard to a motor vehicle which is sold after repair, the insurance company must first obtain a certificate of title in its name, unless the transfer is to a licensed dealer or to the insured, in which cases the procedure set forth in subdivision (1) shall apply.

(C) If an insurance company does not assume ownership of its insured's passenger motor vehicle that has incurred damage requiring the vehicle to be titled as a salvage vehicle or nonrepairable vehicle, the insurance company shall:

(i) Notify the insured of the insured's obligation to apply for a salvage title or nonrepairable vehicle certificate for the passenger motor vehicle and notify the department that a salvage title or nonrepairable vehicle certificate should be issued for the vehicle; or

(ii) Withhold payment of the claim until the insured applies for a salvage title or nonrepairable vehicle certificate.

(D) If a leased passenger motor vehicle incurs damage requiring the vehicle to be titled as a salvage vehicle or nonrepairable vehicle, the lessor must apply for a salvage title or nonrepairable vehicle certificate within twenty-one (21) days after being notified by the lessee that the vehicle has been so damaged. The lessee of the vehicle shall inform the lessor that the leased vehicle has been so damaged within thirty (30) days after the occurrence of the damage.

(E) Any person acquiring ownership of a damaged passenger motor vehicle that meets the definition of a salvage or nonrepairable vehicle for which a salvage title or nonrepairable vehicle certificate has not been issued must apply for a salvage title or nonrepairable vehicle certificate, whichever is applicable. This application must be made before the vehicle is further transferred, but in any event, within thirty (30) days after ownership is acquired. This subdivision (b)(8)(E) shall not apply to a scrap metal processor that acquires a nonrepairable vehicle for the sole purpose of processing it into prepared grades of metallic scrap.

(F) No nonrepairable vehicle certificate shall be issued after two (2) transfers of ownership.

(G)

(i) When a passenger motor vehicle has been flattened, baled, or shredded, whichever comes first, the title or nonrepairable vehicle certificate for the vehicle shall be surrendered to the state within thirty (30) days.

(ii) If the second transferee on a nonrepairable vehicle certificate is unequipped to flatten, bale or shred the vehicle, this second transferee must, at the time of final disposal of the vehicle, use the services of a professional automotive recycler properly licensed by the state or a scrap metal processor who is hereby authorized to flatten, bale or shred the vehicle and to effect the surrender of the nonrepairable vehicle certificate to the state on behalf of the second transferee.

(iii) Records shall be updated to indicate the destruction of this vehicle and no further ownership transactions for the vehicle will be permitted.

(iv) If Tennessee is not the state of origin of the title or nonrepairable vehicle certificate, then the department shall notify the state of origin of the surrender of the title or nonrepairable vehicle certificate and of the destruction of this vehicle.

(H) When a salvage title is issued, the department's records shall so note. There shall be no retitling for registration purposes or issuance of a rebuilt title for a passenger motor vehicle with a salvage title without a certificate of inspection, indicating that the vehicle has passed the required state anti-theft inspections. This item does not preclude the issuance of a new salvage title for a salvage vehicle after a transfer of ownership.

(I) After a passenger motor vehicle titled with a salvaged title has passed the required anti-theft inspections, the inspection official will affix a secure decal stating “Rebuilt Vehicle — Anti-theft Inspections Passed” to the driver's door jamb of the vehicle and issue to the owner of the vehicle a certificate indicating that the passenger motor vehicle has passed the required anti-theft inspections. The decal must comply with the permanency requirements established by the department.

(J) The owner of a passenger motor vehicle titled with a salvage title may obtain a rebuilt title and vehicle registration by presenting to the department the salvage title, properly assigned, if applicable, together with the certificate that the vehicle has passed the anti-theft inspections. With this proper documentation and upon request, a rebuilt title and registration shall be issued to the owner. When a rebuilt title is issued, the department's records shall so note.

(9) A seller of a passenger motor vehicle that becomes a flood vehicle shall, at or prior to the time of transfer of ownership, give the buyer a written notice that the vehicle is a flood vehicle. At the time of the next title application for the vehicle, disclosure of the flood status shall be provided to the state with the properly assigned title and the word “Flood” shall be conspicuously labeled across the front of the new title.

(10) In the case of a leased passenger motor vehicle, the lessee, within fifteen (15) days of the occurrence of the event that caused the vehicle to become a flood vehicle, shall give the lessor written disclosure that the vehicle is a flood vehicle.

(c) The department is directed to develop electronic procedures in lieu of paper documents whenever these electronic procedures provide the same information, function, and security otherwise required by this section.

(d) A violation of this section is a Class A misdemeanor.