Rep. Schmitt (R-Blair) Reintroduces Wholesale Vehicle Auction Legislation

By Erik A. Ross, Senior Associate, Milliron & Goodman

On March 7, 2023, Rep. Schmitt-R reintroduced his legislation (House Bill 103) to modify the management of abandoned vehicles at auction and it was referred to the House Judiciary Committee. Last session, this legislation went through the House Transportation Committee so there will need to be a renewed effort to educate legislators and staff on this legislation.

Licensed wholesale vehicle auctions are a special class of private property owner. They handle thousands of dealershipowned vehicles every week that are bought and sold by licensed vehicle dealers to other vehicle dealers at the wholesale auction.

Vehicles are often abandoned by auto dealers; even vehicles valued at $20,000 or more. In some cases, it is because they simply go out of business. In other cases, they place a vehicle at auction for sale with no success. More often, they purchase them at auction and then do not transport them to their dealerships by the deadline. While current law has a process to address abandoned vehicles that are usually then salvaged, it doesn’t provide a way to address vehicles abandoned at wholesale auctions.

House Bill 103 (Schmitt-R) amends Title 75 (Vehicles), authorizing a wholesale vehicle auction, or salvor, to begin the process to remove vehicles that have been abandoned at the wholesale auction without the wholesale auction’s consent.

It would also authorize the wholesale auction to charge and collect storage fees, as well as the releasing or recovering costs of the abandoned vehicle.

Specifically, the proposed legislation requires the wholesale vehicle auction to file a report, outlined in existing law at § 7311.1 (a), with the local police department declaring that an unauthorized vehicle has been left unattended on private property for a period exceeding three business days. If the wholesale vehicle auction elects to file such a report, it may remove, sell, or legally obtain the ownership and title of a vehicle that is declared an abandoned vehicle by PennDOT. The following shall apply:

• A wholesale vehicle auction that intends to sell or legally obtain ownership of an abandoned vehicle shall indicate that intention on the report filed.

• If the abandoned vehicle is unclaimed, the wholesale vehicle auction may submit an application for a certificate of title to PennDOT.

• If PennDOT determines that a new certificate of title should be issued, an abandoned branded title shall be issued to the wholesale vehicle auction.

• After the abandoned vehicle branded title is issued, the vehicle shall be offered for sale at auction by the wholesale vehicle auction. Notice shall be provided to prospective buyers that the title has been branded as a formerly abandoned vehicle.

The wholesale vehicle auction shall be reimbursed for all applicable costs related to the storage and processing of the vehicle from the proceeds of the sale of the vehicle. The remaining proceeds of the sale shall be paid to PennDOT and transmitted to the

State Treasurer for deposit in the Motor License Fund.

In addition, if the wholesale vehicle auction does not intend to sell or legally obtain ownership of an abandoned vehicle, existing law at § 7311.1 (c) (Salvors) provides that an abandoned vehicle can be towed to a salvor’s property and the salvor may elect to file a report with the local police department.

Again, when the abandoned vehicle has been transferred to a salvor and the vehicle is subsequently sold at auction, the legislation provides that:

• The salvor shall recover the appropriate costs of towing and storage.

• The wholesale vehicle auction shall be reimbursed for the cost of storing, providing notice, obtaining title, and processing related to the vehicle when the additional funds are available because of the salvor’s auction.

• The remaining proceeds of the sale shall be paid to PennDOT and transmitted to the state Treasurer for deposit in the Motor License Fund.

In this way, economic waste is avoided, and it encourages the dealers not to abandon their vehicles at the wholesale vehicle auction. In addition, licensed auctions entities are entrusted with these vehicles to auction between licensed dealer buyers and dealer sellers. This sale can reduce the loss of funds that come from unpaid storage fees and can potentially combat the cash for clunkers type of waste from older vehicles in which are most abandoned vehicles.

We will keep you apprised of legislative activity on this important legislation.

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