Official Summary Text
HB2256 - 572R - Senate Fact Sheet
Assigned to
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COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh
Legislature, Second Regular Session
FACT SHEET FOR
H.B. 2256
salvage vehicles;
abandoned; insurance claim
Purpose
Outlines
requirements for a salvage auction dealer to provide notice to a salvage
vehicle owner or lienholder when an insurance company does not obtain the vehicle's
certificate of title due to an insurance claim being denied, lack of policy
coverage or lack of cooperation from the salvage vehicle owner. Deems the
salvage vehicle an abandoned vehicle if the vehicle is not picked up and fees
are not paid within 30 days of the required notice and assigns the salvage
vehicle�s certificate of title to the salvage auction dealer in that
circumstance.
Background
If a vehicle
that is subject to the issuance of a certificate of title or registration
becomes a salvage, stolen or nonrepairable vehicle and is acquired by an
insurance company as a result of a total loss insurance settlement, the
insurance company must submit an application to the Arizona Department of
Transportation (ADOT) within 30 days after the certificate of title is assigned
by the owner to the insurance company. The application must be submitted with
all liens released, on a form authorized by ADOT for a salvage, stolen or
nonrepairable vehicle certificate of title. An insurance company or authorized
agent that is unable to obtain a properly endorsed certificate of title and a
lien satisfaction may apply for a salvage, stolen or nonrepairable certificate
of title if the company or agent has made at least two written attempts to
obtain the documents.
Statute defines
salvage
vehicle
as a vehicle, other than a nonrepairable vehicle, that: 1) is
subject to the issuance of a certificate of title and registration; and 2) has
been stolen, wrecked, destroyed, subjected to flood or water damage or
otherwise damaged to the extent that the owner, leasing company, financial
institution or insurance company considers it uneconomical to repair the
vehicle (
A.R.S.
� 28-2091
).
When requesting
the release of a vehicle from a towing company storage lot, an insurance
company must use a form prescribed by ADOT and present proof of vehicle
ownership. The towing company must release the vehicle after receiving the
release request and after payment for any reasonable towing, storage and
related fees is received (
A.R.S.
� 28-4847
).
There is no anticipated fiscal impact
to the state General Fund associated with this legislation.
Provisions
1.
Allows
an insurance company to request a salvage auction dealer to take prescribed
actions regarding a salvage vehicle located on the dealer's property that is
subject to an insurance claim, after:
a)
satisfying the insurance company's statutory requirements that apply
when requesting the release of a vehicle from a storage lot; and
b)
paying
all fees owed to the storage facility that held the salvage vehicle before the
dealer acquired the salvage vehicle.
2.
Requires an insurance company to provide notice to a salvage auction
dealer to release a salvage vehicle to the vehicle owner or any lienholder on
record with ADOT, if the insurance company subsequently does not obtain the
certificate of title to the vehicle due to denial of the insurance claim, lack
of coverage on the insurance policy or lack of cooperation from the vehicle's
owner.
3.
Allows the salvage vehicle release notice to be delivered to the salvage
auction dealer by a commercial delivery service, email or a proprietary
electronic system that is accessible by both the insurance company and the
dealer.
4.
Requires
the salvage auction dealer, on receipt of the salvage vehicle release notice,
to deliver to the vehicle owner's or lienholder's address a letter by certified
mail, or other commercially available delivery service that provides proof of
delivery, informing the owner or lienholder:
a)
that the salvage vehicle is available for pick up not later than 30 days
after notice delivery; and
b)
of
any outstanding charges owed to the dealer.
5.
Requires the salvage auction dealer, if the salvage vehicle is not
picked up and the invoice is not paid within 14 days after delivery of the
first notice to the property owner and lienholders, to send a second notice by
certified mail, or other commercially available delivery service that provides
proof of delivery, to the vehicle owner's or lienholder's address.
6.
Stipulates that, if the salvage vehicle is not picked up and the invoice
is not paid within 30 days after delivery of the first notice to the property
owner and lienholders, the salvage vehicle is considered an abandoned vehicle
and the vehicle's certificate of title is deemed to be assigned to the salvage
auction dealer in possession of the vehicle.
7.
Allows a salvage auction dealer to request, without surrendering the
certificate of title, a salvage certificate of title or nonrepairable vehicle
certificate of title for the salvage vehicle that is free and clear of all
liens or encumbrances.
8.
Requires
the request for the salvage vehicle certificate of title that is free and clear
of all liens or encumbrances to:
a)
be on a form prescribed by ADOT;
b)
include a copy of the first and second notices along with proof of
delivery or, if the notices were undeliverable, include evidence that the
notices were returned to the salvage auction dealer as undeliverable; and
c)
be
accompanied by a fee for a certificate of title that is free and clear of all
liens or encumbrances in an amount determined by ADOT.
9.
Requires ADOT, notwithstanding any lien against the salvage vehicle, to
issue a certificate of title that is free and clear of all liens and
encumbrances to the salvage auction dealer after satisfying the requirements
included in the request for the certificate of title.
10.
Defines
terms.
11.
Becomes
effective on the general effective date.
House Action
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Prepared by Senate Research
March 11, 2026
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Current Bill Text
Read the full stored bill text
HB2256 - 572R - H Ver
House Engrossed
salvage vehicles;
abandoned; insurance claim
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2256
AN
ACT
Amending title 28, chapter 7, article 3,
Arizona Revised Statutes, by adding section 28-2099; relating to salvage
vehicles.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Title 28, chapter 7, article 3,
Arizona Revised Statutes, is amended by adding section 28-2099, to read:
START_STATUTE
28-2099.
Salvage auction
dealers; salvage vehicles; unpaid insurance claim; notice; procedures;
definitions
A. an insurance company may request a
salvage auction dealer to take
actions prescribed in this
section regarding a salvage vehicle that
is located on
the salvage auction dealer's property and that is subject to an insurance claim
after satisfying all of the requirements of section 28-4847
and paying all fees that are owed to the storage facility that held
the salvage vehicle before the salvage auction dealer acquired the salvage
vehicle.
b. If an insurance company
subsequently does not obtain the certificate of title to the salvage vehicle
due to denial of the insurance claim, lack of coverage on the policy or lack of
cooperation from the salvage vehicle's owner, the insurance company shall
provide notice to the salvage auction dealer to release the salvage vehicle to
the owner or any lienholder on record with the department. The
notice may be delivered to the salvage auction dealer by a commercial delivery
service, email or a proprietary electronic system that is accessible by both
the insurance company and the salvage auction dealer.
c. On receipt of the notice required
by subsection B of this section, the salvage auction dealer shall deliver to
the address of the owner of the salvage vehicle or any lienholder on record
with the department a letter by certified mail, or other commercially available
delivery service that provides proof of delivery, informing the owner or
lienholder:
1. that the salvage vehicle is
available for pick up not later than thirty days after the notice is delivered.
2. of any outstanding charges owed to
the salvage auction dealer.
d. If the salvage vehicle is not
picked up and the invoice is not paid within fourteen days after delivery of
the first notice, the salvage auction dealer shall send a second notice by
certified mail, or other commercially available delivery service that provides
proof of delivery, to the address of the owner of the salvage vehicle or any
lienholder on record with the department.
E. If the salvage vehicle is not
picked up and the invoice is not paid within thirty days after delivery of the
first notice, the salvage vehicle is considered an abandoned vehicle as defined
in section 28-4801, and the salvage vehicle's certificate of title is
deemed to be assigned to the salvage auction dealer in possession of the
salvage vehicle. The salvage auction dealer may request, without
surrendering the certificate of title, a salvage certificate of title or
nonrepairable vehicle certificate of title for the salvage vehicle that is free
and clear of all liens or encumbrances. The request shall do all of
the following:
1. Be on a form prescribed by the
department.
2. Include a copy of the notice and
proof of delivery to the owner of the salvage vehicle or any lienholder on
record with the department as required by subsections C and D of this
section. The department shall accept evidence that the notices sent
to the address of the owner of the salvage vehicle or any LIENHOLDER on record
with the department were returned to the salvage auction dealer as
undeliverable to fulfill this requirement.
3. Be accompanied by a fee for a
certificate of title that is free and clear of all liens or encumbrances in an
amount to be determined by the department.
f. Notwithstanding any lien against
the salvage vehicle, the department shall issue a certificate of title that is
free and clear of all liens or encumbrances to the salvage auction dealer after
satisfying all of the requirements of subsection E of this section.
g. For the purposes of this section:
1. "Salvage auction dealer"
means a person that is licensed pursuant to chapter 10 of this title and whose
primary business is the sale of salvage vehicles on behalf of insurers.
2. "Salvage vehicle" has
the same meaning prescribed in section 28-2091.
END_STATUTE