HB1890.DOC

SECTION 1. The legislature finds that airbag system fraud is a public safety concern for consumers and the motor vehicle insurance industry. The purpose of this Act is to:

(1) Establish criminal penalties for fraudulent installation or reinstallation of an airbag, with more severe penalties for persons whose airbag fraud results in serious injury or death;

(2) Require that any person engaged in the business of purchasing, selling, or installing an airbag maintain detailed records of airbags they purchase, sell, or install;

(3) Mandate that any person engaged in the business of installing an airbag submit an affidavit to a vehicle owner saying that an airbag was installed properly;

(4) Require a person repairing a vehicle to affix a permanent dashboard label disclosing whether a salvaged airbag had been used;

(5) Establish that police accident reports must note whether an airbag deployed; and

(6) Provide that a person trading or selling a motor vehicle must disclose whether an airbag is inoperable.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to title 26 to be appropriately designated and to read as follows:

"Chapter

MOTOR VEHICLE AIRBAG FRAUD

§ -1 Definitions. As used in this chapter:

"Airbag" means any component of an inflatable occupant restraint system that is designed in accordance with federal safety regulations for the make, model, and year of the vehicle to be installed and to operate in a motor vehicle to activate, as specified by the vehicle manufacturer, in the event of a crash. Airbag components include but are not limited to sensors, controllers, wiring, and the airbag itself.

"Light manipulating system" means anything that would mask or cause the inaccurate indication of the airbag system status, condition, or operability.

"Person" means any natural person, corporation, partnership, unincorporated association, or other entity.

"Salvaged airbag" means an original equipment manufacturer non-deployed airbag that has been removed from a motor vehicle for use in another vehicle.

§ -2 Installation or reinstallation of any fraudulent airbag; deceptive trade practices; criminal liability. (a) It is a deceptive trade practice for any person to:

(1) Install or reinstall, as part of a vehicle inflatable occupant restraint system, any object in lieu of an airbag, including any light manipulating system;

(2) Sell or offer for sale any device with the intent that the device will replace an airbag in any motor vehicle if the person knows or reasonably should know that the device does not meet federal safety requirements;

(3) Sell or offer for sale any device that when installed in any motor vehicle gives the impression that a viable airbag is installed in that vehicle, including any light manipulating system; or

(4) Intentionally misrepresent the presence of an airbag when one does not exist.

(b) Violation of this section is a class C felony.

(1) For a violation of subsection (a)(1) that results in serious bodily injury or death:

(A) An indeterminate term of imprisonment for not more than years;

(B) A fine of not more than $ ; or

(2) For all other violations of this section:

(A) An indeterminate term of imprisonment for not more than years;

(B) A fine of not more than $ ; or

§ -3 Purchase, sale, or installation of new or salvaged airbag; records. (a) Any person engaged in the business of purchasing, selling, or installing salvaged airbags shall maintain a manual or electronic record of the purchase, sale, or installation, which must include:

(1) The identification number of the airbag;

(2) The vehicle identification number of the vehicle from which the salvaged airbag was removed;

(3) The name, address, and driver's license number or other means of identification of the person from whom the salvaged airbag was purchased; and

(4) In the event that the salvaged airbag is installed, the vehicle identification number of the vehicle into which the airbag is installed.

No new or salvaged airbag shall be sold or installed which is or has been subject to a specific manufacturer's or appropriate authority's notice of recall.

(b) In the case of a new replacement airbag, any person engaged in installing any airbag shall maintain the name and tax identification number of the supplier of the airbag and record the vehicle identification number of the vehicle into which the airbag is installed, as well as the identification number of the airbag being installed. Additionally, the airbag identification of the previously deployed airbag being replaced shall be recorded. Upon request of any law enforcement officer of this State or other authorized representative of the department of commerce and consumer affairs, the installer shall produce the records required by this subsection and permit the department or police officer to examine them.

(c) Any person who installs a salvaged airbag in a vehicle shall apply a permanent, durable label that clearly states that the vehicle contains a salvaged airbag. The label shall be permanently installed on the dashboard of the vehicle. No person shall willfully remove such a label.

(d) Any person who sells a vehicle with a salvaged airbag or who installs a salvaged airbag shall disclose to the purchaser and vehicle owner that the airbag is salvaged.

(e) Any person who installs a new or salvaged airbag shall submit an affidavit to the vehicle owner or their representative stating that the replacement airbag has been properly installed.

(f) All records shall be maintained for not less than five years following the transaction and may be inspected during normal business hours by any law enforcement officer of this State or other authorized representative of the department of commerce and consumer affairs.

Upon request, information within a portion of the records required by this subsection pertaining to a specific transaction shall be provided to the vehicle insurer and the vehicle owner.

(g) Persons engaged in the business of selling salvaged airbags shall comply with rules adopted under chapter 91 by the department of commerce and consumer affairs.

(h) The department of commerce and consumer affairs shall adopt rules in accordance with chapter 91 for the purposes of this section. The rules regarding the sale of salvaged airbags shall include but not be limited to the following standards:

(1) Identification of the supplier of the airbag;

(2) Identification of the recipient vehicle, including vehicle identification number, year, make, and model;

(3) Identification of the airbag module cover color (and color code if available);

(4) Identification of the donor vehicle, including vehicle identification number, year, make, and model;

(5) Supplier's internal stock number or locator number;

(6) Indication of source of interchange information (i.e., interchange manual or part number, original equipment manufacturer information, etc.);

(7) A supplier certificate indicating that all the requirements of the inspection protocol have been successfully achieved and identifying the person who completed the inspection; and

(8) A document containing the vehicle description, including the year, make, and model for which the airbag system component is required when being sold to the end-user.

Salvaged airbags conforming to the foregoing standards shall be accompanied by a certificate of conformance that shall be retained by the installer.

§ -4 Prohibitions; penalties. (a) It is unlawful for any person to knowingly possess, sell, or install:

(1) A stolen airbag;

(2) An airbag from which the manufacturer's part number labeling or vehicle identification number has been removed, altered, or defaced; or

(3) An airbag taken from a stolen motor vehicle.

Violation of this subsection is a class C felony.

(b) Failure to maintain complete and accurate records, prepare complete and accurate documents, provide information from the record upon request, or properly disclose that an airbag is salvaged, as required by this chapter, is a misdemeanor.

(c) Violation of any other provision of this chapter for which a separate penalty is not otherwise provided, shall be a misdemeanor.

§ -5 Accidents; police report. Any traffic accident report required under chapter 291C shall clearly contain a notation as to whether the motor vehicle's airbag or inflatable restraint system had been deployed in the accident.

§ -6 Sale or trade of motor vehicle with an inoperable airbag. (a) Any person selling or trading a motor vehicle who has actual knowledge that the motor vehicle's airbag is inoperable shall notify the buyer or the person acquiring the trade, in writing, that the airbag is inoperable.

(b) Violation of this section shall be a deceptive trade practice and the violator shall be subject to the penalties under section -2."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1890
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII