A BILL TO BE ENTITLED
AN ACT to create a motor VEHICLE chop shop law regarding the receiving, possession, and distribution of stolen or altered motor VEHICLES and motor VEHICLE parts.
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 20 of the General Statutes is amended by adding a new Article to read:
"Article 18.
"Motor Vehicle Chop Shop Act.
"§ 20‑400. Definitions.
Unless the context requires otherwise, the following definitions apply throughout this Article to the defined words and phrases and their cognates:
(1)	Chop shop. – Any building, lot, or other premises where one or more persons are or have been knowingly engaged in altering, destroying, disassembling, dismantling, reassembling, or knowingly storing any motor vehicle or motor vehicle part known to be illegally obtained by theft, fraud, or conspiracy to defraud, in order to do either of the following: 
a.	Alter, counterfeit, deface, destroy, disguise, falsify, forge, obliterate, or remove the identity, including the vehicle identification number of the motor vehicle or motor vehicle part, in order to misrepresent the identity of the motor vehicle or motor vehicle part or to prevent the identification of the motor vehicle or motor vehicle part. 
b.	Sell or dispose of the motor vehicle or motor vehicle part. 
(2)	Instrumentality. –  Motor vehicle, motor vehicle part, other conveyance, tool, implement, or other instrumentality.
(3)	Vehicle identification number. – A number, a letter, a character, a datum, a derivative, or a combination thereof, used by the manufacturer or the Division for the purpose of uniquely identifying a motor vehicle or motor vehicle part. 
"§ 20‑401. Chop shop operation unlawful; restitution.
(a)	Criminal Penalties. –  It shall be punishable as a Class H felony:
(1)	For any person to own, operate, or conduct a chop shop.
(2)	For any person to transport a motor vehicle or motor vehicle part to or from a location knowing it to be a chop shop.
(3)	For any person to sell, transfer, purchase, or receive a motor vehicle or motor vehicle part either to or from a location knowing it to be a chop shop. 
(4)	For any person to buy, dispose of, sell, transfer, or possess a motor vehicle or motor vehicle part with the knowledge that the vehicle identification number of the motor vehicle or motor vehicle part has been altered, counterfeited, defaced, destroyed, disguised, falsified, forged, obliterated, or removed. The provisions of this subdivision shall not apply to a motor vehicle scrap processor who, in the normal course of business and in good faith, processes a motor vehicle or motor vehicle part by crushing, compacting, or other similar methods, provided that any vehicle identification number is not removed from the motor vehicle or motor vehicle part before or during the processing. 
(b)	Restitution. – In addition to any other punishment provided for by law, any person who violates this section shall be ordered to make restitution to the lawful owner of any stolen motor vehicle or the stolen motor vehicle part, or to the owner's insurer to the extent that the owner has been compensated by the insurer, and to any other person for any financial loss sustained as a result of a violation of this section.
Financial loss includes, but is not limited to, loss of earnings, out‑of‑pocket and other expenses, repair and replacement costs, and claims payments. Lawful owner includes an innocent bona fide purchaser for value of a stolen motor vehicle or stolen motor vehicle part who does not know that the motor vehicle or motor vehicle part is stolen or an insurer to the extent that the insurer has compensated a bona fide purchaser for value who has subrogated the claim.
The court shall determine the amount and method of restitution. In an extraordinary case, the court may determine that the best interests of the victim and justice would not be served by ordering restitution. In that case, the court shall make and enter specific written findings on the record concerning the extraordinary circumstances presented which militated against restitution."
SECTION 2.  G.S. 14‑86.1(a) reads as rewritten:
"(a)	All conveyances, including vehicles, watercraft or aircraft, used to unlawfully conceal, convey or transport property in violation of G.S. 14‑71, 14‑71.1, or 20‑106, or used by any person in the commission of armed or common‑law robbery, or used in violation of G.S. 20‑401, or used by any person in the commission of any larceny when the value of the property taken is more than two thousand dollars ($2,000) shall be subject to forfeiture as provided herein, except that:
(1)	No conveyance used by any person as a common carrier in the transaction of the business of the common carrier shall be forfeited under the provisions of this section unless it shall appear that the owner or other person in custody or control of such conveyance was a consenting party or privy to a violation that may subject the conveyance to forfeiture under this section;
(2)	No conveyance shall be forfeited under the provisions of this section by reason of any act or omission committed or omitted while such conveyance was unlawfully in the possession of a person other than the owner in violation of the criminal laws of the United States, or any state;
(3)	No conveyance shall be forfeited pursuant to this section unless the violation involved is a felony;
(4)	A forfeiture of a conveyance encumbered by a bona fide security interest is subject to the interest of the secured party who neither had knowledge of nor consented to the act or omission;
(5)	No conveyance shall be forfeited under the provisions of this section unless the owner knew or had reason to believe the vehicle was being used in the commission of any violation that may subject the conveyance to forfeiture under this section;
(6)	The trial judge in the criminal proceeding which may subject the conveyance to forfeiture may order the seized conveyance returned to the owner if he finds forfeiture inappropriate. If the conveyance is not returned to the owner the procedures provided in subsection (e) shall apply.
As used in this section concerning a violation of G.S. 20‑401, the term "conveyance" includes any "instrumentality" as defined in G.S. 20‑400(2)."
SECTION 3.  G.S. 19‑1 reads as rewritten:
"§ 19‑1.  What are nuisances under this Chapter.
(a)	The erection, establishment, continuance, maintenance, use, ownership or leasing of any building or place for the purpose of assignation, prostitution, gambling, illegal possession or sale of alcoholic beverages, illegal possession or sale of controlled substances as defined in the North Carolina Controlled Substances Act, or illegal possession or sale of obscene or lewd matter, as defined in this Chapter, shall constitute a nuisance.
(b)	The erection, establishment, continuance, maintenance, use, ownership or leasing of any building or place wherein or whereon are carried on, conducted, or permitted repeated acts which create and constitute a breach of the peace shall constitute a nuisance.
(b1)	The erection, establishment, continuance, maintenance, use, ownership or leasing of any building or place wherein or whereon are carried on, conducted, or permitted repeated activities or conditions which violate a local ordinance regulating sexually oriented businesses so as to contribute to adverse secondary impacts shall constitute a nuisance.
(b2)	The erection, establishment, continuance, maintenance, use, ownership, or leasing of any building or place wherein or whereon are carried on, conducted, or permitted chop shop activities in violation of G.S. 20‑401.
(c)	The building, place, vehicle, or the ground itself, in or upon which a nuisance as defined in subsection (a), (b), or (b1) of this section is carried on, and the furniture, fixtures, and contents, are also declared a nuisance, and shall be enjoined and abated as hereinafter provided."
SECTION 4.  G.S. 19‑6.1 reads as rewritten:
"§ 19‑6.1.  Forfeiture of real property.
In all actions where a preliminary injunction, permanent injunction, or an order of abatement is issued pursuant to this Article in which the nuisance consists of or includes at least two prior occurrences within five years of the manufacture, possession with intent to sell, or sale of controlled substances as defined by the North Carolina Controlled Substances Act, two prior occurrences of the possession of any controlled substance included within Schedule I or II of that Act, or two prior occurrences within five years of violation of G.S. 20‑401, the real property on which the nuisance exists or is maintained is subject to forfeiture in accordance with this section.
If all of the owners of the property are defendants in the action, the plaintiff, other than a plaintiff who is a private citizen, may request forfeiture of the real property as part of the relief sought. If forfeiture is requested, and if jurisdiction over all defendant owners is established, upon judgment against the defendant or defendants, the court shall order forfeiture as follows:
(1)	If the court finds by clear and convincing evidence that all the owners either (i) have participated in maintaining the nuisance on the property, or (ii) prior to the action had written notice from the plaintiff, or any governmental agent or entity authorized to bring an action pursuant to this Chapter, that the nuisance existed or was maintained on the property and have not made good faith efforts to stop the nuisance from occurring or recurring, the court shall order that the property be forfeited;
(2)	If the court finds that one or more of the owners did not participate in maintaining the nuisance on the property or did not have written notice from the plaintiff prior to the action that the nuisance existed or was maintained on the property, the court shall not order forfeiture of the property immediately upon judgment. However, if after judgment and an order directing the defendants to abate the nuisance, the nuisance either continues, begins again, or otherwise recurs within five years of the order and the defendants have not made good faith efforts to abate the nuisance, the plaintiff may petition the court for forfeiture. Upon such petition, the defendant owner or owners shall be given notice and an opportunity to appear and be heard at a hearing to determine the continuation or recurrence of the nuisance. If, in this hearing (i) the plaintiff establishes by clear and convincing evidence that the nuisance, with the owner's or owners' knowledge, has either continued, begun again, or otherwise recurred, and (ii) the defendants fail to establish that they have made and are continuing to make good faith efforts to abate the nuisance, the court shall order that the property be forfeited.
For the purposes of this section, factors which may evidence good faith by the defendant to abate the nuisance include but are not limited to (i) cooperation with law enforcement authorities to abate the nuisance; (ii) lease restrictions prohibiting the illegal possession or sale of narcotic drugs and an action to evict a tenant for any violations of the lease provision; (iii) a criminal record check of prospective tenants; and (iv) reference checks of prior residency of prospective tenants.
Upon an order of forfeiture, title to the property shall vest in the school board of the county in which the property is located. If at the time of forfeiture the property is subject to a lien or security interest of a person not participating in the maintenance of the nuisance, the school board shall either (i) pay an amount to that person satisfying the lien or security interest; or (ii) sell the property and satisfy the lien or security interest from the proceeds of the sale. If the property is not subject to any lien or security interest at the time of forfeiture, the school board may hold, maintain, lease, sell, or otherwise dispose of the property as it sees fit.
Upon the filing of the action, the plaintiff may file a notice of lis pendens in the official records of the county where the property is located. If the plaintiff files a notice of lis pendens, any person purchasing or obtaining an interest in the property thereafter shall be considered to have notice of the alleged nuisance, and shall forfeit his interest in the property upon a judgment of forfeiture in favor of the plaintiff.
If in the same action in which real property is forfeited the court finds that a tenant or occupant of the property participated in or maintained the nuisance, the lease or other title under which the tenant or occupant holds is void, and the right of possession vests in the new owner. Upon forfeiture, the rights of innocent tenants occupying separate units of the property who were not involved in the nuisance at the time the action was filed shall be in accordance with any relevant lease provisions in effect at the time or, in the absence of relevant lease provisions, in accordance with the law applying to other tenants or occupants of property that is sold, foreclosed upon, or otherwise obtained by new owners."
SECTION 5.  If any provision of this act or its application is held invalid, the invalidity does not affect other provisions or applications of this act that can be given effect without the invalid provisions or application, and to this end the provisions of this act are severable.
SECTION 6.  This act becomes effective December 1, 2007, and applies to offenses committed on or after that date.