HB-6487, As Passed House, December 6, 2018
SUBSTITUTE FOR
HOUSE BILL NO. 6487
A bill to amend 1994 PA 451, entitled
"Natural resources and environmental protection act,"
by amending sections 81103, 81104, 81105, 81108, 81109, 81111,
81112, and 81113 (MCL 324.81103, 324.81104, 324.81105, 324.81108,
324.81109, 324.81111, 324.81112, and 324.81113), sections 81103,
81104, 81105, and 81111 as added by 1995 PA 58, section 81108 as
amended by 2012 PA 28, section 81109 as amended by 1996 PA 175,
section 81112 as amended by 2005 PA 271, and section 81113 as
amended by 1997 PA 102, and by adding section 81114f.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 81103. (1) This section is subject to section 81109(5).
(2) After April 1, 1991, every ORV sold by a dealer to a
retail purchaser shall be subject to the certificate of title
provisions of this part.
(3) (2)
After April 1, 1991, a person who
purchases or
otherwise
acquires an ORV shall make application apply for a
certificate of title as provided in this part.
(4) (3)
After April 1, 1991, the owner of
an ORV that has not
been
titled pursuant to subsection (1) (2) or (2) (3) or
the code
may apply for and, if otherwise eligible, receive a certificate of
title issued under this part. If the ORV was previously titled
under the code, it is not eligible for titling under this part.
Sec. 81104. The owner of an ORV that has been and is titled
under
this part may , if the ORV is otherwise eligible, apply for
and, if otherwise eligible, receive a title to the ORV under the
code.
If the owner applies for a title under the code, the any
certificate of title issued under this part shall at that time be
surrendered to the department of state.
Sec.
81105. (1) After Subject
to subsection (2), after an ORV
has
been titled under this part, both of the following shall
occur:apply:
(a) The owner, except as provided in section 81104, shall not
sell or otherwise assign ownership in the ORV without delivering to
the transferee a certificate of title showing assignment of the ORV
in the transferee's name.
(b) A person shall not purchase or otherwise acquire an ORV
without obtaining a certificate of title to it in the person's name
pursuant to either this part or the code.
(2) As provided under section 81109(5), the department of
state is not required to issue a certificate of title to the owner
of an ORV if the title is subject to a security interest.
Sec. 81108. (1) An application for an ORV certificate of title
shall be on a form prescribed by the department of state. The
application shall include a certification. The owner or purchaser
shall sign the application or, if the application is filed
electronically, provide information requested by the department of
state to verify the owner's identity. The application shall
contain, in addition to other information required by the
department of state, the following information:
(a) The applicant's name and address.
(b) A statement of any security interest or other liens on the
ORV, along with the name and address of any lienholder.
(c) If a lien is not outstanding, a statement of that fact.
(d) A description of the ORV, including the year, make, model
or series, and vehicle identification number.
(2) An application for an ORV certificate of title that
indicates the existence of a security interest in the ORV shall, if
requested by the security interest holder, be accompanied by a copy
of the security agreement, which may be unsigned. The department of
state shall indicate on the copy the date and place of filing and
shall return the copy to the person who filed the application. The
filer shall forward the copy to the security interest holder
identified in the application.
(3) Receipt by the secretary of state of a properly tendered
application for an ORV certificate of title that indicates the
existence of a security interest in the ORV is a condition of
perfection of a security interest in the ORV, unless, under section
81109(5), the department of state does not issue certificates of
title for ORVs subject to a security interest, and is equivalent to
filing a financing statement under the uniform commercial code,
1962
PA 174, MCL 440.1101 to 440.11102, 440.9994, with respect to
the ORV. When a security interest in an ORV is perfected, it has
priority over the rights of a lien creditor as lien creditor is
defined in section 9102 of the uniform commercial code, 1962 PA
174, MCL 440.9102.
Sec. 81109. (1) The purchaser or other transferee of an ORV
subject to the titling provisions of this part shall, except as
provided
in subsection (2), make application apply to the
department of state for issuance of a certificate of title to the
ORV. The application shall be filed within 15 days after the date
of purchase or transfer.
(2) A dealer selling ORVs at retail, within 15 days after
delivering
an ORV to a retail purchaser, shall make application
apply to the department of state for issuance of an ORV certificate
of title in the purchaser's name. The purchaser of the ORV shall
sign the application and other papers necessary to enable the
dealer to secure the title from the department of state. If the ORV
was not previously titled, the application shall be accompanied by
a manufacturer's certificate of origin.
(3) At the request of the applicant, the department of state
shall process an application for an ORV certificate of title on an
expedited basis.
(4) An application filed with the department of state pursuant
to this section shall be accompanied by the fee or fees prescribed
in section 81110.
(5) The department of state may require that all transactions
concerning ORV security interests be conducted by electronic means,
as determined by the department of state. In that case, if an ORV
is subject to a security interest, the department of state is not
required to issue a certificate of title to the owner of the ORV or
a lienholder if it maintains a record of title electronically.
After all security interests have been terminated, or for purposes
of retitling the ORV in another state or any other purpose
considered appropriate by the department of state, the department
of state may issue a paper copy of the ORV title to the ORV owner.
(6) An ORV sale transaction in which a security interest is
entered by electronic means shall include a document recording
entry of the electronic security interest and information regarding
the financial institution that holds the security interest. When a
secured party is presented with payment in satisfaction of the
security interest, a secured receipt in a form approved by the
department of state may be produced and submitted to the department
of state in lieu of the certificate of title for purposes of
transferring ownership in the ORV.
(7) (5)
Beginning January 1, 1992, a person
who violates this
section is responsible for a state civil infraction and may be
ordered to pay a civil fine of not more than $100.00.
Sec. 81111. (1) The department of state may refuse to issue an
original or duplicate ORV certificate of title under the
circumstances provided in section 81109(5) or if any of the
following occur:
(a) The applicant fails to furnish all required information or
reasonable additional information requested by the department of
state.
(b) The required fee has not been paid.
(c) The applicant is not entitled to an ORV certificate of
title under this part.
(d) The ORV is titled under the code.
(e) The application contains a false or fraudulent statement.
(f) The department of state has reasonable grounds to believe
that the ORV was stolen or embezzled.
(2)
If Subject to subsection
(1), if satisfied that the
applicant is the owner of the ORV and is otherwise entitled to an
ORV certificate of title, the department of state shall issue an
ORV certificate of title in the applicant's name. The certificate
shall be mailed or otherwise delivered to the owner of the ORV or
to another person specified by the owner in a separate instrument,
in a form prescribed by the department of state.
(3) If the secretary of state is not satisfied as to the
ownership of an ORV which is not a late model ORV and whose value
does not exceed $1,500.00, the secretary of state shall require the
applicant to certify that the applicant is the owner of the ORV and
therefore entitled to make application for a certificate of title
for the ORV.
Sec. 81112. (1) An ORV certificate of title shall be
manufactured in a manner to prevent as nearly as possible the
reproduction, alteration, counterfeiting, forging, or duplication
of the certificate without ready detection. An ORV certificate of
title shall contain on its face the information set forth in the
application, including a notation of all secured interests in the
ORV, the date on which the application was filed, and other
information required by the department of state.
(2) The department of state shall prescribe a uniform method
of numbering ORV certificates of title.
(3) An ORV certificate of title shall contain a form for
assignment and warranty of title by the owner with space for the
notation of a security interest in the ORV. The ORV certificate of
title may also contain other forms that the department of state
considers necessary to facilitate the effective administration of
this part. The certificate shall bear the coat of arms of this
state.
(4)
A person who intentionally reproduces, alters,
counterfeits,
forges, or duplicates shall
not do any of the
following:
(a) Reproduce, alter, counterfeit, forge, or duplicate an ORV
certificate
of title or who uses a hold
or use an ORV certificate
of title knowing it is reproduced, altered, counterfeited, forged,
or
duplicated. ORV certificate of title
(b) Fraudulently indicate on an ORV certificate of title that
there is no security interest on record for the ORV.
(c) Forge or counterfeit a letter, receipt, or other document
from the holder of a security interest in an ORV indicating that
the security interest has been released.
(5) A person who violates subsection (4) is subject to the
following penalties:
(a)
If the intent of reproduction, alteration, counterfeiting,
forging,
duplication, or use the
violation was to commit or aid in
the commission of an offense punishable by imprisonment for 1 or
more
years, the person committing the reproduction, alteration,
counterfeiting,
forging, duplication, or use violation
is guilty of
a misdemeanor punishable by imprisonment for a period equal to that
which could be imposed for the commission of the offense the person
had the intent to aid or commit or a fine of not more than
$5,000.00, or both.
(b)
If the intent of the reproduction, alteration,
counterfeiting,
forging, duplication, or use violation
was to
commit or aid in the commission of an offense punishable by
imprisonment for not more than 1 year, the person committing the
reproduction,
alteration, counterfeiting, forging, duplication, or
use
violation is guilty of a misdemeanor punishable by
imprisonment
for not more than 1 year or a fine of not more than $1,000.00, or
both.
(6) A person who is convicted of a violation of subsection
(4)(b) or (c), in addition to any other penalty, shall pay
restitution to the holder of a security interest in the ORV in the
amount of the outstanding lien on the ORV.
Sec. 81113. (1) If an ORV certificate of title or duplicate
certificate of title is lost or mutilated or becomes illegible, the
person entitled to possession of the certificate, or the legal
representative or successor in interest to the titleholder of
record,
may make application apply
to the department of state for a
duplicate ORV certificate of title. Upon receipt of the
application, the fee prescribed in section 81110, and information
satisfactory to the department of state to establish entitlement to
the duplicate, the department of state may issue a duplicate ORV
certificate of title to the applicant. As provided under section
81109(5), the department of state is not required to issue a
duplicate certificate of title to the owner of an ORV if the title
is subject to a security interest.
(2)
Every A duplicate ORV certificate of title shall contain
the legend: "This is a duplicate certificate of title and may be
subject to the rights of a person under the original certificate.".
(3) The secretary of state shall maintain 1 or more indexes
pertaining to ORV certificates of title. Upon receiving an
application for an ORV certificate of title, the secretary of state
may check the information in the application and accompanying
documents against the indexes of titled, registered, stolen, and
recovered ORVs and against other records maintained by the
secretary of state.
Sec. 81114f. (1) The secretary of state may enter into 1 or
more contracts under this section to establish, implement, and
operate an electronic lien title system to process the notification
and release of security interests in ORVs through electronic file
transfers, or as otherwise determined by the secretary of state, in
lieu of the issuance and maintenance of paper documents otherwise
required by law. Any such contract shall require the protection of
proprietary information in the electronic lien title system and
provide for the protection of a competitive free market.
(2) Except for persons who are not normally engaged in the
business or practice of financing ORVs, all secured parties are
required to participate in the electronic lien title system.
(3) For the purposes of this part, any requirement that a
security interest or other information appear on a certificate of
title is satisfied by the inclusion of that information in an
electronic file maintained in an electronic lien title system. The
satisfaction of a security interest may be electronically
transmitted to the secretary of state. A secured party shall
execute a release of its security interest in an ORV in a manner
prescribed by the department not more than 14 days after the
secured party receives the payment in satisfaction of the security
interest. If the certificate of title is in the possession of the
ORV owner, the secured party shall deliver the release to the ORV
owner or as otherwise directed by the owner. However, if the
certificate of title is held electronically as provided under
section 81109(5), the secured party shall deliver the release of
security interest to the department of state, and the department of
state shall cancel the security interest. If the secured party
fails to comply with these requirements for the release of a
secured interest, the secured party is liable to the ORV owner for
all damages sustained by the owner because of the failure to
comply. The electronic lien title system shall provide a mechanism
by which an ORV dealer may assign ownership of an ORV without proof
that the prior security interest was satisfied existing on the
electronic lien title system. However, in the event of such an
assignment, the dealer warrants that the title is free and clear of
all liens and assumes responsibility for the satisfaction of the
security interest.
(4) A certified copy of the secretary of state's electronic
record of a security interest is admissible in any civil, criminal,
or administrative proceeding in this state as evidence of the
existence of the security interest. If a certificate of title is
maintained in the electronic lien title system, a certified copy of
the secretary of state's electronic record of the certificate of
title is admissible in any civil, criminal, or administrative
proceeding in this state as evidence of the existence and contents
of the certificate of title.
(5) The secretary of state may determine any requirements
necessary to carry out this section, including, but not limited to,
1 or more of the following:
(a) Monitoring the reasonable fees charged by service
providers or a contractor for the establishment and maintenance of
the electronic lien title system.
(b) The qualifications of service providers for participation
in the electronic lien title system.
(c) The qualifications for a contractor to enter into a
contract with the secretary of state to establish, implement, and
operate the electronic lien title system.
(d) Program specifications that a contractor must adhere to in
establishing, implementing, and operating the electronic lien title
system.
(6) The electronic lien title system under this section shall
be established, implemented, and operational by February 16, 2021.
(7) By February 16, 2021, the department shall require a
person to enter evidence of security interests and any related
information into the electronic lien title system in lieu of paper
documents.
(8) As used in this section:
(a) "Contractor" means a person who enters into a contract
with the secretary of state to establish, implement, and operate
the electronic lien title system described in this section.
(b) "Electronic lien title system" means a system to process
the notification and release of security interests through
electronic file transfers that is established and implemented under
this section.
(c) "Service provider" means a person who provides secured
parties with software to manage electronic lien and title data as
provided under this section.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.