HOUSE BILL No. 6487

 

 

November 8, 2018, Introduced by Rep. VanderWall and referred to the Committee on Natural Resources.

 

     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 shall be established,

 

implemented, and operational by April 1, 2020.

 

     (7) The department may require a person to enter evidence of

 

security interests and any related information into the electronic


lien title system in lieu of paper documents beginning April 1,

 

2020.

 

     (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.