House of Representatives

HB 2052

vehicles; title and registration

Sponsors: Representatives Cooley, Carruthers, et al

dpa	Committee on Transportation
dp	Committee on Appropriations
dpa	Caucus and COW	This bill as introduced contains an Appropriation clause.
x	As Transmitted to the Governor

House Bill 2052 requires the Arizona Department of Transportation Motor Vehicle Division (MVD) to issue vehicle certificates of title with a lien interest to the lienholder for retention until the lien is satisfied. In addition, HB 2052 authorizes MVD to establish a program allowing voluntary recording of title and lien information by eligible financial institutions through the use of electronic media instead of paper documentation.

History

Currently, there are at least 42 states that allow a bank or financial institution that has a lien on a vehicle to retain possession of a vehicle title. Under current statute, the lien information is recorded on the title and MVD computer records and the lienholder is issued a document form MVD indicating the lien has been recorded. Upon satisfaction of the lien, the vehicle owner is given a “lien release” from the lienholder and may then apply to MVD for a clear vehicle title.

Provisions

· Requires MVD to issue a vehicle title to the holder of the lien or encumbrance listed on the application for title.

· Provides that the vehicle title is issued directly to the vehicle owner if there is no lien or encumbrance.

· Requires the Department to research and develop methods to accomplish electronic title and lien transactions with financial institutions and manufacturers.

· Requires MVD to establish a system to allow electronic title and lien transactions in lieu of paper documents.

· Allows the Director to limit the number of financial institutions initially participating in the system, but requires the Department to encourage institutions of various sizes to participate.

· Allows the Director to expand the electronic title system after a twelve-month operation period upon determination that the system is successful.

· Requires a lienholder to deliver title to the owner or lienholder next in line upon final payment.

· Mandates that a lienholder who has assigned the obligation to another person to deliver the title to the assignee.

· Allows MVD to schedule hearings, impose and collect civil penalties from lienholders who fail to deliver title to the person legally entitled to possession upon the person’s request and within fifteen business days of lien satisfaction.

· Sets the penalty at fifty dollars if the title is not delivered within three business days following the fifteenth day and fifty dollars each day thereafter.

· Requires the Director to submit a written report on the Department’s experiences with the electronic title and registration system to the legislature and the Governor.

· Clarifies that a person may only make a name change in person or writing.

· Allows the Department to prescribe and authorize title and registration forms.

· Adds suspension, revocation and denial of registration as measures MVD may impose if the Department determines a vehicle is unsafe, not properly equipped, or unfit to be operated, and requires MVD to retrieve the license plates and registration.

· Reinserts language repealed in the bill pertaining to clearing a lien in cases where the lienholder cannot be found.

· Clarifies that excess registration fees for non-commercial vehicles cannot be credited under the plate to owner system.

· Caps the penalty fees at five hundred dollars for financial institutions failing to deliver a certificate of title in the specified time period after lien satisfaction.

· Contains a delayed effective date.

· Repeals the written report requirement as of 2006.

· Appropriates $277,950 from the state highway fund to ADOT to implement the provisions of this act.

House Bill 2052 passed the Committee on Transportation amended as follows:

· Reinserts language repealed in the bill pertaining to clearing a lien in cases where the lienholder cannot be found.

· Caps the penalty fees at five hundred dollars for financial institutions failing to deliver a certificate of title in the specified time period after lien satisfaction.

· Establishes a delayed effective date.

House Bill 2052 passed the Committee on Appropriations unamended.

The Committee of the Whole adopted the Committee on Transportation amendments.

The House concurred in the Senate Amendments to clarify that excess registration fees for non-commercial vehicles cannot be credited under the plate to owner system.

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45th Legislature

First Regular Session 3 February 26, 2001

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