SECURITY INTEREST IN TITLED PROP. H.B. 4450 (H-1)-4454: FLOOR ANALYSIS






House Bill 4450 (Substitute H-1 as reported with amendments)
House Bill 4451 (as reported with amendments)
House Bill 4452 (Substitute H-1 as reported with amendment)
House Bill 4453 (as reported with amendments)
House Bill 4454 (as reported without amendment)
Sponsor: Representative David Robertson (H.B. 4450) Representative Kevin Green (H.B. 4451) Representative Tupac Hunter (H.B. 4452) Representative Andy Dillon (H.B. 4453) Representative Joe Hune (H.B. 4454)
House Committee: Banking and Financial Services
Senate Committee: Banking and Financial Institutions

CONTENT
House Bills 4450 (H-1), 4451, and 4453 would amend various statutes to provide that the Secretary of State's receipt of an application for a certificate of title on which a security interest in a vehicle, watercraft, or off-road vehicle (ORV) was indicated, would be a condition of perfection of a security interest in the vehicle, watercraft, or ORV, and equivalent to the filing of a financing statement under the Uniform Commercial Code (UCC). When a security interest in a vehicle, watercraft, or ORV was perfected, it would have priority over the rights of a lien creditor.


House Bill 4450 (H-1) would amend Chapter II (Administration, Registration, Certificate of Title and Anti-Theft) of the Michigan Vehicle Code; House Bill 4451 would amend Part 803 (Watercraft Transfer and Certificate of Title) of the Natural Resources and Environmental Protection Act (NREPA); and House Bill 4453 would amend Part 811 (Off-Road Recreation Vehicles) of NREPA.


House Bill 4452 (H-1) would amend the Mobile Home Commission Act to provide that the Department of Labor and Economic Growth's receipt of an application for a certificate of title on which a security interest in a mobile home was indicated, would be a condition of perfection of a security interest in the mobile home and equivalent to the filing of a financing statement under the UCC. When a security interest in a mobile home was perfected, it would have priority over the rights of a lien creditor.


House Bill 4454 would amend Article 9 of the UCC to revise provisions under which filing a financing statement is not necessary or effective to perfect a security interest in property that is subject to a statute, regulation, or treaty described in the UCC. Under Article 9, as a rule, the filing of a financing statement is necessary to perfect a security interest. The filing of a financing statement, however, is not necessary or effective to perfect a security interest in property subject to one or more of the following:

-- A U.S. statute, regulation, or treaty whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to the property preempt the Article 9 requirement for filing a financing statement.
-- -- Chapter II of the Michigan Vehicle Code; Part 803 or 811 of NREPA; or certain sections of the Mobile Home Commission Act.
-- A certificate-of-title statute of another jurisdiction that provides for a security interest to be indicated on the certificate as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the property.


Compliance with a statute, regulation, or treaty described above is equivalent to the filing of a financing statement under Article 9. Also, except as otherwise provided in Article 9, duration and renewal of perfection of a security interest perfected by compliance with such a statute, regulation, or treaty are governed by the statute, regulation, or treaty. The bill specifies that compliance with the requirements of a statute, regulation, or treaty described above for obtaining priority over the rights of a lien creditor would be equivalent to the filing of a financing statement under Article 9, and that duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by such a statute, regulation, or treaty would be governed by the statute, regulation, or treaty.


MCL 257.217 (H.B. 4450) Legislative Analyst: Patrick Affholter 324.80320 (H.B. 4451) 125.2330d (H.B. 4452) 324.81108 (H.B. 4453) 440.9311 (H.B. 4454)

FISCAL IMPACT
The bills would have no fiscal impact on State or local government.


Date Completed: 5-5-05 Fiscal Analyst: Bill Bowerman Elizabeth Pratt

Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. hb4450-4454/0506