SB-0918, As Passed Senate, September 23, 2014
April 29, 2014, Introduced by Senators BRANDENBURG and MARLEAU and referred to the Committee on Transportation.
A bill to amend 1949 PA 300, entitled
"Michigan vehicle code,"
(MCL 257.1 to 257.923) by adding section 241.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 241. (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 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. The contract shall contain language that requires the
protection of proprietary information contained in the electronic
lien title system, and shall ensure that the contract provides for
the protection of a competitive free market.
(2) Except for persons who are not normally engaged in the
business or practice of financing vehicles, all secured parties are
required to participate in the electronic lien title system.
(3) For the purposes of this act, 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 a motor vehicle 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 in a motor vehicle. If the certificate of title is in the
possession of the motor vehicle owner, the secured party shall
deliver the release to the owner of the motor vehicle or as
otherwise directed by the owner. However, if the certificate of
title is held electronically as provided under section 238, the
secured party shall deliver the release of security interest to the
department, and the department 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 vehicle owner for all damages sustained by the owner due to the
failure to comply. The electronic lien title system shall provide a
mechanism by which a vehicle dealer may assign ownership of a motor
vehicle without proof that the prior security interest was
satisfied existing on the electronic lien title system. However,
the dealer warrants that the title is free and clear of all liens
Senate Bill No. 918 as amended September 17, 2014
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 electronically 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 the provisions of 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 no later than July 1, [2016].
Senate Bill No. 918 as amended September 17, 2014
(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 October 1,
[2016].
(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 does not take effect
unless both of the following bills of the 97th Legislature are
enacted into law:
(a) Senate Bill No.916
.
(b) Senate Bill No.917
.