SF 1791

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 03/28/2012 09:03am

A bill for an act
relating to public safety; vehicle titles; clarifying requirements pertaining to
bonds and issuance of title; amending Minnesota Statutes 2010, sections 168.27,
subdivision 28; 168A.07, subdivision 1, by adding subdivisions; 168A.20,
subdivision 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 168.27, subdivision 28, is amended to read:

Subd. 28.

Distribution of plates and stickers.

The commissioner may distribute
registration plates and stickers to be held and issued by new and used motor vehicle dealers.
A dealer may issue registration plates and stickers only in conjunction with deleted text begin and at the time
of deleted text end the sale of a vehicle by the dealer. A dealer permitted to hold and issue registration
plates and stickers must be equipped with electronic transmission technology and trained
in its use. Before receiving registration plates and stickers under this subdivision, a dealer
must adopt and implement security and record-keeping requirements satisfactory to the
commissioner. The commissioner may revoke the authority granted under this subdivision
for any violation of law or rule governing the issuance of registration plates and stickers,
any violation of the dealer's security and record-keeping plan, or any other action that
in the commissioner's opinion adversely affects the registration system. The dealer is
financially responsible for the cost and tax value of any unaccounted inventory.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 168A.07, subdivision 1, is amended to read:

Subdivision 1.

Ownership at issue; certificate withheld or bond filed.

In the event
application is made in this state for a certificate of title on a vehicle and the department is
not satisfied as to the ownership of the vehicle or the existence of security interests therein,
the vehicle may be registered but the department new text begin , subject to subdivision 1a, new text end shall either:

(1) withhold issuance of a certificate of title until the applicant shall present
documents reasonably sufficient to satisfy the department of the applicant's ownership of
the vehicle and as to any security interest therein; or

(2) as a condition to issuing a certificate of title, require the applicant to file a
bond in the form deleted text begin prescribed by the department and executed by the applicant, and either
accompanied by the deposit of cash or executed by a surety company authorized to
do business in this state, in an amount equal to 1-1/2 times the value of the vehicle as
determined by the department. The bond shall be conditioned to indemnify any prior
owner and secured party and any subsequent purchaser of the vehicle or person acquiring
any security interest therein, or the successor in interest of any said person, against any
expense, loss, or damage, including reasonable attorneys' fees, by reason of the issuance of
the certificate of title to the vehicle or on account of any defect in or undisclosed security
interest upon the right, title and interest of the applicant in and to the vehicle. Any such
interested person shall have a right of action to recover on such bond for any breach of its
conditions, but the aggregate liability of the surety to all such persons shall in no event
exceed the amount of the bond. Unless the department has been notified of the pendency
of an action to recover on the bond and if all questions as to ownership and outstanding
security interests have been resolved to the satisfaction of the department, such bond, and
any deposit accompanying it, shall be returned at the end of three years or prior thereto in
the event the vehicle is no longer registered in this state and the currently valid certificate
of title is surrendered deleted text end new text begin and amount provided in subdivision 1b new text end .

Sec. 3.

Minnesota Statutes 2010, section 168A.07, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Ownership at issue; requirements for certificate issuance. new text end

new text begin (a) In the
event application is made in this state for a certificate of title on a vehicle with a model
year designated by the manufacturer of more than five years prior to the year in which
application is made, and the applicant is unable to establish sole ownership of the vehicle
because one or more owners, prior owners, or lienholders cannot be found, the department
shall issue a certificate of title to the applicant if the applicant submits:
new text end

new text begin (1) the application;
new text end

new text begin (2) a bond in the form and amount provided in subdivision 1b;
new text end

new text begin (3) an affidavit that identifies the make, model year, and vehicle identification
number of the vehicle, and includes a statement that:
new text end

new text begin (i) the applicant is an owner of the vehicle;
new text end

new text begin (ii) the applicant has physical possession of the vehicle; and
new text end

new text begin (iii) in attempting to transfer interest in the vehicle or obtain a certificate of title or
lien release, the applicant was unable after using due diligence to: (A) determine the
names or locations of one or more owners, prior owners, or lienholders; or (B) successfully
contact one or more owners, prior owners, or lienholders known to the applicant; and
new text end

new text begin (4) payment for required taxes and fees.
new text end

new text begin (b) Unless the department has been notified of the pendency of an action to recover
on the bond under paragraph (a), clause (2), the department shall allow it to expire at the
end of three years.
new text end

Sec. 4.

Minnesota Statutes 2010, section 168A.07, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Bond requirements. new text end

new text begin A bond filed under this section must be in the form
prescribed by the department and executed by the applicant, and either accompanied by
the deposit of cash or executed by a surety company authorized to do business in this state,
in an amount equal to one and one-half times the value of the vehicle as determined by
the department. The bond shall be conditioned to indemnify any prior owner and secured
party and any subsequent purchaser of the vehicle or person acquiring any security interest
therein, or the successor in interest of any said person, against any expense, loss, or
damage, including reasonable attorney fees, by reason of the issuance of the certificate of
title to the vehicle or on account of any defect in or undisclosed security interest upon the
right, title and interest of the applicant in and to the vehicle. Any such interested person
shall have a right of action to recover on such bond for any breach of its conditions, but
the aggregate liability of the surety to all such persons shall in no event exceed the amount
of the bond. Unless the department has been notified of the pendency of an action to
recover on the bond and if all questions as to ownership and outstanding security interests
have been resolved to the satisfaction of the department, such bond, and any deposit
accompanying it, shall be returned at the end of three years or prior thereto in the event
the vehicle is no longer registered in this state and the currently valid certificate of title
is surrendered.
new text end

Sec. 5.

Minnesota Statutes 2010, section 168A.20, subdivision 5, is amended to read:

Subd. 5.

Satisfaction of automobile lien seven years old; release.

A security
interest perfected under this chapter may be canceled seven years from the perfection
date for a passenger automobile, as defined in section 168.002, subdivision 24, upon the
request of the owner of the passenger automobile, if the owner has paid the lien in full and
is unable to locate the lienholder to obtain a lien release. At a minimum, the owner must
send a letter to the lienholder by certified mail, return receipt requested, requesting a lien
release. If the owner is unable to obtain a lien release by sending a letter by certified mail,
then the owner must present to the department or its agent the returned letter as evidence
of the attempted contact. This subdivision applies only to new text begin : (1) new text end vehicle owners who are
individuals new text begin ; or (2) dealers licensed under section 168.27, subdivision 2 or 3, who are
purchasing a vehicle from an individual owner for resale new text end .