HF 2187

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 03/05/2012 04:09pm

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; 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 new text begin
in the form and amount provided in subdivision 1b.
new text end

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
the bond under paragraph (a), clause (2), the department shall allow it to expire at the
end of three years.
new text end

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 new text end 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 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.

Sec. 3.

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 .