SF 2752

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to motor vehicles; creating limited security interest for cosigner of
loan agreement to purchase motor vehicle; amending Minnesota Statutes 2006,
sections 168A.05, by adding a subdivision; 168A.16.

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

Section 1.

Minnesota Statutes 2006, section 168A.05, is amended by adding a
subdivision to read:

new text begin Subd. 7a. new text end

new text begin Interest of cosigner. new text end

new text begin (a) A person described in paragraph (c) who cosigns
with another person a loan agreement as surety to enable the other person to obtain an
installment loan for purchasing a vehicle defined in section 168.011 as a passenger vehicle,
pickup truck, or van, holds and reserves a security interest in the vehicle to the extent of
costs necessarily incurred by the cosigner.
new text end

new text begin (b) Costs "necessarily incurred" are those costs incurred by the cosigner on behalf of
the owner in possession, and only include:
new text end

new text begin (1) an installment payment made to prevent default on the loan agreement;
new text end

new text begin (2) payment of the annual registration tax required under section 168.013 or the
sales tax required under chapter 297B; or
new text end

new text begin (3) payment of a claim by a court for unpaid fines and court costs resulting from
an offense committed by the owner in possession and arising out of the operation of
the vehicle.
new text end

new text begin (c) Paragraph (a) applies only to a cosigner who:
new text end

new text begin (1) is listed as an owner on the vehicle's certificate of title;
new text end

new text begin (2) is not in possession of the vehicle;
new text end

new text begin (3) has access to the motor vehicle only with the permission of the owner in
possession; and
new text end

new text begin (4) does not reside in the same household as the owner in possession of the motor
vehicle.
new text end

new text begin (d) The security interest reserved under this subdivision:
new text end

new text begin (1) is subordinate to a security interest held under section 168A.04, subdivision
2; and
new text end

new text begin (2) does not affect the rights of a prior secured party under a security agreement.
new text end

Sec. 2.

Minnesota Statutes 2006, section 168A.16, is amended to read:

168A.16 INAPPLICABLE LIEN OR SECURITY INTEREST.

(a) Sections 168A.01 to 168A.31 do not apply to or affect:

(1) a lien given by statute or rule of law to a supplier of services or materials for
the vehicle;

(2) a lien given by statute to the United States;

(3) a security interest in a vehicle created by a manufacturer or dealer who holds
the vehicle for sale.

(b) Sections 168A.17 to 168A.19 do not apply to or affect a lien given by statute or
assignment to this state or any political subdivision of this state.

new text begin (c) Sections 168A.17 to 168A.19 do not apply to or affect a security interest reserved
under section 168A.05, subdivision 7a.
new text end