1.1                          A bill for an act 
  1.2             relating to motor vehicles; requiring security 
  1.3             interest on vehicle subject to DWI-related forfeiture 
  1.4             to be perfected in order to protect interest of 
  1.5             secured party; amending Minnesota Statutes 2001 
  1.6             Supplement, section 169A.63, subdivision 7. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2001 Supplement, section 
  1.9   169A.63, subdivision 7, is amended to read: 
  1.10     Subd. 7.  [LIMITATIONS ON VEHICLE FORFEITURE.] (a) A 
  1.11  vehicle is subject to forfeiture under this section only if: 
  1.12     (1) the driver is convicted of the designated offense upon 
  1.13  which the forfeiture is based; 
  1.14     (2) the driver fails to appear with respect to the 
  1.15  designated offense charge in violation of section 609.49 
  1.16  (release; failure to appear); or 
  1.17     (3) the driver's conduct results in a designated license 
  1.18  revocation and the driver either fails to seek administrative or 
  1.19  judicial review of the revocation in a timely manner as required 
  1.20  by section 169A.53 (administrative and judicial review of 
  1.21  license revocation), or the license revocation is sustained 
  1.22  under section 169A.53. 
  1.23     (b) A vehicle encumbered by a bona fide security interest 
  1.24  perfected according to section 168A.17, subdivision 2, or 
  1.25  subject to a lease that has a term of 180 days or more, is 
  1.26  subject to the interest of the secured party or lessor unless 
  2.1   the party or lessor had knowledge of or consented to the act 
  2.2   upon which the forfeiture is based.  However, when the proceeds 
  2.3   of the sale of a seized vehicle do not equal or exceed the 
  2.4   outstanding loan balance, the appropriate agency shall remit all 
  2.5   proceeds of the sale to the secured party.  If the sale of the 
  2.6   vehicle is conducted in a commercially reasonable manner 
  2.7   consistent with the provisions of section 336.9-610, the agency 
  2.8   is not liable to the secured party for any amount owed on the 
  2.9   loan in excess of the sale proceeds if the secured party 
  2.10  received notification of the time and place of the sale at least 
  2.11  three days prior to the sale. 
  2.12     (c) Notwithstanding paragraphs (b) and (d), the secured 
  2.13  party's, lessor's, or owner's interest in a vehicle is not 
  2.14  subject to forfeiture based solely on the secured party's, 
  2.15  lessor's, or owner's knowledge of the act or omission upon which 
  2.16  the forfeiture is based if the secured party, lessor, or owner 
  2.17  took reasonable steps to terminate use of the vehicle by the 
  2.18  offender. 
  2.19     (d) A motor vehicle is subject to forfeiture under this 
  2.20  section only if its owner knew or should have known of the 
  2.21  unlawful use or intended use. 
  2.22     (e) A vehicle subject to a security interest, based upon a 
  2.23  loan or other financing arranged by a financial institution, is 
  2.24  subject to the interest of the financial institution.