May 23, 2012, Introduced by Rep. Jacobsen and referred to the Committee on Commerce.
A bill to amend 1949 PA 300, entitled
"Michigan vehicle code,"
by amending sections 217 and 235 (MCL 257.217 and 257.235), section
217 as amended by 2005 PA 36 and section 235 as amended by 2002 PA
652, and by adding section 235b.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 217. (1) An owner of a vehicle that is subject to
registration under this act shall apply to the secretary of state,
upon an appropriate form furnished by the secretary of state, for
the registration of the vehicle and issuance of a certificate of
title for the vehicle. A vehicle brought into this state from
another state or jurisdiction that has a rebuilt, salvage, scrap,
flood, or comparable certificate of title issued by that other
state or jurisdiction shall be issued a rebuilt, salvage, scrap, or
flood certificate of title by the secretary of state. The
application shall be accompanied by the required fee. An
application for a certificate of title shall bear the signature or
verification and certification of the owner. The application shall
contain all of the following:
(a) The owner's name, the owner's bona fide residence, and
either of the following:
(i) If the owner is an individual, the owner's mailing address.
(ii) If the owner is a firm, association, partnership, limited
liability company, or corporation, the owner's business address.
(b) A description of the vehicle including the make or name,
style of body, and model year; the number of miles, not including
the tenths of a mile, registered on the vehicle's odometer at the
time of transfer; whether the vehicle is a flood vehicle or another
state previously issued the vehicle a flood certificate of title;
whether the vehicle is to be or has been used as a taxi or police
vehicle, or by a political subdivision of this state, unless the
vehicle is owned by a dealer and loaned or leased to a political
subdivision of this state for use as a driver education vehicle;
whether the vehicle has previously been issued a salvage or rebuilt
certificate of title from this state or a comparable certificate of
title from any other state or jurisdiction; vehicle identification
number; and the vehicle's weight fully equipped, if a passenger
vehicle registered in accordance with section 801(1)(a), and, if a
trailer coach or pickup camper, in addition to the weight, the
manufacturer's serial number, or in the absence of the serial
number, a number assigned by the secretary of state. A number
assigned by the secretary of state shall be permanently placed on
the trailer coach or pickup camper in the manner and place
designated by the secretary of state.
(c) A statement of the applicant's title and the names and
addresses of the holders of security interests in the vehicle and
in an accessory to the vehicle, in the order of their priority.
(d) Further information that the secretary of state reasonably
requires to enable the secretary of state to determine whether the
vehicle is lawfully entitled to registration and the owner entitled
to a certificate of title. If the secretary of state is not
satisfied as to the ownership of a late model vehicle or other
vehicle having a value over $2,500.00, before registering the
vehicle and issuing a certificate of title, the secretary of state
may require the applicant to file a properly executed surety bond
in a form prescribed by the secretary of state and executed by the
applicant and a company authorized to conduct a surety business in
this state. The bond shall be in an amount equal to twice the value
of the vehicle as determined by the secretary of state and shall be
conditioned to indemnify or reimburse the secretary of state, any
prior owner, and any subsequent purchaser or lessee of the vehicle
and their successors in interest against any expense, loss, or
damage, including reasonable attorney's fees, by reason of the
issuance of a certificate of title for the vehicle or on account of
any defect in the right, title, or interest of the applicant in the
vehicle. An interested person has a right of action to recover on
the bond for a breach of the conditions of the bond, but the
aggregate liability of the surety to all persons shall not exceed
the amount of the bond. The bond shall be returned at the end of 3
years, or before 3 years if the vehicle is no longer registered in
this state and the currently valid certificate of title is
surrendered to the secretary of state, unless the secretary of
state has received notification of the pendency of an action to
recover on the bond. If the secretary of state is not satisfied as
to the ownership of a vehicle that is valued at $2,500.00 or less
and that is not a late model vehicle, the secretary of state shall
require the applicant to certify that the applicant is the owner of
the vehicle and entitled to register and title the vehicle.
(e) Except as provided in subdivision (f), an application for
a commercial vehicle shall also have attached a scale weight
receipt of the motor vehicle fully equipped as of the time the
application is made. A scale weight receipt is not necessary if
there is presented with the application a registration receipt of
the previous year that shows on its face the empty weight of the
motor vehicle as registered with the secretary of state that is
accompanied by a statement of the applicant that there has not been
structural change in the motor vehicle that has increased the empty
weight and that the previous registered weight is the true weight.
(f) An application for registration of a vehicle on the basis
of elected gross weight shall include a declaration by the
applicant specifying the elected gross weight for which application
is being made.
(g) If the application is for a certificate of title of a
motor vehicle registered in accordance with section 801(1)(p), the
application shall include the manufacturer's suggested base list
price for the model year of the vehicle. Annually, the secretary of
state shall publish a list of the manufacturer's suggested base
list price for each vehicle being manufactured. Once a base list
price is published by the secretary of state for a model year for a
vehicle, the base list price shall not be affected by subsequent
increases in the manufacturer's suggested base list price but shall
remain the same throughout the model year unless changed in the
annual list published by the secretary of state. If the secretary
of state's list has not been published for that vehicle by the time
of the application for registration, the base list price shall be
the manufacturer's suggested retail price as shown on the label
required to be affixed to the vehicle under 15 USC 1232. If the
manufacturer's suggested retail price is unavailable, the
application shall list the purchase price of the vehicle as defined
in section 801.
(2) An applicant for registration of a leased pickup truck or
passenger vehicle that is subject to registration under this act,
except a vehicle that is subject to a registration fee under
section 801g, shall disclose in writing to the secretary of state
the lessee's name, the lessee's bona fide residence, and either of
the following:
(a) If the lessee is an individual, the lessee's Michigan
driver license number or Michigan personal identification number
or, if the lessee does not have a Michigan driver license or
Michigan personal identification number, the lessee's mailing
address.
(b) If the lessee is a firm, association, partnership, limited
liability company, or corporation, the lessee's business address.
(3) The secretary of state shall maintain the information
described in subsection (2) on the secretary of state's computer
records.
(4) Except as provided in subsection (5), a dealer selling,
leasing, or exchanging vehicles required to be titled, within 15
days after delivering a vehicle to the purchaser or lessee, and a
person engaged in the sale of vessels required to be numbered by
part 801 of the natural resources and environmental protection act,
1994 PA 451, MCL 324.80101 to 324.80199, within 15 days after
delivering a boat trailer weighing less than 2,500 pounds to the
purchaser or lessee, shall apply to the secretary of state for a
new title, if required, and transfer or secure registration plates
and secure a certificate of registration for the vehicle or boat
trailer, in the name of the purchaser or lessee. The dealer's
license may be suspended or revoked in accordance with section 249
for failure to apply for a title when required or for failure to
transfer or secure registration plates and certificate of
registration within the 15 days required by this section. If the
dealer or person fails to apply for a title when required, and to
transfer or secure registration plates and secure a certificate of
registration and pay the required fees within 15 days of delivery
of the vehicle or boat trailer, a title and registration for the
vehicle or boat trailer may subsequently be acquired only upon the
payment of a transfer fee of $15.00 for an individual or a dealer
other than a dealer subject to section 235b in addition to the fees
specified in section 806. The transfer fee for a used vehicle
dealer subject to section 235b is $100.00 in addition to the fees
specified in section 806. The purchaser or lessee of the vehicle or
the purchaser of the boat trailer shall sign the application,
including,
when if applicable, the declaration specifying the
maximum
elected gross weight , as
required by subsection (1)(f),
and other necessary papers to enable the dealer or person to secure
the title, registration plates, and transfers from the secretary of
state. If the secretary of state mails or delivers a purchaser's
certificate of title to a dealer, the dealer shall mail or deliver
the certificate of title to the purchaser not more than 5 days
after receiving the certificate of title from the secretary of
state.
(5) A dealer selling or exchanging an off lease or buy back
vehicle shall apply to the secretary of state for a new title for
the vehicle within 15 days after it receives the certificate of
title from the lessor or manufacturer under section 235 or section
235b and transfer or secure registration plates and secure a
certificate of registration for the vehicle in the name of the
purchaser. The dealer's license may be suspended or revoked in
accordance with section 249 for failure to apply for a title when
required or for failure to transfer or secure registration plates
and certificate of registration within the 15-day period. If the
dealer or person fails to apply for a title when required, and to
transfer or secure registration plates and secure a certificate of
registration and pay the required fees within the 15-day time
period, a title and registration for the vehicle may subsequently
be acquired only upon the payment of a transfer fee of $15.00 for
an individual or dealer other than a used vehicle dealer subject to
section 235b in addition to the fees specified in section 806. The
transfer fee for a used vehicle dealer subject to section 235b is
$100.00 in addition to the fees specified in section 806. The
purchaser of the vehicle shall sign the application, including,
when
if applicable, the declaration specifying the maximum
elected
gross
weight , as
required by subsection (1)(f), and other
necessary papers to enable the dealer or person to secure the
title, registration plates, and transfers from the secretary of
state. If the secretary of state mails or delivers a purchaser's
certificate of title to a dealer, the dealer shall mail or deliver
the certificate of title to the purchaser not more than 5 days
after receiving the certificate of title from the secretary of
state.
(6) If a vehicle is delivered to a purchaser or lessee who has
valid Michigan registration plates that are to be transferred to
the vehicle, and an application for title, if required, and
registration for the vehicle is not made before delivery of the
vehicle to the purchaser or lessee, the registration plates shall
be affixed to the vehicle immediately, and the dealer shall provide
the purchaser or lessee with an instrument in writing, on a form
prescribed by the secretary of state, which shall serve as a
temporary registration for the vehicle for a period of 15 days from
the date the vehicle is delivered.
(7) An application for a certificate of title that indicates
the existence of a security interest in the vehicle or in an
accessory to the vehicle, if requested by the security interest
holder, shall be accompanied by a copy of the security agreement
which need not be signed. The request may be made of the seller on
an annual basis. The secretary of state shall indicate on the copy
the date and place of filing of the application and return the copy
to the person submitting the application who shall forward it to
the holder of the security interest named in the application.
(8) If the seller does not prepare the credit information,
contract note, and mortgage, and the holder, finance company,
credit union, or banking institution requires the installment
seller to record the lien on the title, the holder, finance
company, credit union, or banking institution shall pay the seller
a service fee of not more than $10.00. The service fee shall be
paid from the finance charges and shall not be charged to the buyer
in addition to the finance charges. The holder, finance company,
credit union, or banking institution shall issue its check or bank
draft for the principal amount financed, payable jointly to the
buyer and seller, and there shall be imprinted on the back side of
the check or bank draft the following:
"Under Michigan law, the seller must record a first lien in
favor of (name of lender) _______________ on the vehicle with
vehicle identification number _______________ and title the vehicle
only in the name(s) shown on the reverse side." On the front of the
sales check or draft, the holder, finance company, credit union, or
banking institution shall note the name(s) of the prospective
owner(s). Failure of the holder, finance company, credit union, or
banking institution to comply with these requirements frees the
seller from any obligation to record the lien or from any liability
that may arise as a result of the failure to record the lien. A
service fee shall not be charged to the buyer.
(9) In the absence of actual malice proved independently and
not inferred from lack of probable cause, a person who in any
manner causes a prosecution for larceny of a motor vehicle; for
embezzlement of a motor vehicle; for any crime an element of which
is the taking of a motor vehicle without authority; or for buying,
receiving, possessing, leasing, or aiding in the concealment of a
stolen, embezzled, or converted motor vehicle knowing that the
motor vehicle has been stolen, embezzled, or converted, is not
liable for damages in a civil action for causing the prosecution.
This subsection does not relieve a person from proving any other
element necessary to sustain his or her cause of action.
(10) Receipt by the secretary of state of a properly tendered
application for a certificate of title on which a security interest
in a vehicle is to be indicated is a condition of perfection of a
security interest in the vehicle and is equivalent to filing a
financing statement under the uniform commercial code, 1962 PA 174,
MCL 440.1101 to 440.11102, with respect to the vehicle. When a
security interest in a vehicle is perfected, it has priority over
the rights of a lien creditor as lien creditor is defined in
section 9102 of the uniform commercial code, 1962 PA 174, MCL
440.9102.
Sec. 235. (1) If the transferee of a vehicle is a new motor
vehicle dealer or a used vehicle dealer that acquires the vehicle
for resale, the dealer is not required to obtain a new registration
of the vehicle or forward the certificate of title to the secretary
of state, but shall retain and have in the dealer's immediate
possession the assigned certificate of title with the odometer
information properly completed, except as otherwise provided in
section 235b. A dealer shall obtain a certificate of title for a
vehicle having a salvage certificate of title before the dealer may
operate the vehicle under dealer's license plates. Upon
transferring title or interest to another person that is not a
dealer, the dealer shall complete an assignment and warranty of
title upon the certificate of title, salvage certificate of title,
or dealer reassignment of title form and make an application for
registration and a new title as provided in section 217(4).
(2) The dealer or transferee is liable for all damages arising
from the operation of the vehicle while the vehicle is in the
dealer's or transferee's possession.
(3) Upon transferring title or interest to another dealer, the
dealer shall complete an assignment and warranty of title upon the
certificate of title, salvage certificate of title, or dealer
reassignment of title form and deliver it to the licensed dealer to
which the transfer is made.
(4) The secretary of state shall prescribe the dealer
reassignment of title form. The form shall contain the title number
of the accompanying title; the name, address, and, if applicable,
dealer license number of the transferee; the year, make, model,
body type, and vehicle identification number of the vehicle; the
name, address, dealer number, and signature of the transferor; an
odometer mileage statement pursuant to section 233a; and any other
information the secretary of state requires.
(5) This section does not prohibit a dealer from selling a buy
back vehicle while the certificate of title is in the possession of
a manufacturer that obtained the certificate of title under the
manufacturer's buy back vehicle program. The manufacturer shall
mail the certificate of title to the dealer within 5 business days
after the manufacturer's receipt of a signed statement from the
purchaser of the vehicle acknowledging he or she was informed by
the dealer that the manufacturer acquired title to the vehicle as
the result of an arbitration proceeding, pursuant to a customer
satisfaction policy adopted by the manufacturer, or under 1986 PA
87, MCL 257.1401 to 257.1410, or a similar law of another state.
(6) This section does not prohibit a dealer from selling an
off lease vehicle while the certificate of title is in the
possession of a lessor. The lessor shall mail the certificate of
title to the dealer within 21 days after the lessor receives the
purchase price of the vehicle and any other fees and charges due
under the lease.
Sec. 235b. (1) A used vehicle dealer may voluntarily enter
into a written agreement with an inventory lender allowing the
inventory lender to retain in its possession the certificate of
title for a vehicle that is subject to an inventory loan if all of
the following conditions have been met:
(a) The used vehicle dealer posts a notice on the used vehicle
window disclosing the existence of the used vehicle dealer's
inventory loan for the vehicle. The notice under this subdivision
shall include the name, address, telephone number, and internet
address of the used vehicle inventory lender in a manner and of a
size sufficient to alert potential buyers of the existence of
inventory loan, contact information for the holder of that
inventory loan, and that the inventory lender holds the title to
the vehicle in its possession.
(b) The used vehicle dealer maintains a color copy of the
certificate of title, either in paper or electronic form, at the
used vehicle dealer's place of business. The color copy of the
certificate of title shall indicate on its face that it is a copy.
The colored copy of the title shall be presented to the buyer at
the time of purchase in paper or electronic form.
(c) The used vehicle dealer maintains a paper or electronic
copy of the inventory loan agreement between the used vehicle
dealer and the vehicle inventory lender, along with the inventory
list, which shall be not more than 5 days old. These documents
shall be made available to the secretary of state upon the request
of the secretary of state.
(2) A used vehicle dealer's inventory lender shall release the
certificate of title to the used vehicle dealer, the used vehicle
dealer's designee, and the secretary of state not more than 2
banking business days after the used vehicle dealer's inventory
lender receives 1 of the following:
(a) The outstanding principal balance and any other fees and
charges due on the vehicle under the inventory loan.
(b) A written request from the used vehicle dealer with proof
of full payment evidencing that the vehicle has been sold to a
buyer in the ordinary course of business under section 9320 of the
uniform commercial code, 1962 PA 174, MCL 440.9320, or a
substantially similar law of another state.
(c) A written request from the purchaser and proof of full
payment evidencing that the purchaser's status as a buyer in the
ordinary course of business under section 9320 of the uniform
commercial code, 1962 PA 174, MCL 440.9320, or a substantially
similar law of another state.
(d) A written request from the secretary of state.
(3) A used vehicle dealer's inventory lender that fails to
release a vehicle title as required under subsection (2) may be
ordered to pay a civil fine of $500.00.
(4) A used vehicle inventory lender shall register with the
secretary of state in a form and manner as prescribed by the
secretary of state to provide its location and contact information.
No fee shall be charged for registration under this subsection.
(5) This section applies solely to a used vehicle dealer whose
capital stock is not owned, in whole or in part, by an individual
or entity that also owns any capital stock in an entity holding a
new vehicle dealer license.
(6) Section 235 applies to used vehicle dealers under this
section only to the extent that section 235 does not conflict with
this section.
(7) As used in this section:
(a) "License" means pertinent licensure under section 248.
(b) "New vehicle dealer" means a dealer that buys and sells
new vehicles under a franchise agreement or contract with the
manufacturer of the new vehicle and that is licensed as a new
vehicle dealer in this state.
(c) "Used vehicle dealer" means a dealer that buys and sells
used vehicles and that is licensed as a used vehicle dealer in this
state.