As Introduced

130th General Assembly
Regular Session
2013-2014
H. B. No. 64


Representative Cera 

Cosponsors: Representatives Rogers, Hood 

A BILL
To amend sections 1548.20, 4503.13, and 4519.68 of 1
the Revised Code to provide that if a secured 2
party does not convey to the owner of a motor 3
vehicle, watercraft, outboard motor, off-highway 4
motorcycle, or all-purpose vehicle a physical 5
certificate of title after the security interest 6
has been discharged, the owner may obtain one 7
physical certificate of title from a clerk of a 8
court of common pleas at no charge.9


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1.  That sections 1548.20, 4503.13, and 4519.68 of 10
the Revised Code be amended to read as follows:11

       Sec. 1548.20.  (A) Chapter 1309. of the Revised Code does not 12
permit or require the deposit, filing, or other record of a 13
security interest covering a watercraft or outboard motor for 14
which a certificate of title is required. Any security agreement 15
covering a security interest in a watercraft or outboard motor, if 16
it is accompanied by delivery of a manufacturer's or importer's 17
certificate and followed by actual and continued possession of 18
that certificate by the holder of the instrument, or, in the case 19
of a certificate of title, if a notation of the security agreement 20
has been made by a clerk of a court of common pleas on the face of 21
the certificate of title or the clerk has entered a notation of 22
the agreement into the automated title processing system and a 23
physical certificate of title for the watercraft or outboard motor 24
has not been issued, shall be valid as against the creditors of 25
the debtor, whether armed with process or not, and against 26
subsequent purchasers, secured parties, and other lienholders or 27
claimants. All security interests, liens, mortgages, and 28
encumbrances entered into the automated title processing system in 29
relation to a particular certificate of title, regardless of 30
whether a physical certificate of title is issued, take priority 31
according to the order of time in which they are entered into the 32
automated title processing system by the clerk. Exposure for sale 33
of any watercraft or outboard motor by its owner, with the 34
knowledge or with the knowledge and consent of the holder of any 35
security interest, lien, mortgage, or encumbrance on the 36
watercraft or outboard motor, shall not render the security 37
interest lien, mortgage, or encumbrance ineffective as against the 38
creditors of the owner or against holders of subsequent security 39
interests, liens, mortgages, or encumbrances upon the watercraft 40
or outboard motor.41

       (B) If a secured party presents evidence of the security 42
interest to a clerk of a court of common pleas together with the 43
certificate of title, if a physical certificate of title for the 44
watercraft or outboard motor exists, and the fee prescribed by 45
section 1548.10 of the Revised Code, the clerk, unless the secured 46
party specifically requests the clerk not to issue a physical 47
certificate of title, shall issue a new original certificate of 48
title from the automated title processing records. The new 49
certificate shall indicate the security interest and the date of 50
the security interest. The clerk also shall note the security 51
interest and its date in the clerk's files and enter that 52
information into the automated title processing system, and on 53
that day shall notify the chief of the division of watercraft. The 54
clerk shall indicate by appropriate notation on the security 55
agreement itself the fact that the security interest has been 56
noted on the certificate of title.57

       (C) If a security interest is fully discharged as a result of 58
its holder's receipt of good funds in the correct amount and if 59
the holder holds a physical certificate of title, the holder shall 60
note the discharge of the security interest over the holder's 61
signature on the face of the certificate of title, or, if there is 62
not sufficient space for the notation on the face of the 63
certificate of title, the holder shall note the discharge over the 64
holder's signature on a form prescribed by the chief. Except as 65
otherwise provided in this section, prior to delivering the 66
certificate of title to the owner, the holder or the holder's 67
agent shall convey the certificate of title or a separate sworn 68
statement of the discharge of the security interest and any 69
additional information the chief requires to a clerk. The 70
conveyance shall occur not more than seven business days after the 71
date good funds in the correct amount to fully discharge the 72
security interest have been credited to an account of the holder, 73
provided the holder has been provided accurate information 74
concerning the watercraft or outboard motor. Conveyance of the 75
certificate of title or separate sworn statement of the discharge 76
within the required seven business days may be indicated by 77
postmark or receipt by a clerk within that period. If the 78
discharge of the security interest appears to be genuine, the 79
clerk shall note the discharge of the security interest on the 80
face of the certificate of title, if it was so conveyed, and note 81
it in the automated title processing system.82

       If a security interest is fully discharged as a result of its 83
holder's receipt of good funds in the correct amount and the 84
holder does not hold a physical certificate of title, when the 85
holder notifies a clerk of the discharge of its security interest, 86
the holder at that time also may request the clerk to issue a 87
physical certificate of title to the watercraft or outboard motor. 88
The request shall specify whether the clerk is to send the 89
certificate of title directly to the owner or to the holder or the 90
holder's agent for transmission to the owner. If such a request is 91
made, the clerk shall issue a physical certificate of title and 92
send it to the specified person.93

        The clerk shall not honor such a request for a physical 94
certificate of title if it is not made by the holder at the same 95
time as the holder's notification to the clerk of the discharge of 96
its security interest.97

       (D)(1) In all cases, a secured party may choose to present a 98
clerk with evidence of a security interest via electronic means, 99
and the clerk shall enter the security interest into the automated 100
title processing system. A secured party also may choose to notify 101
a clerk of the discharge of its security interest via electronic 102
means, and the clerk shall enter the cancellation into the 103
automated title processing system.104

       (2) In the case of a security interest that is being 105
satisfied by a watercraft dealer to whom a certificate of title is 106
being transferred, the cancellation of the security interest shall 107
occur during the course of the transfer. The dealer shall submit a 108
discharge request to the secured party. A discharge request shall 109
include good funds in the correct amount to fully discharge the 110
security interest and accurate information concerning the 111
watercraft or outboard motor.112

       (3)(a) Upon receiving a discharge request that complies with 113
division (D)(2) of this section, except as otherwise provided in 114
this division, a secured party shall convey the certificate of 115
title, with the discharge of the security interest noted on its 116
face, to the dealer within seven business days after the date good 117
funds in the correct amount to fully discharge the security 118
interest have been credited to an account of the secured party.119

       If a secured party is unable to convey to the dealer a 120
certificate of title within the required seven business days, the 121
secured party instead shall convey to the dealer an affidavit 122
stating that the security interest has been discharged, together 123
with payment for a duplicate certificate of title, within that 124
period.125

       (b) Conveyance of a certificate of title, or affidavit and 126
required payment, from a secured party to a dealer under the 127
circumstances described in division (D)(3)(a) of this section 128
within the required seven business days may be indicated by a 129
postmark within that period.130

       (4) A secured party is liable to a dealer for a late fee of 131
ten dollars per day for each certificate of title, or affidavit 132
and required payment, conveyed to the dealer more than seven 133
business days but less than twenty-one days after the date 134
specified in division (D)(3)(a) of this section and, from then on, 135
twenty-five dollars per day until the certificate of title, or 136
affidavit and required payment, are conveyed to the dealer.137

       (E) IfRegardless of whether a physical certificate of title 138
has not been issued for a watercraft or outboard motor and, if all 139
the security interests relating to that watercraft or outboard 140
motor have been discharged and if the secured party does not 141
convey to the owner of the watercraft or outboard motor a physical 142
certificate of title with the discharge noted on the certificate, 143
the owner of the watercraft or outboard motor may obtain aone144
physical certificate of title for the watercraft or outboard motor145
from the clerk of any court of common pleas uponwithout payment 146
of the fee specified in section 1548.10 of the Revised Code. The 147
owner of the watercraft or outboard motor thereafter may obtain a 148
duplicate physical certificate of title for the watercraft or 149
outboard motor from the clerk of any court of common pleas upon 150
payment of the fee specified in section 1548.10 of the Revised 151
Code.152

       (F) If a clerk of a court of common pleas, other than the 153
clerk of the court of common pleas of the county in which the 154
owner of a watercraft or outboard motor resides, enters a notation 155
of the existence of, or the cancellation of, a security interest 156
relating to the watercraft or outboard motor, the clerk shall 157
transmit the data relating to the notation to the automated title 158
processing system.159

       (G) The electronic transmission of security interest and 160
other information under this section shall comply with rules 161
adopted by the registrar of motor vehicles under section 4505.13 162
of the Revised Code.163

       (H) As used in this section:164

       (1) "Accurate information" means the serial number of the 165
watercraft or outboard motor, if any; the make and model of the 166
watercraft or outboard motor; and the name and address of the 167
owner of the watercraft or outboard motor as they appear on the 168
certificate of title that is to be conveyed.169

       (2) "Good funds" has the same meaning as in section 4505.13 170
of the Revised Code.171

       (3) "Watercraft dealer" has the same meaning as in section 172
1547.01 of the Revised Code.173

       Sec. 4505.13.  (A)(1) Chapter 1309. and section 1701.66 of 174
the Revised Code do not permit or require the deposit, filing, or 175
other record of a security interest covering a motor vehicle, 176
except as provided in division (A)(2) of this section.177

       (2) Chapter 1309. of the Revised Code applies to a security 178
interest in a motor vehicle held as inventory for sale by a 179
dealer. The security interest has priority over creditors of the 180
dealer as provided in Chapter 1309. of the Revised Code without 181
notation of the security interest on a certificate of title, 182
without entry of a notation of the security interest into the 183
automated title processing system if a physical certificate of 184
title for the motor vehicle has not been issued, or without the 185
retention of a manufacturer's or importer's certificate.186

       (B) Subject to division (A) of this section, any security 187
agreement covering a security interest in a motor vehicle, if a 188
notation of the agreement has been made by a clerk of a court of 189
common pleas on the face of the certificate of title or the clerk 190
has entered a notation of the agreement into the automated title 191
processing system and a physical certificate of title for the 192
motor vehicle has not been issued, is valid as against the 193
creditors of the debtor, whether armed with process or not, and 194
against subsequent purchasers, secured parties, and other 195
lienholders or claimants. All security interests, liens, 196
mortgages, and encumbrances entered into the automated title 197
processing system in relation to a particular certificate of 198
title, regardless of whether a physical certificate of title is 199
issued, take priority according to the order of time in which they 200
are entered into the automated title processing system by the 201
clerk. Exposure for sale of any motor vehicle by its owner, with 202
the knowledge or with the knowledge and consent of the holder of 203
any security interest, lien, mortgage, or encumbrance on it, does 204
not render that security interest, lien, mortgage, or encumbrance 205
ineffective as against the creditors of that owner, or against 206
holders of subsequent security interests, liens, mortgages, or 207
encumbrances upon that motor vehicle.208

       The secured party, upon presentation of evidence of a 209
security interest to a clerk of a court of common pleas, together 210
with the certificate of title if a physical certificate of title 211
for the motor vehicle exists, and the fee prescribed by section 212
4505.09 of the Revised Code, may have a notation of the security 213
interest made. Unless the secured party specifically requests the 214
clerk not to issue a physical certificate of title and instead to 215
issue an electronic certificate of title, the clerk shall issue, 216
over the clerk's signature and seal of office, a new original 217
certificate of title from the automated title processing records 218
that indicates the security interest and the date of the security 219
interest.220

       If a security interest is fully discharged as a result of its 221
holder's receipt of good funds in the correct amount and if the 222
holder holds a physical certificate of title, the holder shall 223
note the discharge of the security interest on the face of the 224
certificate of title over the holder's signature, or over the 225
holder's signature on a form prescribed by the registrar of motor 226
vehicles when there is no space for the discharge on the face of 227
the certificate of title. Except as otherwise provided in this 228
section, prior to delivering the certificate of title to the 229
owner, the holder or the holder's agent shall convey the 230
certificate of title or a separate statement of the discharge of 231
the security interest to a clerk. The conveyance shall occur not 232
more than seven business days after the date good funds in the 233
correct amount to fully discharge the security interest have been 234
credited to an account of the holder, provided the holder has been 235
provided accurate information concerning the motor vehicle. 236
Conveyance of the certificate of title or separate statement of 237
the discharge within the required seven business days may be 238
indicated by postmark or receipt by a clerk within that period, 239
or, in the case of a written confirmation that is sent 240
electronically as provided in division (C)(1) of this section, by 241
the date of the electronic mail or other electronic communication. 242
If the discharge of the security interest appears to be genuine, 243
the clerk shall note the cancellation of the security interest on 244
the face of the certificate of title, if it was so conveyed, and 245
note it in the automated title processing system.246

        If a security interest is fully discharged as a result of its 247
holder's receipt of good funds in the correct amount and the 248
holder does not hold a physical certificate of title, when the 249
holder notifies a clerk of the discharge of its security interest, 250
the holder at that time also may request the clerk to issue a 251
physical certificate of title to the vehicle. The request shall 252
specify whether the clerk is to send the certificate of title 253
directly to the owner or to the holder or the holder's agent for 254
transmission to the owner. If such a request is made, the clerk 255
shall issue a physical certificate of title and send it to the 256
specified person.257

       The clerk shall not honor such a request for a physical 258
certificate of title if it is not made by the holder at the same 259
time as the holder's notification to the clerk of the discharge of 260
its security interest.261

       (C)(1) In all cases, a secured party may choose to present a 262
clerk with evidence of a security interest via written 263
confirmation through electronic means, and the clerk shall enter 264
the security interest into the automated title processing system. 265
A secured party also may choose to notify a clerk of the discharge 266
of its security interest via electronic means, and the clerk shall 267
enter the cancellation into the automated title processing system.268

       (2) In the case of a security interest that is being 269
satisfied by a dealer to whom a certificate of title is being 270
transferred, the cancellation of the security interest shall occur 271
during the course of the transfer. The dealer shall submit a 272
discharge request to the secured party. A discharge request shall 273
include good funds in the correct amount to fully discharge the 274
security interest and accurate information concerning the motor 275
vehicle.276

       (3)(a) Upon receiving a discharge request that complies with 277
division (C)(2) of this section, if the current automated title 278
processing system record indicates that a physical title exists 279
for that motor vehicle, a secured party shall convey the physical 280
certificate of title, with the discharge of the security interest 281
noted on its face, to the dealer within seven business days after 282
the date good funds in the correct amount to fully discharge the 283
security interest have been credited to an account of the secured 284
party.285

       If a secured party is unable to convey to the dealer the 286
physical certificate of title within the required seven business 287
days, the secured party instead shall convey to the dealer an 288
affidavit stating that the security interest has been discharged, 289
together with payment for a duplicate certificate of title, within 290
that period. If the current automated title processing system 291
record for a motor vehicle indicates that an electronic title 292
exists for that motor vehicle, the secured party shall convey to 293
the dealer within the required seven business days written 294
confirmation that the security interest has been satisfied.295

       (b) Conveyance of a physical certificate of title, or 296
affidavit and required payment, or written confirmation that the 297
security interest has been satisfied from a secured party to a 298
dealer under the circumstances described in division (C)(3)(a) of 299
this section within the required seven business days may be 300
indicated by a postmark within that period or, in the case of a 301
written confirmation that is sent electronically, the date of the 302
electronic mail or other electronic communication.303

       (4) A secured party is liable to a dealer for a late fee of 304
ten dollars per day for each physical certificate of title, or 305
affidavit and required payment, or written confirmation that the 306
security interest has been satisfied that is conveyed to the 307
dealer more than seven business days but less than twenty-one days 308
after the date specified in division (C)(3)(a) of this section 309
and, from then on, twenty-five dollars per day until the physical 310
certificate of title, or affidavit and required payment, or 311
written confirmation that the security interest has been satisfied 312
is conveyed to the dealer.313

       (D) Notwithstanding any provision of Chapter 1310. of the 314
Revised Code or of any other law, the lease of a motor vehicle or 315
trailer does not constitute a conditional sale or create a 316
security interest merely because the lease agreement permits or 317
requires the lessor, at the end of the lease term, to adjust the 318
rental price to either a higher or a lower amount by reference to 319
the amount the lessor realizes upon the sale or other disposition 320
of the motor vehicle or trailer.321

       (E) IfRegardless of whether a physical certificate of title 322
has not been issued for a motor vehicle and, if all the security 323
interests relating to that motor vehicle have been discharged and 324
if the secured party does not convey to the owner of the motor 325
vehicle a physical certificate of title with the discharge noted 326
on the certificate, the owner of the motor vehicle may obtain a327
one physical certificate of title for the motor vehicle from the 328
clerk of any court of common pleas uponwithout payment of the fee 329
specified in section 4505.09 of the Revised Code. The owner of the 330
motor vehicle thereafter may obtain a duplicate physical 331
certificate of title for the motor vehicle from the clerk of any 332
court of common pleas upon payment of the fee specified in section 333
4505.09 of the Revised Code.334

       (F) If a clerk of a court of common pleas, other than the 335
clerk of the court of common pleas of the county in which the 336
owner of a motor vehicle resides, enters a notation of the 337
existence of, or the cancellation of, a security interest relating 338
to the motor vehicle, the clerk shall transmit the data relating 339
to the notation to the automated title processing system.340

       (G) The registrar of motor vehicles, in accordance with 341
Chapter 119. of the Revised Code, shall adopt rules governing the 342
electronic transmission of security interest and other information 343
under this section. In adopting the rules, the registrar shall 344
confer with the clerks of the courts of common pleas.345

       (H) As used in this section:346

       (1) "Accurate information" means the make and model of the 347
motor vehicle, its vehicle identification number, and the name and 348
address of its owner as they appear on the certificate of title 349
that is to be conveyed.350

       (2) "Dealer" has the same meaning as in section 4517.01 of 351
the Revised Code.352

       (3) "Good funds" includes cash, or a wire transfer, cashier's 353
check, certified check, draft, money order, or teller's check 354
issued by an insured financial institution, or a dealer's check 355
for which the secured party has received funds that are available 356
for withdrawal pursuant to "Availability of Funds and Collection 357
of Checks (Regulation CC)," 12 C.F.R. 229.358

       (4) "Inventory" has the same meaning as in section 1309.102 359
of the Revised Code.360

       (5) "Electronic certificate of title" means an electronic 361
record stored in the automated title processing system that 362
established ownership of a motor vehicle, as well as any security 363
interest that exists in that motor vehicle.364

       (6) "Written confirmation" means a communication from a 365
secured party to a motor vehicle dealer regarding the secured 366
party's security interest in a motor vehicle. A written 367
confirmation may be either a physical document or an electronic 368
communication such as electronic mail. Both types of written 369
confirmation may be conveyed under this section.370

       Sec. 4519.68.  (A)(1) Chapter 1309. of the Revised Code does 371
not permit or require the deposit, filing, or other record of a 372
security interest covering an off-highway motorcycle or 373
all-purpose vehicle, except as provided in division (A)(2) of this 374
section.375

       (2) Chapter 1309. of the Revised Code applies to a security 376
interest in an off-highway motorcycle or all-purpose vehicle held 377
as inventory, as defined in section 1309.102 of the Revised Code, 378
for sale by a dealer. The security interest has priority over 379
creditors of the dealer as provided in Chapter 1309. of the 380
Revised Code without notation of the security interest on a 381
certificate of title, without entry of a notation of the security 382
interest into the automated title processing system if a physical 383
certificate of title has not been issued, or without the retention 384
of a manufacturer's or importer's certificate.385

       (B) Subject to division (A) of this section, any security 386
agreement covering a security interest in an off-highway 387
motorcycle or all-purpose vehicle, if a notation of the agreement 388
has been made by a clerk of a court of common pleas on the face of 389
the certificate of title or if the clerk has entered a notation of 390
the agreement into the automated title processing system if a 391
physical certificate of title has not been issued, is valid as 392
against the creditors of the debtor, whether armed with process or 393
not, and against subsequent purchasers, secured parties, and other 394
lienholders or claimants. All security interests, liens, 395
mortgages, and encumbrances entered into the automated title 396
processing system in relation to a particular certificate of 397
title, regardless of whether a physical certificate of title is 398
issued, take priority according to the order of time in which they 399
are entered into the automated title processing system by the 400
clerk. Exposure for sale of any off-highway motorcycle or 401
all-purpose vehicle by its owner, with the knowledge or with the 402
knowledge and consent of the holder of any security interest, 403
lien, mortgage, or encumbrance on it, does not render the security 404
interest, lien, mortgage, or encumbrance ineffective as against 405
the creditors of the owner, or against holders of subsequent 406
security interests, liens, mortgages, or encumbrances upon the 407
off-highway motorcycle or all-purpose vehicle.408

       The secured party, upon presentation of evidence of a 409
security interest to a clerk of a court of common pleas, together 410
with the certificate of title if a physical certificate of title 411
for the off-highway motorcycle or all-purpose vehicle exists, and 412
the fee prescribed by section 4519.59 of the Revised Code, may 413
have a notation of the security interest made. Unless the secured 414
party specifically requests the clerk not to issue a physical 415
certificate of title and instead to issue an electronic 416
certificate of title, the clerk, over the clerk's signature and 417
seal of office, shall issue a new original certificate of title 418
from the automated title processing system that indicates the 419
security interest and the date of the security interest.420

       If a security interest is fully discharged as a result of its 421
holder's receipt of good funds in the correct amount and if the 422
holder holds a physical certificate of title, the holder shall 423
note the discharge of the security interest over the holder's 424
signature on the face of the certificate of title, or over the 425
holder's signature on a form prescribed by the registrar of motor 426
vehicles when there is no space for the discharge on the face of 427
the certificate of title. Except as otherwise provided in this 428
section, prior to delivering the certificate of title to the 429
owner, the holder or the holder's agent shall convey the 430
certificate of title or a separate sworn statement of the 431
discharge of the security interest to a clerk. The conveyance 432
shall occur not more than seven business days after the date good 433
funds in the correct amount to discharge fully the security 434
interest have been credited to an account of the holder, provided 435
the holder has been provided accurate information concerning the 436
off-highway motorcycle or all-purpose vehicle. Conveyance of the 437
certificate of title or separate sworn statement of the discharge 438
within the required seven business days may be indicated by 439
postmark or receipt by a clerk within that period. If the 440
discharge of the security interest appears to be genuine, the 441
clerk shall note the cancellation of the security interest on the 442
face of the certificate of title, if it was so conveyed, and also 443
shall note it in the automated title processing system.444

       If a security interest is fully discharged as a result of its 445
holder's receipt of good funds in the correct amount and the 446
holder does not hold a physical certificate of title, when the 447
holder notifies a clerk of the discharge of its security interest, 448
the holder at that time also may request the clerk to issue a 449
physical certificate of title to the off-highway motorcycle or 450
all-purpose vehicle. The request shall specify whether the clerk 451
is to send the certificate of title directly to the owner or to 452
the holder or the holder's agent for transmission to the owner. If 453
such a request is made, the clerk shall issue a physical 454
certificate of title and send it to the specified person.455

       The clerk shall not honor such a request for a physical 456
certificate of title if it is not made by the holder at the same 457
time as the holder's notification to the clerk of the discharge of 458
its security interest.459

       (C) In all cases, a secured party may choose to present a 460
clerk with evidence of a security interest via electronic means, 461
and the clerk shall enter the security interest into the automated 462
title processing system. A secured party also may choose to notify 463
a clerk of the discharge of its security interest via electronic 464
means, and the clerk shall enter the cancellation into the 465
automated title processing system.466

        (D) IfRegardless of whether a physical certificate of title 467
has not been issued for an off-highway motorcycle or all-purpose 468
vehicle and, if all the security interests relating to that 469
motorcycle or vehicle have been discharged and if the secured 470
party does not convey to the owner of the off-highway motorcycle 471
or all-purpose vehicle a physical certificate of title with the 472
discharge noted on the certificate, the owner of the motorcycle or 473
vehicle may obtain aone physical certificate of title from the 474
clerk of any court of common pleas uponwithout payment of the fee 475
specified in section 4519.59 of the Revised Code. The owner of the 476
off-highway motorcycle or all-purpose vehicle thereafter may 477
obtain a duplicate physical certificate of title for the 478
off-highway motorcycle or all-purpose vehicle from the clerk of 479
any court of common pleas upon payment of the fee specified in 480
section 4519.59 of the Revised Code.481

       (E) If a clerk of a court of common pleas, other than the 482
clerk of the court of common pleas of the county in which the 483
owner of an off-highway motorcycle or all-purpose vehicle resides, 484
enters a notation of the existence of, or the cancellation of, a 485
security interest relating to the off-highway motorcycle or 486
all-purpose vehicle, the clerk shall transmit the data relating to 487
the notation to the automated title processing system.488

       Section 2.  That existing sections 1548.20, 4503.13, and 489
4519.68 of the Revised are hereby repealed.490