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H. B. No. 372 As IntroducedAs Introduced
128th General Assembly | Regular Session | 2009-2010 |
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Representatives Amstutz, Yuko
Cosponsors:
Representatives Blessing, Chandler, Combs, Derickson, Evans, Grossman, Lehner, Murray, Okey
A BILL
To amend sections 1548.20, 4505.13, and 4519.68 of
the Revised Code to require a secured party to
convey a physical certificate of title to the
owner of a watercraft, outboard motor, motor
vehicle, off-highway motorcycle, or all-purpose
vehicle upon discharge of all security interests.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1548.20, 4505.13, and 4519.68 of the
Revised Code be amended to read as follows:
Sec. 1548.20.
(A) Chapter 1309. of the Revised Code does
not
permit or require the deposit, filing, or other
record of
a
security
interest covering a watercraft or outboard
motor for
which a certificate of
title is required. Any
security agreement
covering a security interest in a
watercraft
or outboard motor,
if
it is accompanied by delivery of
a
manufacturer's or
importer's
certificate and followed by actual
and
continued
possession of
that certificate by the holder of
the instrument,
or,
in the case
of a certificate of title, if a
notation of the
security agreement
has
been made by
a clerk of
a court of
common
pleas on the
face of
the
certificate
of title or the
clerk has entered a notation of
the
agreement into the automated
title processing system and a
physical certificate of title for
the watercraft or outboard motor
has not been issued, shall be
valid as against
the creditors
of
the
debtor, whether
armed
with process or not,
and against
subsequent
purchasers, secured
parties,
and other
lienholders or
claimants.
All
security
interests, liens, mortgages, and
encumbrances
entered into the
automated title
processing system in
relation to a particular
certificate of
title, regardless of
whether a
physical
certificate of
title
is issued, take priority
according
to the
order
of
time in
which
they are
entered into the
automated
title
processing system by the
clerk. Exposure for
sale
of any
watercraft or outboard motor
by its owner, with the
knowledge
or
with the knowledge and
consent of the holder of any
security
interest, lien,
mortgage, or
encumbrance
on the
watercraft or
outboard
motor, shall not render the
security
interest lien,
mortgage, or encumbrance
ineffective as against
the
creditors of
the owner or against
holders of
subsequent
security
interests,
liens, mortgages, or
encumbrances upon the
watercraft
or outboard
motor.
(B) If
a secured party presents
evidence of the security
interest to
a
clerk of
a court of common pleas
together with
the
certificate of
title, if a physical certificate
of title for
the
watercraft or
outboard motor exists, and the fee
prescribed
by
section 1548.10
of the
Revised
Code, the clerk,
unless the
secured
party
specifically requests the clerk not to
issue a
physical
certificate of title, shall issue a new original
certificate of
title
from
the
automated title processing
records. The new
certificate
shall indicate the
security
interest and the
date of
the security
interest. The clerk also
shall note the
security
interest and
its date
in
the clerk's
files
and
enter that
information into the automated title
processing system,
and on
that
day shall notify
the
chief of
the division
of
watercraft. The
clerk shall
indicate by
appropriate
notation on
the
security
agreement
itself the fact
that the
security
interest
has been
noted
on the certificate of
title.
(C) If a security interest is
fully
discharged
as a result of
its holder's receipt of good funds in
the correct amount and if
the holder holds a physical certificate
of title, the holder
shall
note the discharge
of
the
security interest over
the
holder's
signature
on the face
of
the certificate of title,
or,
if there
is
not
sufficient
space
for the notation on the face of
the
certificate of
title,
the
holder shall note the discharge
over
the
holder's
signature on a
form
prescribed
by the
chief.
Except
as
otherwise provided
in this section, prior
to delivering the
certificate
of title to
the owner, the
holder or
the
holder's
agent shall
convey the certificate of title or a
separate sworn
statement of
the discharge of the security interest
and any
additional
information the chief requires to
a clerk. The
conveyance shall occur not more
than seven business
days after the
date
good funds in
the correct amount to fully
discharge the
security interest have been credited to
an account
of the holder,
provided the
holder has been provided accurate
information
concerning the watercraft or
outboard motor.
Conveyance of the
certificate of title or
separate sworn statement
of the discharge
within the required
seven business days may be
indicated by
postmark or receipt by a
clerk within that period.
If
the
discharge of the security
interest appears to be genuine,
the
clerk
shall note the discharge
of the
security
interest
on the
face of the certificate
of title, if it was so
conveyed,
and note
it in the automated
title processing system.
If a security interest is fully discharged as a result of its
holder's receipt of good funds in the correct amount and the
holder does not hold a physical certificate of title, when the
holder notifies a clerk of the discharge of its security interest,
the holder at that time also may request the clerk to issue a
physical certificate of title to the watercraft or outboard motor.
The request shall specify whether the clerk is to send the
certificate of title directly to the owner or to the holder or the
holder's agent for transmission to the owner. If such a request is
made, the clerk shall issue a physical certificate of title and
send it to the specified person.
The clerk shall not honor such a request for a physical
certificate of title if it is not made by the holder at the same
time as the holder's notification to the clerk of the discharge of
its security interest.
(D)(1) In all cases, a secured party may choose to present a
clerk with evidence of a security interest via electronic means,
and the clerk shall enter the security interest into the automated
title processing system. A secured party also may choose to
notify
a clerk of the discharge of its security interest via
electronic
means, and the clerk shall enter the cancellation into
the
automated title processing system.
(2) In the case of a security interest that is being
satisfied by a watercraft dealer to whom a certificate of title is
being transferred, the cancellation of the security interest shall
occur during the course of the transfer. The dealer shall submit
a
discharge request to the secured party. A discharge request
shall
include good funds in the correct amount to fully discharge
the
security interest and accurate information concerning the
watercraft or outboard motor.
(3)(a) Upon receiving a discharge request that complies
with
division (D)(2) of this section, except as otherwise provided
in
this division, a secured party shall convey the certificate of
title, with the discharge of the security interest noted on its
face, to the dealer within seven business days after the date good
funds in the correct
amount to fully discharge the security
interest have been credited to an account of
the secured party.
If a secured party is unable to convey to the dealer a
certificate of title within the required seven business days, the
secured party instead shall convey to the dealer an affidavit
stating that the security interest has been discharged, together
with payment for a duplicate certificate of title, within that
period.
(b) Conveyance of a certificate of title, or affidavit and
required
payment, from a secured party to a dealer under the
circumstances described in division (D)(3)(a) of this section
within the required seven business days may be indicated by a
postmark within
that period.
(4) A secured party is liable to a dealer for a late fee of
ten dollars per day for each certificate of title, or affidavit
and required payment, conveyed to the dealer more than seven
business days but less than twenty-one days after the date
specified in division (D)(3)(a) of this section and, from then on,
twenty-five dollars per day until the certificate of title, or
affidavit and required payment, are conveyed to the dealer.
(E) If Regardless of whether a physical certificate of title
has not been issued
for a watercraft or outboard motor and, when
all the security interests
relating to that watercraft or outboard
motor have been
discharged, the secured party shall convey to the
owner of the watercraft or outboard motor may
obtain a physical
certificate of title from the clerk of any court
of common pleas
upon payment of the fee specified in section
1548.10 of the
Revised Code, which may be an original or a duplicate certificate
of title, with the discharge noted on the certificate.
(F) If a clerk of a court of common pleas, other than the
clerk of the court of common pleas of the county in which the
owner of a watercraft or outboard motor resides, enters a notation
of the existence of, or the cancellation of, a security interest
relating to the watercraft or outboard motor, the clerk shall
transmit the data relating to the notation to the
automated title
processing system.
(G) The electronic transmission of security interest and
other information under this section shall comply with rules
adopted by the registrar of motor vehicles under section 4505.13
of the Revised Code.
(H) As used in this section:
(1) "Accurate information" means the serial number of the
watercraft or outboard motor, if any; the make and model of the
watercraft or outboard motor; and the name and address of the
owner of the watercraft or outboard motor as they appear on the
certificate of title that is to be conveyed.
(2) "Good funds" has the same meaning as in section 4505.13
of the Revised Code.
(3) "Watercraft dealer" has the same meaning as in section
1547.01 of the Revised Code.
Sec. 4505.13. (A)(1)
Chapter
1309. and
section 1701.66 of
the Revised Code do not permit or
require the deposit,
filing,
or
other record of a security
interest covering a motor
vehicle,
except as provided in division
(A)(2) of this section.
(2)
Chapter 1309. of the Revised
Code
applies
to a
security
interest in a motor vehicle held
as inventory
for sale
by a
dealer. The security
interest has
priority
over
creditors
of the
dealer as provided
in
Chapter 1309. of the
Revised Code
without
notation of the security
interest on a
certificate of
title,
without entry of a notation of
the security
interest into
the
automated title processing system if a physical
certificate
of
title for
the motor vehicle has not been issued,
or without
the
retention of a
manufacturer's or importer's
certificate.
(B) Subject to division (A) of this section, any security
agreement covering a security interest in a motor vehicle, if a
notation of the agreement has been made by
a clerk of
a
court
of
common pleas on the face of the certificate of
title
or
the
clerk
has entered a notation of the agreement into the
automated
title
processing system and a physical certificate of
title
for
the
motor vehicle has not been issued, is valid
as
against the
creditors of the debtor, whether armed with
process
or
not, and
against subsequent purchasers, secured
parties, and
other
lienholders or claimants. All security
interests, liens,
mortgages, and encumbrances
entered into the automated
title
processing system in relation to
a particular certificate
of
title, regardless of whether
a
physical
certificate
of
title
is
issued, take priority according to the
order of time
in
which
they
are
entered into the
automated
title processing system by
the
clerk.
Exposure for sale of any
motor vehicle by its owner,
with
the
knowledge or with the
knowledge and consent of the
holder of
any
security interest,
lien, mortgage, or encumbrance
on it, does
not
render that
security interest, lien, mortgage,
or encumbrance
ineffective as
against the creditors of that
owner, or against
holders of
subsequent security interests,
liens, mortgages, or
encumbrances
upon that motor vehicle.
The secured party, upon presentation of
evidence of a
security
interest to
a clerk of
a court of common pleas,
together
with the
certificate of title
if a physical certificate
of title
for the
motor
vehicle exists, and the
fee prescribed
by
section
4505.09 of the Revised Code, may have a
notation of
the
security
interest made.
Unless the secured party
specifically
requests the
clerk not to
issue a physical
certificate of title
and instead to
issue an electronic
certificate of title, the
clerk
shall issue,
over the clerk's
signature and seal of office, a new
original
certificate
of
title from the automated title processing
records
that
indicates
the security interest and the date of the
security
interest.
If a security interest is
fully discharged
as a
result of its
holder's receipt of good funds in the correct amount
and if the
holder
holds a physical certificate of title,
the
holder
shall
note
the discharge
of the security interest
on
the face of the
certificate of title
over the holder's
signature,
or over the
holder's
signature on a form prescribed
by the
registrar of
motor
vehicles when there
is no space for
the
discharge on the
face of
the certificate of title.
Except
as
otherwise provided
in this
section, prior to
delivering the
certificate
of title to
the
owner, the holder or
the holder's
agent shall
convey the
certificate of
title or a
separate statement of the
discharge of
the
security interest
to
a clerk. The conveyance
shall occur not
more than seven business
days after the date good
funds in
the
correct amount to fully
discharge the security
interest have been
credited to
an account
of the holder, provided
the holder has been
provided accurate
information concerning the
motor vehicle.
Conveyance of the
certificate of title or separate
statement of
the discharge
within the required seven
business days may be
indicated by
postmark or receipt by a clerk
within that period,
or, in the case of a written confirmation that is sent
electronically as provided in division (C)(1) of this section, by
the date of the electronic mail or other electronic communication.
If the
discharge of
the security
interest
appears to
be genuine,
the
clerk shall note the cancellation
of
the
security interest
on
the face of the certificate of title,
if it
was so conveyed, and
note it in the
automated title
processing system.
If a security interest is fully discharged as a result of its
holder's receipt of good funds in the correct amount and the
holder does not hold a physical certificate of title, when the
holder notifies a clerk of the discharge of its security interest,
the holder at that time also may request the clerk to issue a
physical certificate of title to the vehicle. The request shall
specify whether the clerk is to send the certificate of title
directly to the owner or to the holder or the holder's agent for
transmission to the owner. If such a request is made, the clerk
shall issue a physical certificate of title and send it to the
specified person.
The clerk shall not honor such a request for a physical
certificate of title if it is not made by the holder at the same
time as the holder's notification to the clerk of the discharge of
its security interest.
(C)(1) In all cases, a secured party may choose to present
a
clerk with
evidence of a security interest via written
confirmation through electronic
means, and the clerk
shall enter
the security interest into the
automated
title processing system.
A secured party also may
choose to
notify a clerk of the discharge
of its security
interest via
electronic means, and the clerk shall
enter the
cancellation into
the automated title processing system.
(2) In the case of a security interest that is being
satisfied by a dealer to whom a certificate of
title
is being
transferred, the
cancellation of the security
interest
shall
occur
during the course of the
transfer. The dealer shall submit
a
discharge request to the secured party. A discharge request
shall
include good funds in the correct amount to fully discharge
the
security interest and accurate information concerning the
motor
vehicle.
(3)(a) Upon receiving a discharge request that complies
with
division (C)(2) of this section, if the current automated title
processing system record indicates that a physical title exists
for that motor vehicle, a secured party shall convey the physical
certificate of
title, with the discharge of the security interest
noted on its
face, to the dealer within seven business days after
the date good
funds in the correct
amount to fully discharge the
security
interest have been
credited to an account of
the secured
party.
If a secured party is unable to convey to the dealer the
physical
certificate of
title within the required seven business
days, the
secured
party instead shall convey to the dealer an
affidavit
stating that the
security interest
has
been discharged,
together
with payment for a duplicate
certificate
of title, within
that
period. If the current automated title processing system
record for a motor vehicle indicates that an electronic title
exists for that motor vehicle, the secured party shall convey to
the dealer within the required seven business days written
confirmation that the security interest has been satisfied.
(b) Conveyance of a physical certificate of title, or
affidavit and
required
payment, or written confirmation that the
security interest has been satisfied from a secured party to a
dealer under the
circumstances described in division (C)(3)(a) of
this section
within the required seven business days may be
indicated by a
postmark within that period or, in the case of a
written confirmation that is sent electronically, the date of the
electronic mail or other electronic communication.
(4) A secured party is liable to a dealer for a
late fee of
ten dollars per day for each physical certificate of title, or
affidavit
and required payment, or written confirmation that the
security interest has been satisfied that is conveyed to the
dealer more than seven
business days but
less than twenty-one days
after the date
specified in division
(C)(3)(a) of this section
and, from then on,
twenty-five dollars
per day
until the physical
certificate of title, or
affidavit and required
payment,
or
written confirmation that the security interest has been satisfied
is conveyed to the dealer.
(D) Notwithstanding any provision of
Chapter 1310. of the
Revised Code or of any other law, the
lease of a
motor vehicle
or
trailer does not constitute a
conditional sale
or create a
security interest merely because the
lease agreement
permits or
requires the lessor, at the end of the
lease term, to
adjust the
rental price to either a higher or a
lower amount by
reference
to
the amount the lessor realizes upon
the sale or
other
disposition
of the motor vehicle or trailer.
(E)
If Regardless of whether a physical certificate of title
has not been issued
for a
motor vehicle and, when all the security
interests relating to
that motor vehicle
have been discharged, the
secured party shall convey to the owner of the motor
vehicle may
obtain a physical
certificate of title from the clerk
of any court
of common pleas upon payment
of the fee specified in
section
4505.09 of the Revised
Code, which may be an original or a
duplicate certificate of title, with the discharge noted on the
certificate.
(F) If a clerk of a court of common pleas, other than the
clerk
of the court of common pleas of the county in which the
owner of a motor
vehicle resides, enters a notation of the
existence of, or the cancellation
of, a security interest
relating
to the motor vehicle, the clerk shall
transmit the data
relating
to the notation to the automated
title
processing
system.
(G) The registrar of motor vehicles, in accordance with
Chapter
119. of the Revised Code, shall adopt rules governing the
electronic transmission of security interest and other information
under this
section. In adopting the rules, the registrar shall
confer with the clerks of the courts of common pleas.
(H) As used in this section:
(1) "Accurate information" means the make and model of the
motor vehicle, its vehicle identification number, and the name and
address of
its owner as they appear on the certificate of title
that is
to be conveyed.
(2) "Dealer" has the same meaning as in section 4517.01 of
the Revised Code.
(3) "Good funds" includes cash, or a wire transfer,
cashier's
check, certified check, draft, money order, or teller's
check
issued by an insured financial institution, or a dealer's
check
for which the secured party has received funds that are
available
for withdrawal pursuant to "Availability of Funds and
Collection
of Checks (Regulation CC)," 12 C.F.R. 229.
(4) "Inventory" has the same meaning as in section
1309.102
of the Revised Code.
(5) "Electronic certificate of title" means an electronic
record stored in the automated title processing system that
established ownership of a motor vehicle, as well as any security
interest that exists in that motor vehicle.
(6) "Written confirmation" means a communication from a
secured party to a motor vehicle dealer regarding the secured
party's security interest in a motor vehicle. A written
confirmation may be either a physical document or an electronic
communication such as electronic mail. Both types of written
confirmation may be conveyed under this section.
Sec. 4519.68. (A)(1) Chapter 1309. of the Revised Code does
not permit or
require the deposit,
filing, or other record of a
security interest covering an off-highway
motorcycle or
all-purpose vehicle, except as provided
in division
(A)(2) of
this
section.
(2)
Chapter 1309. of the
Revised
Code
applies to a
security
interest in an off-highway
motorcycle or all-purpose
vehicle
held
as inventory, as defined
in
section 1309.102 of the
Revised
Code,
for
sale by a
dealer.
The security interest has
priority over
creditors of the
dealer
as provided in
Chapter
1309. of
the
Revised
Code without
notation of
the
security
interest on a
certificate of title,
without entry
of a
notation
of the security
interest into the
automated title
processing
system
if a physical
certificate of
title has not
been issued,
or without
the
retention
of a
manufacturer's or
importer's
certificate.
(B) Subject to
division (A) of this
section,
any security
agreement covering a security interest in an
off-highway
motorcycle or all-purpose vehicle,
if a notation of the
agreement
has been made by
a clerk of
a
court of common
pleas
on the
face
of
the certificate of title
or if the clerk
has
entered a
notation of
the
agreement into the automated title
processing
system if a
physical
certificate of title has not
been issued, is
valid as
against the
creditors of
the debtor,
whether armed with
process or
not, and against subsequent
purchasers, secured
parties, and other
lienholders or claimants.
All security
interests, liens,
mortgages, and
encumbrances
entered
into the automated title
processing
system in
relation
to a
particular certificate of
title, regardless of
whether a
physical certificate of title
is
issued,
take
priority
according
to the order of time in which they
are
entered into
the
automated title processing system by the
clerk.
Exposure for
sale of any off-highway motorcycle or
all-purpose
vehicle by its
owner, with the knowledge or with the
knowledge
and
consent of
the
holder of any security interest,
lien,
mortgage, or
encumbrance
on it, does not
render the
security
interest, lien,
mortgage, or encumbrance ineffective as
against
the creditors
of
the owner, or against holders of
subsequent
security interests,
liens,
mortgages, or
encumbrances upon the
off-highway
motorcycle
or all-purpose
vehicle.
The secured party, upon presentation of
evidence of a
security
interest to
a clerk
of
a court of
common pleas,
together
with the certificate of title
if a
physical
certificate
of title
for the off-highway motorcycle or all-purpose
vehicle
exists, and
the fee prescribed by
section 4519.59 of the
Revised
Code,
may
have a notation of the security interest made.
Unless the
secured
party specifically
requests
the
clerk not to issue a
physical
certificate of title
and instead
to issue an
electronic
certificate of title, the
clerk, over the
clerk's
signature and
seal of office,
shall
issue
a new original
certificate of title
from the
automated
title
processing system
that indicates the
security
interest
and the
date of the
security
interest.
If a security interest is
fully discharged
as a result of its
holder's receipt of good funds in the correct amount
and
if the
holder
holds a physical certificate of
title,
the
holder
shall
note
the
discharge
of the security interest
over
the holder's
signature on
the face of the
certificate of title,
or over the
holder's
signature on a form
prescribed by the
registrar of motor
vehicles when there is no
space for the
discharge on the face of
the
certificate of title.
Except as otherwise provided in
this
section, prior to
delivering the certificate
of title to
the
owner, the
holder or
the holder's agent shall
convey
the
certificate of title
or
a separate sworn statement of the
discharge of the security
interest to a clerk. The conveyance
shall occur not more than
seven business days after the date good
funds in the correct
amount to discharge fully the security
interest have been credited
to an account of the holder, provided
the holder has been provided
accurate information concerning the
off-highway motorcycle or
all-purpose vehicle. Conveyance of the
certificate of title or
separate sworn statement of the discharge
within the required
seven business days may be indicated by
postmark or receipt by a
clerk
within that period.
If
the
discharge
of the security
interest
appears to be genuine, the
clerk shall
note the
cancellation
of the security interest on the
face of the
certificate of title, if it was so conveyed, and
also
shall
note
it in the
automated
title processing system.
If a security interest is fully discharged as a result of its
holder's receipt of good funds in the correct amount and the
holder does not hold a physical certificate of title, when the
holder notifies a clerk of the discharge of its security interest,
the holder at that time also may request the clerk to issue a
physical certificate of title to the off-highway motorcycle or
all-purpose vehicle. The request shall specify whether the clerk
is to send the certificate of title directly to the owner or to
the holder or the holder's agent for transmission to the owner. If
such a request is made, the clerk shall issue a physical
certificate of title and send it to the specified person.
The clerk shall not honor such a request for a physical
certificate of title if it is not made by the holder at the same
time as the holder's notification to the clerk of the discharge of
its security interest.
(C)
In all cases, a secured party may choose to present a
clerk with evidence of a security interest via electronic means,
and the clerk shall enter the security interest into the automated
title processing system. A secured party also may choose to
notify
a clerk of the discharge of its security interest via
electronic
means, and the clerk shall enter the cancellation into
the
automated title processing system.
(D) If Regardless of whether a physical certificate of title
has not been issued
for
an off-highway motorcycle or all-purpose
vehicle and, when all the
security
interests relating to that
motorcycle or vehicle
have
been discharged, the secured party
shall convey to the owner of the motorcycle or vehicle may obtain
a
physical
certificate of title from the clerk of any court of
common pleas upon payment
of the fee specified in section 4519.59
of the Revised
Code, which may be an original or a duplicate
certificate of title, with the discharge noted on the certificate.
(E) If a clerk of a court of common pleas, other than the
clerk
of the court of common pleas of the county in which the
owner of an
off-highway motorcycle or all-purpose vehicle
resides,
enters a notation of
the existence of, or the
cancellation
of, a
security interest relating to the off-highway
motorcycle or
all-purpose
vehicle, the clerk shall
transmit the
data relating to
the notation to the automated
title processing
system.
Section 2. That existing sections 1548.20, 4505.13, and
4519.68 of the Revised Code are hereby repealed.
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