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H. B. No. 64 As IntroducedAs Introduced
130th General Assembly | Regular Session | 2013-2014 |
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Cosponsors:
Representatives Rogers, Hood
A BILL
To amend sections 1548.20, 4503.13, and 4519.68 of
the Revised Code to provide that if a secured
party does not convey to the owner of a motor
vehicle, watercraft, outboard motor, off-highway
motorcycle, or all-purpose vehicle a physical
certificate of title after the security interest
has been discharged, the owner may obtain one
physical certificate of title from a clerk of a
court of common pleas at no charge.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1548.20, 4503.13, 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, if all
the security interests relating to that watercraft or outboard
motor have been discharged and if the secured party does not
convey to the owner of the watercraft or outboard motor a physical
certificate of title with the discharge noted on the certificate,
the owner of the watercraft or outboard motor may obtain a one
physical certificate of title for the watercraft or outboard motor
from the clerk of any court of common pleas upon without payment
of the fee specified in section 1548.10 of the Revised Code. The
owner of the watercraft or outboard motor thereafter may obtain a
duplicate physical certificate of title for the watercraft or
outboard motor from the clerk of any court of common pleas upon
payment of the fee specified in section 1548.10 of the Revised
Code.
(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, if all the security
interests relating to that motor vehicle have been discharged and
if the secured party does not convey to the owner of the motor
vehicle a physical certificate of title with the discharge noted
on the certificate, the owner of the motor vehicle may obtain a
one physical certificate of title for the motor vehicle from the
clerk of any court of common pleas upon without payment of the fee
specified in section 4505.09 of the Revised Code. The owner of the
motor vehicle thereafter may obtain a duplicate physical
certificate of title for the motor vehicle from the clerk of any
court of common pleas upon payment of the fee specified in section
4505.09 of the Revised Code.
(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, if all the security interests relating to that
motorcycle or vehicle have been discharged and if the secured
party does not convey to the owner of the off-highway motorcycle
or all-purpose vehicle a physical certificate of title with the
discharge noted on the certificate, the owner of the motorcycle or
vehicle may obtain
a one physical certificate of title from the
clerk of any court of common pleas upon without payment of the fee
specified in section 4519.59 of the Revised Code. The owner of the
off-highway motorcycle or all-purpose vehicle thereafter may
obtain a duplicate physical certificate of title for the
off-highway motorcycle or all-purpose vehicle from the clerk of
any court of common pleas upon payment of the fee specified in
section 4519.59 of the Revised Code.
(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, 4503.13, and
4519.68 of the Revised are hereby repealed.
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