SB-0916, As Passed Senate, June 4, 2014

SUBSTITUTE FOR

SENATE BILL NO. 916

     A bill to amend 1949 PA 300, entitled

"Michigan vehicle code,"

by amending sections 217, 222, 229, and 233 (MCL 257.217, 257.222,

257.229, and 257.233), section 217 as amended by 2012 PA 498,

section 222 as amended by 2004 PA 493, section 229 as amended by

1988 PA 276, and section 233 as amended by 2006 PA 599.

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 vehicle having a value over

$2,500.00 or that is less than 10 years old, 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. 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 10 years old or older, 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 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 late 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. For a used or secondhand vehicle

dealer subject to section 235b, the late transfer fee 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, 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. However, as provided under section 238, the

secretary of state is not required to issue a title to the owner of

a vehicle or lienholder if the title is subject to a security

interest.

     (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 late transfer fee of $15.00

for an individual or dealer other than a used or secondhand vehicle

dealer subject to section 235b in addition to the fees specified in

section 806. The late transfer fee for a used or secondhand 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, 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. However, as provided under section 238, the

secretary of state is not required to issue a title to the owner of

a vehicle if the title is subject to a security interest.

     (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

that 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.

(7) (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."

     (8) On the front of the sales check or draft described under

subsection (7), the holder, finance company, credit union, or

banking institution shall note the name(s) name or names of the

prospective owner(s). owners. 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, 440.9994, 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. 222. (1) Except as otherwise provided in this act, the

secretary of state shall issue a registration certificate and a

certificate of title when registering a vehicle upon receipt of the

required fees. Except as otherwise provided in this act, the

secretary of state shall issue a certificate of title, unless a

security interest is entered electronically under section 238, upon

receipt of the required fees. The secretary of state shall issue a

flood, rebuilt, rebuilt salvage, salvage, or scrap certificate of

title for a vehicle brought into this state from another state or

jurisdiction that has a flood, rebuilt, salvage, or scrap

certificate of title issued by that other state or jurisdiction.

     (2) The secretary of state shall deliver the registration

certificate to the owner. The certificate shall contain on its face

the date issued, the name and address of the owner, the

registration number assigned to the vehicle, and a description of

the vehicle as determined by the secretary of state.

     (3) The certificate of title shall be manufactured in a manner

to prohibit as nearly as possible the ability to reproduce, alter,

counterfeit, forge, or duplicate the certificate of title without

ready detection. The certificate shall contain all of the following

on its face:

     (a) The identical information required on the face of the

registration certificate.

     (b) If the vehicle is a motor vehicle, the number of miles,

not including the tenths of a mile, registered on the vehicle's

odometer at the time of transfer.

     (c) Whether the vehicle is to be used or has been used as a

taxi, as a 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.

     (d) Whether the vehicle is a salvage vehicle.

     (e) If the vehicle has previously been issued a rebuilt

certificate of title from this state or a comparable certificate of

title from any other state or jurisdiction.

     (f) Whether the vehicle has been issued a scrap certificate of

title from this state or a comparable certificate of title from any

other state or jurisdiction.

     (g) Whether the vehicle is a flood vehicle or has previously

been issued a flood certificate of title from this state or any

other state or jurisdiction.

     (h) Whether the owner or co-owner or lessee or co-lessee of

the vehicle is subject to registration denial under section

219(1)(d).

     (i) A statement of the owner's title and of all security

interests in the vehicle or in an accessory on the vehicle as set

forth in the application.

     (j) The date that the application was filed.

     (k) Any other information that the secretary of state may

require.

     (4) The certificate of title shall contain a form for

assignment of title or interest and warranty of title by the owner

with space for the notation of a security interest in the vehicle

and in an accessory on the vehicle, which at the time of a transfer

shall be certified and signed, and space for a written odometer

mileage statement that is required upon transfer pursuant to under

section 233a. The certificate of title shall include a description

of the proper procedure for transferring the title of a motor

vehicle and for maintaining records of that transfer as provided

under this act, including, but not limited to, the electronic lien

title system established under section 241. The certificate of

title may also contain other forms that the secretary of state

considers necessary to facilitate the effective administration of

this act. The certificate shall bear the coat of arms of this

state.

     (5) The secretary of state shall mail or deliver the

certificate of title to the owner or other person as the owner may

direct in a separate instrument, in a form prescribed by the

secretary of state. However, as provided under section 238, the

secretary of state is not required to issue a title to the owner of

a vehicle if the title is subject to a security interest.

     (6) A person who intentionally reproduces, alters,

counterfeits, forges, or duplicates a certificate of title or a

document releasing a security interest or who uses a reproduced,

altered, counterfeited, forged, or duplicated certificate of title

or document releasing a security interest shall be punished as

follows:

     (a) If the intent of reproduction, alteration, counterfeiting,

forging, duplication, or use was to commit or aid in the commission

of an offense punishable by imprisonment for 1 or more years, the

person committing the reproduction, alteration, counterfeiting,

forging, duplication, or use is guilty of a misdemeanor, punishable

by imprisonment for a period equal to that which could be imposed

for the commission of the offense the person had the intent to aid

or commit. The court may also assess a fine of not more than

$10,000.00 against the person.

     (b) If the intent of the reproduction, alteration,

counterfeiting, forging, duplication, or use was to commit or aid

in the commission of an offense punishable by imprisonment for not

more than 1 year, the person committing the reproduction,

alteration, counterfeiting, forging, duplication, or use is guilty

of a misdemeanor, punishable by imprisonment for not more than 1

year, or a fine of not more than $1,000.00, or both.

     (7) The certificate of title for a police vehicle, a vehicle

owned by a political subdivision of this state, a salvage vehicle,

a rebuilt vehicle, a scrap vehicle, or a flood vehicle shall be

different in color from the certificate of title for all other

vehicles unless the vehicle is loaned or leased to a political

subdivision of this state for use as a driver education vehicle.

     (8) A scrap certificate of title shall contain a legend that

the vehicle is not to be titled or registered and is to be used for

parts or scrap metal only.

     (9) A certificate of title shall not be issued for a vehicle

that has had a salvage certificate of title unless the certificate

of title contains the legend "rebuilt salvage".

     Sec. 229. (1) If a registration certificate, registration

plate, certificate of title, or duplicate certificate of title is

lost, mutilated, or becomes illegible, the person entitled to

possession of a registration certificate, registration plate,

certificate of title, or duplicate certificate of title or the

legal representative or successor in interest of that person as

shown by the records of the department shall immediately make

application for and may obtain a duplicate or a new registration

under a new registration number, as determined to be most advisable

by the department, upon the applicant furnishing information

satisfactory to the department and upon payment of the required

fee. Every duplicate certificate of title shall contain the legend:

"This is a duplicate certificate and may be subject to the rights

of a person under the original certificate", and shall be delivered

to the person entitled to possession of a registration certificate

or certificate of title under section 222. Upon issuance of a

duplicate registration certificate or plate, the previous

registration certificate or plate last issued shall be void.

     (2) If a certificate of title is lost at the time that

ownership of the vehicle is to be transferred to another person,

the secretary of state need not issue a duplicate certificate of

title if all of the following are met:

     (a) The person from whom ownership of the vehicle is to be

transferred appears in person at a secretary of state office and

supplies evidence satisfactory to the secretary of state of his or

her identity and his or her ownership of the vehicle and pays the

fee required under section 806.

     (b) The person to whom the vehicle is to be transferred, or

his or her legal representative, accompanies the person described

under subdivision (a) and makes application for an original

certificate of title, supplies evidence satisfactory to the

secretary of state of his or her identity, and pays the fee

required under section 806.

     (3) If the secretary of state does not issue a duplicate

certificate of title pursuant to under subsection (2), the

secretary of state's records shall indicate the transfer of the

vehicle without a surrender of the certificate of title.

     (4) As provided under section 238, the secretary of state is

not required to issue a duplicate title to the owner of a vehicle

if the duplicate title is subject to a security interest.

     Sec. 233. (1) If the owner of a registered vehicle transfers

or assigns the title or interest in the vehicle, the registration

plates issued for the vehicle shall be removed and transferred to

the owner's spouse, mother, father, sister, brother, or child to

whom title or interest in the vehicle is transferred, or retained

and preserved by the owner for transfer to another vehicle upon

application and payment of the required fees. A person shall not

transfer the plates to a vehicle without applying for a proper

certificate of registration describing the vehicle to which the

plates are being transferred, except as provided in section 217(4).

If the owner of a registered vehicle acquires another vehicle

without transferring or assigning the title or interest in the

vehicle for which the plates were issued, the owner may have the

plates transferred to the subsequently acquired vehicle upon

application and payment of the required fees.

     (2) A person shall not purchase or lease another vehicle or an

interest in another vehicle with the intent to circumvent the

restrictions created by immobilization of a vehicle under this act.

     (3) A person shall not transfer or attempt to transfer

ownership or right of possession of a vehicle subject to forfeiture

or ordered forfeited under this act with the intent to avoid the

forfeiture of that vehicle.

     (4) During the time a vehicle is subject to a temporary

registration plate, vehicle forfeiture, immobilization,

registration denial, or the period from adjudication to

immobilization or forfeiture under this act, a person shall not

without a court order transfer or assign the title or an interest

in the vehicle to a person who is not subject to payment of a use

tax under section 3 of the use tax act, 1937 PA 94, MCL 205.93.

     (5) A person who violates subsection (2), (3), or (4) is

guilty of a misdemeanor punishable by imprisonment for not more

than 1 year or a fine of not more than $1,000.00, or both.

     (6) A person whose operator's or chauffeur's license is

suspended, revoked, or denied for, or who has never been licensed

by this state and was convicted for, a third or subsequent

violation of section 625 or 625m, of a local ordinance

substantially corresponding to section 625 or 625m, or of a law of

another state substantially corresponding to section 625 or 625m,

or for a fourth or subsequent suspension or revocation under

section 904 shall not purchase, lease, or otherwise acquire a motor

vehicle during the suspension, revocation, or denial period. A

person who violates this subsection is guilty of a misdemeanor

punishable by imprisonment for not more than 93 days or a fine of

not more than $100.00, or both.

     (7) If the assigned holder of registration plates applies for

a new registration certificate, the application shall be

accompanied either by the old registration certificate or by a

certificate of title showing the person to be the assigned holder

of the registration plates for which the old registration

certificate had been issued. A person who fails or neglects to

fulfill the requirements of this subsection is guilty of a

misdemeanor punishable by imprisonment for not more than 93 days or

a fine of not more than $100.00, or both.

     (8) The owner shall indorse on the certificate of title as

required by the secretary of state an assignment of the title with

warranty of title in the form printed on the certificate with a

statement of all security interests in the vehicle or in

accessories on the vehicle and deliver or cause the certificate to

be mailed or delivered to the purchaser or transferee at the time

of the delivery to the purchaser or transferee of the vehicle. The

certificate shall show the payment or satisfaction of any security

interest as shown on the original title. However, as provided under

section 238, the secretary of state is not required to issue a

title to the owner of a vehicle if the title is subject to a

security interest.

     (9) Upon the delivery of a motor vehicle and the transfer,

sale, or assignment of the title or interest in a motor vehicle by

a person, including a dealer, the effective date of the transfer of

title or interest in the vehicle is the date of signature on either

the application for title or the assignment of the certificate of

title by the purchaser, transferee, or assignee.

     (10) A secured receipt that is in a form approved by the

department and produced at the time the secured interest is

presented with payment in satisfaction of the security interest may

be submitted to the department in lieu of the title for purposes of

transferring ownership in the vehicle.

     Enacting section 1. This amendatory act does not take effect

unless both of the following bills of the 97th Legislature are

enacted into law:

     (a) Senate Bill No. 917.

     (b) Senate Bill No. 918.