Senate Study Bill 1232 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON BOWMAN) A BILL FOR An Act relating to registration fees for, and security 1 interests on, motor vehicles, and providing penalties. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2384SC (2) 86 ns/nh

S.F. _____ Section 1. Section 321.50, subsection 5, paragraph a, Code 1 2015, is amended to read as follows: 2 a. When a security interest is discharged, the holder shall 3 note a cancellation of the security interest on the face of the 4 certificate of title over the holder’s signature and deliver 5 the certificate of title to the county treasurer where the 6 title was issued. In the case of a security interest that has 7 been delivered by electronic means, the holder shall notify 8 the department or the county treasurer, in a manner prescribed 9 by the department, of the release of the security interest. 10 The county treasurer shall immediately note the cancellation 11 of the security interest on the face of the certificate of 12 title, if applicable, and in the county records system. The 13 county treasurer shall on the same day deliver the certificate 14 of title, if applicable, to the then first secured party or, 15 if there is no such person, to the person as directed by the 16 owner, in writing, on a form prescribed by the department or, 17 if there is no person designated, then to the owner. The 18 cancellation of the security interest shall be noted on the 19 certificate of title by the county treasurer without charge. 20 The holder of a security interest discharged by payment who 21 fails to release the security interest within fifteen days 22 after being requested in writing to do so shall forfeit to the 23 person making the payment the sum of twenty-five five hundred 24 dollars. 25 Sec. 2. Section 321.70, Code 2015, is amended to read as 26 follows: 27 321.70 Dealer vehicles. 28 A dealer registered under this chapter shall not be required 29 to register any vehicle owned by the dealer which is being held 30 for sale or trade, provided the annual registration fee was not 31 delinquent at the time the vehicle was acquired by the dealer. 32 When a dealer ceases to hold any vehicle for sale or trade or 33 the vehicle otherwise becomes subject to registration under 34 this chapter , the annual registration fee and delinquent annual 35 -1- LSB 2384SC (2) 86 ns/nh 1/ 3

S.F. _____ registration fee, if any, shall be due for the registration 1 year. However, a dealer is not required to pay a delinquent 2 annual registration fee, or a penalty on a delinquent annual 3 registration fee, due on a vehicle acquired by the dealer 4 through a wholesale auction that is accompanied by an affidavit 5 stating that the vehicle was repossessed because of the failure 6 of the previous owner to meet a legal obligation involving the 7 vehicle. 8 Sec. 3. Section 321.105A, subsection 5, Code 2015, is 9 amended by adding the following new paragraph: 10 NEW PARAGRAPH . 0a. A licensed vehicle dealer maintaining a 11 place of business in this state who sells a vehicle subject to 12 registration for use in this state shall collect the fee for 13 new registration, and the fee for listed security interests 14 pursuant to section 321.50, subsection 1, at the time of making 15 the sale. A dealer required to collect the fees shall give to 16 the purchaser a receipt for the fees in the manner and form 17 prescribed by the director. Fees collected by a dealer under 18 this paragraph “0a” shall be forwarded to the county treasurer, 19 along with the application for certificate of title, where 20 applicable. 21 Sec. 4. Section 805.8A, subsection 2, paragraph s, Code 22 2015, is amended to read as follows: 23 s. Section 321.104 . . . . . . . . . . . . . . . . . . . . $100 $500 . 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill relates to registration fees for, and security 28 interests on, motor vehicles. 29 Under current law, the holder of a security interest on 30 a motor vehicle discharged by payment who fails to release 31 the security interest within 15 days after being requested in 32 writing to do so must forfeit $25 to the person making the 33 payment. The bill increases the amount of the payment to $500. 34 Current law provides that a dealer shall not be required to 35 -2- LSB 2384SC (2) 86 ns/nh 2/ 3

S.F. _____ register any vehicle owned by the dealer which is being held 1 for sale or trade, provided the annual registration fee was 2 not delinquent at the time the vehicle was acquired by the 3 dealer. When a dealer ceases to hold any vehicle for sale or 4 trade or the vehicle otherwise becomes subject to registration, 5 the annual registration fee and delinquent annual registration 6 fee, if any, shall be due for the registration year. The bill 7 provides that a dealer is not required to pay a delinquent 8 annual registration fee, or a penalty on a delinquent annual 9 registration fee, due on a vehicle acquired by the dealer 10 through a wholesale auction that is accompanied by an affidavit 11 stating that the vehicle was repossessed because of the failure 12 of the previous owner to meet a legal obligation involving the 13 vehicle. 14 The bill requires motor vehicle dealers who sell a vehicle 15 subject to registration for use in Iowa to collect the fee for 16 new registration and the fee for listed security interests at 17 the time of making the sale. A dealer required to collect the 18 fees shall give to the purchaser a receipt for the fees in the 19 manner and form prescribed by the director of transportation. 20 Fees collected by a dealer in this way shall be forwarded 21 to the county treasurer, along with the application for 22 certificate of title, where applicable. 23 Current law provides that a person shall not sell, offer 24 for sale, or transfer a motor vehicle without obtaining a 25 certificate of title in the name of the seller or transferor 26 or delivering to the purchaser or transferee a certificate 27 of title or a manufacturer’s or importer’s certificate duly 28 assigned to the purchaser or transferee. The scheduled fine 29 for a violation of this provision is $100. The bill increases 30 the scheduled fine to $500. 31 -3- LSB 2384SC (2) 86 ns/nh 3/ 3