HF 2437 (LSB 1984HV (3) 87)

HOUSE FILE 2437

BY  COMMITTEE ON LOCAL GOVERNMENT

(SUCCESSOR TO HSB 56)

(COMPANION TO LSB 1984SV BY COMMITTEE ON TRANSPORTATION)

A BILL FOR

An Act relating to the notation of discharges of motor vehicle security interests.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.50, subsection 5, paragraph a, Code 2018, is amended to read as follows:
   a.  When a security interest is discharged, the holder shall note a cancellation of the security interest on the face of the certificate of title over the holder’s signature and or may note the cancellation of the security interest on a separate, notarized release form or letter. The holder shall deliver the certificate of title and the form or letter, if applicable, to the county treasurer where the title was issued. In the case of a security interest that has been delivered by electronic means, the holder shall notify the department or the county treasurer, in a manner prescribed by the department, of the release of the security interest. The county treasurer shall immediately note the cancellation of the security interest on the face of the certificate of title, if applicable, and in the county records system. The county treasurer shall on the same day deliver the certificate of title, if applicable, and the separate, notarized release form or letter, if applicable, to the then first secured party or, if there is no such person, to the person as directed by the owner, in writing, on a form prescribed by the department or, if there is no person designated, then to the owner. The cancellation of the security interest shall be noted on the certificate of title by the county treasurer without charge. The holder of a security interest discharged by payment who fails to release the security interest within fifteen days after being requested in writing to do so shall forfeit to the person making the payment the sum of twenty-five dollars.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Current law provides that when a security interest on a motor vehicle is discharged, other than a security interest that has been delivered by electronic means, the holder is required to note the cancellation of the security interest on the face of the vehicle’s certificate of title over the holder’s signature and deliver the certificate of title to the county treasurer where the title was issued.
   This bill permits the holder of the security interest to instead note the cancellation of the security interest on a separate, notarized release form or letter and deliver the form or letter along with the certificate of title to the county treasurer where the title was issued. The county treasurer must then deliver the certificate of title and the form or letter to the first secured party, the owner, or the owner’s designee, as applicable.