Bill Summary for S 411 (2017-2018)

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Summary date: 

Jun 5 2018

Bill Information:

View NCGA Bill Details2017-2018 Session
Senate Bill 411 (Public) Filed Tuesday, March 28, 2017
AN ACT TO EXPAND THE REQUIRED USE OF THE ELECTRONIC LIEN SYSTEM IMPLEMENTED BY THE DIVISION OF MOTOR VEHICLES, TO REVISE THE LAW GOVERNING WHEN A MOTOR VEHICLE DEALER THAT DOES NOT HAVE A MOTOR VEHICLE'S STATEMENT OF ORIGIN OR CERTIFICATE OF TITLE MAY TRANSFER TITLE TO THE MOTOR VEHICLE, AND TO MAKE OTHER CHANGES TO LAWS AFFECTING MOTOR VEHICLE DEALERS.
Intro. by B. Jackson.

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Bill summary

House committee substitute makes the following changes to 2nd edition. Changes the long title. 

Amends GS 20-52.1(d) and GS 20-72(b), providing that when a motor vehicle's statement of origin or existing certificate of title is unavailable, a motor vehicle dealer may transfer the title by submitting to the Division of Motor Vehicles (Division) a sworn statement signed by the dealer principal or manager that to the best of the signatory's knowledge all prior liens on the vehicle that are reasonably ascertainable have been paid. Indemnifies the dealer owner or manager who is not a signatory from a criminal violation if that person did not have actual knowledge of the falsity of the sworn certification. Indemnifies the Division from legal action arising from such a sworn statement. 

Amends GS 20-58(b), indemnifying the dealer owner or manager who is not a signatory on a filed instrument creating a security interest in a motor vehicle from a criminal violation if that person did not have actual knowledge of the falsity of the sworn certification. Makes other clarifying changes. Allows filing a notarized copy of an instrument creating and evidencing a security interest when a manufacturer's statement of origin or an existing certificate of title was (1) not delivered to the dealer or (2) was lost or misplaced before the dealer sells or transfers the vehicle (was, only when the statement or title was unavailable).

Replaces proposed new section GS 20-72.1, governing transfer of ownership when a certificate of title is unavailable with the following. Requires the dealer to deliver the manufacturer's statement of origin or certificate of title to the Division within 20 days of receipt of the title, but no later than 60 days following the sale or transfer of the vehicle or the creation of a security interest. Requires dealer to provide notice to purchaser that purchaser may be entitled to liquidated damages if the dealer fails to deliver the manufacturer's statement of origin or certificate of title to the Division in accordance with this subsection. If the vehicle is a used motor vehicle, the dealer must apply to the Division for a duplicate title within five working days of the date of sale or transfer. If the vehicle is new, the dealer must request a new statement of origin from the applicable manufacturer within five working days of the date of sale or transfer. If the dealer fails to deliver the statement of origin or title within 60 days, the purchaser may seek liquidated damages from the dealer, without having to rescind the purchase. 

Amends GS 20-79.1(h), defining the circumstances when a vehicle's statement of origin or title is unavailable for the purposes of temporary license plates, being when it was not delivered to the dealer or when they were lost or misplaced. 

Directs the Division, in consultation with the North Carolina Automobile Dealers Association, Inc., to study the impact of the above amendments on Division process and procedures, along with recommended statutory changes and methods to ensure consumer protection in the motor vehicle transfer process. Findings are to be reported by December 31, 2020. This section effective when it becomes law. The above sections effective January 1, 2019. 

Amends GS 20-79.02(g), extending the amount of time when dealers are required to display LD license plates on service loaner vehicles to January 1, 2021 (was, 2019). 

Extends SL 2015-232, Sections 1.4(b) and 1.1(b), concerning franchised motor vehicle dealer vehicles, to December 31, 2020. 

Amends GS 20-79.1(d), requiring a dealer to mail the application and fees for temporary license plates to the Division within 20 days of issuance of the temporary plate (was, 10 working days). No longer requires a contract for sale to be rescinded in writing before delivery of the application and fee is no longer necessary.

Amends GS 20-183.4C, requiring a new vehicle to be inspected before it is delivered to a purchaser at retail in the state (currently, requires inspection before it is sold at retail in the state).

Amends GS 105-562 and GS 105-570, limiting the application of any tax or tax increase levied under Article 51 (Regional Transit Authority Registration Tax) or Article 52 (County Vehicle Registration Tax) to motor vehicles sold or leased by a motor vehicle dealer on or after the effective date of the tax or tax increase, regardless of the date of submission of a title or registration application for the vehicle to the Division. Exempts a motor vehicle sale or lease from a tax or tax increase levied under Article 51 or 52 if the sale or lease was made prior to the effective date of the tax or tax increase. Applies to any tax or tax increase with an effective date on or after the date the act becomes law.

Amends GS 20-4.02, which requires the Division to adjust certain fees and rates quadrennially beginning July 1, 2020. Adds a new provision establishing that any adjustment to fees or rates under the statute applicable to a motor vehicle sold or leased by a motor vehicle dealer applies only to a sale or lease made on or after the effective date of the fee or rate adjustment, regardless of the date of submission of a title and registration application for the motor vehicle with the Division. Exempts motor vehicle sales or leases from adjustments to fees or rates under the statute if the sale or lease was made prior to the effective date of the fee or rate adjustment.