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53 | 53 | | STATE OF OKLAHOMA |
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54 | 54 | | |
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55 | 55 | | 1st Session of the 60th Legislature (2025) |
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56 | 56 | | |
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57 | 57 | | SENATE BILL 565 By: Hall |
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58 | 58 | | |
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59 | 59 | | |
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60 | 60 | | |
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61 | 61 | | |
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62 | 62 | | |
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63 | 63 | | AS INTRODUCED |
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64 | 64 | | |
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65 | 65 | | An Act relating to the Oklahoma Vehicle License and |
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66 | 66 | | Registration Act; amending 47 O.S. 2021, Section |
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67 | 67 | | 1110, as last amended by Section 1, Ch apter 323, |
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68 | 68 | | O.S.L. 2024 (47 O.S. Supp. 2024, Section 1110), which |
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69 | 69 | | relates to security interests; modifying provisions |
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70 | 70 | | related to certain transfer of title; modifying |
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71 | 71 | | provisions related to mailing of certain release; and |
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72 | 72 | | providing an effective date . |
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73 | 73 | | |
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74 | 74 | | |
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75 | 75 | | |
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76 | 76 | | |
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77 | 77 | | BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: |
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78 | 78 | | SECTION 1. AMENDATORY 47 O.S. 2021, Section 1110, as |
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79 | 79 | | last amended by Section 1, Chapter 323, O.S.L. 2024 (47 O.S. Supp. |
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80 | 80 | | 2024, Section 1110), is amended to read as follows: |
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81 | 81 | | Section 1110. A. 1. Except for a security interest in |
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82 | 82 | | vehicles held by a dealer for sale or lease, a vehicle registered by |
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83 | 83 | | a federally recognized Indian tribe as provided in subsection G of |
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84 | 84 | | this section, and a vehicle being registered in this state whic h was |
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85 | 85 | | previously registered in another state and which title contains the |
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86 | 86 | | name of a secured party on the face of the other state certificate |
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87 | 87 | | or title, and except as otherwise provided in subsection B of |
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88 | 88 | | Section 1105 of this title, a security interest in a vehicle as to |
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139 | 139 | | |
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140 | 140 | | which a certificate of title may be properly issued by the Oklahoma |
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141 | 141 | | Tax Commission shall be perfected only when a lien entry form, and |
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142 | 142 | | the existing certificate of title, if any, or application for a |
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143 | 143 | | certificate of title and manufacturer ’s certificate of origin |
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144 | 144 | | containing the name and address of the secured party and th e date of |
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145 | 145 | | the security agreement and the required fee are delivered to the Tax |
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146 | 146 | | Commission or to a motor license agent. As used in this section, |
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147 | 147 | | the term “dealer” shall be defined as provided in Section 1 -112 of |
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148 | 148 | | this title and the term “security interest” shall be defined as |
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149 | 149 | | provided in paragraph (35) of Section 1 -201 of Title 12A of the |
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150 | 150 | | Oklahoma Statutes. When a vehicle title is presented to a motor |
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151 | 151 | | license agent for transferrin g or registering and the documents |
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152 | 152 | | reflect a lienholder, the motor license age nt shall perfect the lien |
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153 | 153 | | pursuant to subsection G of Section 1105 of this title. For the |
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154 | 154 | | purposes of this section, the term “vehicle” shall not include |
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155 | 155 | | special mobilized machin ery, machinery used in highway construction |
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156 | 156 | | or road material construction, and rubber -tired road construction |
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157 | 157 | | vehicles including rubber -tired cranes. The filing and duration of |
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158 | 158 | | perfection of a security interest, pursuant to the provisions of |
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159 | 159 | | Title 12A of the Oklahoma Statutes including, but not limited to, |
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160 | 160 | | Section 1-9-311 of Title 12A of the Oklahoma Statutes, shall not be |
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161 | 161 | | applicable to perfection of security interests in vehicles as to |
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162 | 162 | | which a certificate of title may be properly issued by the Tax |
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163 | 163 | | Commission, except as to vehicles held by a dealer for sale or lease |
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164 | 164 | | |
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214 | 214 | | |
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215 | 215 | | and except as provided in subsection D of this section. In all |
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216 | 216 | | other respects Title 12A of the Oklahoma Statutes shall be |
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217 | 217 | | applicable to such security interests in vehicles as to which a |
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218 | 218 | | certificate of title may be properly issued by the Tax Commission. |
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219 | 219 | | 2. Whenever a person creates a security interest in a vehicle, |
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220 | 220 | | the person shall surrender to the secured party the certificate of |
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221 | 221 | | title or the signed application for a new certificate of title, o n |
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222 | 222 | | the form prescribed by the Tax Commission, and the manufacturer ’s |
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223 | 223 | | certificate of origin. The secured party shall deliver the lien |
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224 | 224 | | entry form and the required lien filing fee within twenty -five (25) |
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225 | 225 | | days as provided hereafter with certificate of title or the |
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226 | 226 | | application for certificate of title and the manufacturer ’s |
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227 | 227 | | certificate of origin to the Tax Commission or to a motor license |
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228 | 228 | | agent. If the lien entry form, the lien filing fee and the |
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229 | 229 | | certificate of title or application for certificate of title and the |
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230 | 230 | | manufacturer’s certificate of origin are delivered to the Tax |
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231 | 231 | | Commission or to a motor license agent within twenty -five (25) days |
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232 | 232 | | after the date of the lien entry form, perfection of the security |
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233 | 233 | | interest shall begin from the date of the execution of t he lien |
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234 | 234 | | entry form, but otherwise, perfection of the security interest shall |
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235 | 235 | | begin from the date of the delivery to the Tax Commission or to a |
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236 | 236 | | motor license agent. |
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237 | 237 | | 3. a. For each security interest recorded on a certificate |
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238 | 238 | | of title, or manufacturer ’s certificate of origin, |
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239 | 239 | | |
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240 | 240 | | |
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289 | 289 | | |
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290 | 290 | | such person shall pay a fee of Ten Dollars ($10.00), |
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291 | 291 | | which shall be in addition to other fees provided for |
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292 | 292 | | in the Oklahoma Vehicle License and Registration Act. |
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293 | 293 | | Upon the receipt of the lien entry form and the |
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294 | 294 | | required fees with either th e certificate of title or |
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295 | 295 | | an application for certificate of title and |
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296 | 296 | | manufacturer’s certificate of origin, a motor license |
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297 | 297 | | agent shall, by placement of a clearly distinguishing |
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298 | 298 | | mark, record the date and number shown in a |
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299 | 299 | | conspicuous place, on each of thes e instruments. Of |
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300 | 300 | | the ten-dollar fee, the motor license agent shall |
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301 | 301 | | retain Two Dollars ($2.00) for recording the security |
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302 | 302 | | interest lien. |
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303 | 303 | | b. It shall be unlawful for any person to solicit, |
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304 | 304 | | accept, or receive any gratuity or compensation for |
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305 | 305 | | acting as a messenger and for acting as the agent or |
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306 | 306 | | representative of another person in appl ying for the |
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307 | 307 | | recording of a security interest or for the |
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308 | 308 | | registration of a motor vehicle and obtaining the |
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309 | 309 | | license plates or for the issuance of a certificate of |
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310 | 310 | | title therefor unless the Tax Commission has appointed |
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311 | 311 | | and approved the person to perform such acts; and |
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312 | 312 | | before acting as a messenger, any such person shall |
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313 | 313 | | furnish to the Tax Commission a surety bond in such |
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364 | 364 | | |
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365 | 365 | | amount as the Tax Commission shall determine |
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366 | 366 | | appropriate. |
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367 | 367 | | 4. The certificate of title or the application for certificate |
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368 | 368 | | of title and manufacturer’s certificate of origin with the record of |
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369 | 369 | | the date of receipt clearly marked thereon shall be returned to the |
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370 | 370 | | debtor together with a notice that the debtor is required to |
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371 | 371 | | register and pay all additional fees and taxes due within thirty |
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372 | 372 | | (30) days from the date of purchase of the vehicle. |
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373 | 373 | | 5. Any person creating a security interest in a vehicle that |
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374 | 374 | | has been previously registered in the debtor ’s name and on which all |
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375 | 375 | | taxes due the state have been paid shall surrender the certificate |
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376 | 376 | | of ownership to the secured party. The secured party shall have the |
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377 | 377 | | duty to record the security interest as provided in this section and |
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378 | 378 | | shall, at the same time, obtain a new certificate of title which |
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379 | 379 | | shall show the secured interest on the face of the certificate of |
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380 | 380 | | title. |
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381 | 381 | | 6. The lien entry form with the date and assigned number |
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382 | 382 | | thereof clearly marked thereon shall be returned to the secured |
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383 | 383 | | party. If the lien entry form is received and authent icated, as |
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384 | 384 | | herein provided, by a motor license agent, the agent shall make a |
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385 | 385 | | report thereof to the Tax Commission upon the forms and in the |
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386 | 386 | | manner as may be prescribed by the Tax Commission. |
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387 | 387 | | |
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438 | 438 | | 7. The Tax Commission shall have the duty to record the lien |
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439 | 439 | | upon the face of the certificate of title issued at the time of |
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440 | 440 | | registering and paying all fees and taxes due on the vehicle. |
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441 | 441 | | 8. When there is an active lien from a commercial lender in |
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442 | 442 | | place on a vehicle, motor license agents shall be prohibited from |
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443 | 443 | | transferring the certificate of title on that vehicle until the lien |
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444 | 444 | | is satisfied, except when the title is transferred: |
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445 | 445 | | a. to a person whose name is included on the loan for |
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446 | 446 | | which the lien is placed pursuant to an agreement by |
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447 | 447 | | the lender and any party to the ti tle, |
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448 | 448 | | b. to a trust created by a person whose name is included |
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449 | 449 | | on the loan for which the lien is placed, or |
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450 | 450 | | c. from a person who has died, upon the submission of a |
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451 | 451 | | death certificate, or |
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452 | 452 | | d. upon attestation by the managing member indicating |
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453 | 453 | | ownership, to a business entity from a person who owns |
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454 | 454 | | at least fifty percent (50%) of the busi ness entity |
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455 | 455 | | receiving title. As part of such transfer, the |
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456 | 456 | | business entity receiving title and at the discretion |
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457 | 457 | | of the financial institution holding the lien, the |
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458 | 458 | | individual transferring title and the receiving |
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459 | 459 | | business entity may be added as an obligor to the |
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460 | 460 | | original note secured by the collateral to which the |
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461 | 461 | | transferring individual is a borrower. This shall not |
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512 | 512 | | |
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513 | 513 | | be construed to require refinancing of the original |
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514 | 514 | | note. Service Oklahoma shall provide notification of |
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515 | 515 | | the transaction to the lienholder, ninety (90) days |
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516 | 516 | | prior to effectuating the title transfer and shall |
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517 | 517 | | develop an appropriate affidavit and notice necessary |
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518 | 518 | | to effectuate a transfer of title. A title transfer |
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519 | 519 | | initiated pursuant to this subparagraph shall not |
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520 | 520 | | preclude the lienholder from exercising all remedies |
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521 | 521 | | available to it in accordance with an agreement |
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522 | 522 | | between the lienholder and the individual transferring |
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523 | 523 | | title, up to and including repossession of the vehicl e |
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524 | 524 | | and civil action against the individual transferring |
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525 | 525 | | title and receiving bus iness entity. Further, until |
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526 | 526 | | the original lien is satisfied, the receiving business |
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527 | 527 | | entity shall be prohibited from transferring title to |
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528 | 528 | | another entity or person. Types of bus iness entities |
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529 | 529 | | that may receive a transfer of title pursuant to this |
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530 | 530 | | subparagraph shall be limited to: |
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531 | 531 | | (1) sole proprietorships, |
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532 | 532 | | (2) general partnerships, |
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533 | 533 | | (3) limited partnerships, |
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534 | 534 | | (4) limited liability companies, |
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535 | 535 | | (5) professional limited partnerships, and |
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536 | 536 | | (6) professional limited liability companies . |
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537 | 537 | | |
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538 | 538 | | |
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587 | 587 | | |
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588 | 588 | | No individual may perform a tra nsfer, pursuant to this |
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589 | 589 | | subparagraph, to any business entity that is currently |
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590 | 590 | | engaging in any activity which is prohibited by federal or |
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591 | 591 | | state law. |
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592 | 592 | | The provisions of this paragr aph shall not be construed to release |
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593 | 593 | | any lien or debt based solely upon a transfer of certificate of |
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594 | 594 | | title. |
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595 | 595 | | B. 1. A secured party shall, within seven (7) business days |
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596 | 596 | | after the satisfaction of the security interest, furnish directly or |
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597 | 597 | | by mail a release of a security interest to the Tax Commission and |
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598 | 598 | | mail a copy thereof to the last-known address of the debtor. If the |
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599 | 599 | | security interest has been satisfied by payment from a licensed used |
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600 | 600 | | motor vehicle dealer to whom the motor vehicle has been transferred , |
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601 | 601 | | the secured party shall also, within seven (7) business days after |
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602 | 602 | | such satisfaction receipt of a written request from such licensed |
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603 | 603 | | used motor vehicle dealer , mail an additional copy of the release to |
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604 | 604 | | the dealer. If the secured party fails to furnish t he release as |
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605 | 605 | | required, the secured party shall be liable to the debtor for a |
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606 | 606 | | penalty of One Hundred Dollars ($100.00). Following the seven (7) |
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607 | 607 | | business days after satisfaction of the lien and upon receipt by the |
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608 | 608 | | lienholder of written communication demand ing the release of the |
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609 | 609 | | lien, thereafter the penalty shall increase to One Hundred Dollars |
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610 | 610 | | ($100.00) per day for each additional day beyond seven (7) business |
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611 | 611 | | days until accumulating to One Thousand Five Hundred Dollars |
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662 | 662 | | |
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663 | 663 | | ($1,500.00) or the value of the vehic le, whichever is less, and, in |
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664 | 664 | | addition, any loss caused to the debtor by such failure. |
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665 | 665 | | 2. Upon release of a security interest the owner may obtain a |
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666 | 666 | | new certificate of title omitting reference to the security |
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667 | 667 | | interest, by submitting to the Tax Commission or to a motor license |
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668 | 668 | | agent: |
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669 | 669 | | a. a release signed by the secured party, an application |
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670 | 670 | | for new certificate of title and the proper fees, or |
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671 | 671 | | b. by submitting to the Tax Commission or the motor |
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672 | 672 | | license agent an affidavit, supported by such |
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673 | 673 | | documentation as the Tax Commission may require, by |
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674 | 674 | | the owner on a form prescribed by the Tax Co mmission |
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675 | 675 | | stating that the security interest has been satisfied |
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676 | 676 | | and stating the reasons why a release cannot be |
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677 | 677 | | obtained, an application for a new certificate of |
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678 | 678 | | title and the proper fees. |
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679 | 679 | | Upon receiving such affidavit that the security interest has been |
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680 | 680 | | satisfied, the Tax Commission shall issue a new certificate of title |
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681 | 681 | | eliminating the satisfied security interest and the name and address |
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682 | 682 | | of the secured parties who have been paid and satisfied. The Tax |
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683 | 683 | | Commission shall accept a release of a security intere st in any form |
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684 | 684 | | that identifies the debtor, the secured party, and the vehicle, and |
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685 | 685 | | contains the signature of the secured party. The Tax Commission |
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736 | 736 | | |
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737 | 737 | | shall not require any particul ar form for the release of a security |
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738 | 738 | | interest. |
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739 | 739 | | The words “security interest” when used in the Oklahoma Vehicle |
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740 | 740 | | License and Registration Act do not include liens dependent upon |
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741 | 741 | | possession. |
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742 | 742 | | C. The Tax Commission shall file and index certificates of |
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743 | 743 | | title so that at all times it will be possible to trace a |
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744 | 744 | | certificate of title to the vehicle designated therein, identify the |
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745 | 745 | | lien entry form, and the names and addresses of secured parties, or |
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746 | 746 | | their assignees, so that all or any part of such information may be |
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747 | 747 | | made readily available to those who make legitimate inquiry of the |
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748 | 748 | | Tax Commission as to the existence or nonexistence of security |
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749 | 749 | | interest in the vehicle. |
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750 | 750 | | D. 1. Any security interest in a vehicle properly perfected |
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751 | 751 | | prior to July 1, 1979, may be continued as to its effectiveness or |
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752 | 752 | | duration as provided by Sections 1 -9-510 and 1-9-515 of Title 12A of |
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753 | 753 | | the Oklahoma Statutes, or may be terminated, assigned or released as |
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754 | 754 | | provided by Sections 1 -9-512, 1-9-513 and 1-9-514 of Title 12A of |
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755 | 755 | | the Oklahoma Statutes, a s fully as if this section had not been |
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756 | 756 | | enacted, or, at the option of the secured party, may also be |
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757 | 757 | | perfected under this section, and, if so perfected, the time of |
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758 | 758 | | perfection under this section shall be the date the security |
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759 | 759 | | interest was originally perfec ted under the prior law. |
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760 | 760 | | |
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761 | 761 | | |
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811 | 811 | | 2. Upon request of the secured party, the debtor, or any other |
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812 | 812 | | holder of the certificate of title shall surrender the certificate |
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813 | 813 | | of title to the secured party and shall do such other acts as may be |
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814 | 814 | | required to perfect the securit y interest under this section. |
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815 | 815 | | E. If a manufactured home is permanently affixed to real |
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816 | 816 | | estate, an Oklahoma certificate of title may be surrendered to the |
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817 | 817 | | Tax Commission or a motor license agent for cancellation. When the |
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818 | 818 | | document of title is surrendered , the owner shall provide the legal |
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819 | 819 | | description or the appropriate tract or pa rcel number of the real |
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820 | 820 | | estate and other information as may be required on a form provided |
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821 | 821 | | by the Tax Commission. The Tax Commission may not cancel a document |
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822 | 822 | | of title if a lien has been registered or recorded. The Tax |
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823 | 823 | | Commission or motor license agent shall notify the owner and any |
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824 | 824 | | lienholder that the title has been surrendered to the Tax Commission |
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825 | 825 | | and that the Tax Commission may not cancel the title until the lien |
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826 | 826 | | is released. Such notification shall include a description of the |
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827 | 827 | | lien and such notifica tion to the owner shall be accompanied by the |
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828 | 828 | | return of title surrendered. Permanent attachment to real estate |
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829 | 829 | | does not affect the validity of a lien recorded or registered with |
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830 | 830 | | the Tax Commission before the document of title is canceled pursuant |
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831 | 831 | | to this section. The rights of a prior lienholder pursuant to a |
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832 | 832 | | security agreement or the provisions of a credit transaction and the |
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833 | 833 | | rights of the state pursuant to a tax lien are prese rved. The Tax |
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834 | 834 | | Commission or motor license agent shall forward the information to |
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836 | 836 | | |
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837 | 837 | | Req. No. 1187 Page 12 1 |
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885 | 885 | | |
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886 | 886 | | the county assessor of the county where the real estate is located |
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887 | 887 | | and indicate whether the original document of title has been |
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888 | 888 | | canceled. A fee of Five Dollars ($5.00) shall accompany the |
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889 | 889 | | application for cancellation of title. When the fee is paid by a |
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890 | 890 | | person making an application directly with the Tax Commission, the |
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891 | 891 | | fee shall be deposited in the Oklahoma Tax Commission Revolving |
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892 | 892 | | Fund. A fee paid to a motor license agent s hall be retained by the |
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893 | 893 | | agent. The owner of a manufactured home upon which th e document of |
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894 | 894 | | title has been properly surrendered, may apply to the Tax Commission |
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895 | 895 | | for issuance of a new original certificate of title upon submission |
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896 | 896 | | of: |
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897 | 897 | | 1. An attestation from the homeowner indicating ownership of |
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898 | 898 | | the manufactured home and the nonexistence of any security interest |
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899 | 899 | | or lien of record in the manufactured home; and |
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900 | 900 | | 2. A title opinion by a licensed attorney, determining that the |
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901 | 901 | | owner of the manufactured home has m arketable title to the real |
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902 | 902 | | property upon which the manufactured home is locat ed and that no |
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903 | 903 | | documents filed of record in the county clerk ’s office concerning |
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904 | 904 | | the real property contain a mortgage, recorded financial statement, |
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905 | 905 | | judgment, or lien of record. Persons or entities to whom the title |
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906 | 906 | | opinion is addressed may rely on the title opinion . A security |
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907 | 907 | | interest in a manufactured home perfected pursuant to this section |
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908 | 908 | | shall have priority over a conflicting interest of a mortgagee or |
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909 | 909 | | other lien encumbran cer, or the owner of the real property upon |
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910 | 910 | | |
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911 | 911 | | |
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961 | 961 | | which the manufactured home became affixed or otherwise permanently |
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962 | 962 | | attached. The holder of the security interest in the manufactured |
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963 | 963 | | home, upon default, may remove the manufactured home from such real |
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964 | 964 | | property. The holder of the security interest in the manufactured |
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965 | 965 | | home shall reimburse the owner of the real property who is not the |
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966 | 966 | | debtor and who has not otherwise agreed to access the real property |
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967 | 967 | | for the cost of repair of any physical injury to the real prope rty, |
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968 | 968 | | but shall not be liable for any diminution in value to the real |
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969 | 969 | | property caused by the removal of the manufactured home, trespass, |
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970 | 970 | | or any other damages caused by the removal. The debtor shall notify |
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971 | 971 | | the holder of the security interest in the manufact ured home of the |
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972 | 972 | | street address, if any, and the legal description of the real |
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973 | 973 | | property upon which the manufactured home is affixed or otherwise |
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974 | 974 | | permanently attached and shall sign such other documents, including |
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975 | 975 | | any appropriate mortgage, as may reasonably be requested by the |
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976 | 976 | | holder of such security interest. |
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977 | 977 | | F. In the case of moto r vehicles or trailers, notwithstanding |
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978 | 978 | | any other provision of law, a transaction does not create a sale or |
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979 | 979 | | security interest merely because it provides that the rental price |
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980 | 980 | | is permitted or required to be adjusted under the agreement either |
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981 | 981 | | upward or downward by reference to the amount realized upon sale or |
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982 | 982 | | other disposition of the motor vehicle or trailer. |
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983 | 983 | | G. A security interest in vehicles registered by a federally |
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984 | 984 | | recognized Indian tribe shall be deemed valid under Oklahoma law if |
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986 | 986 | | |
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1036 | 1036 | | validly perfected und er the applicable tribal law and the lien is |
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1037 | 1037 | | noted on the face of the tribal certificate of title. |
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1038 | 1038 | | SECTION 2. This act shall become effective November 1, 2025. |
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1039 | 1039 | | |
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1040 | 1040 | | 60-1-1187 CN 1/13/2025 5:31:09 PM |
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