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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 565 By: Hall
AS INTRODUCED
An Act relating to the Oklahoma Vehicle License and
Registration Act; amending 47 O.S. 2021, Section
1110, as last amended by Section 1, Ch apter 323,
O.S.L. 2024 (47 O.S. Supp. 2024, Section 1110), which
relates to security interests; modifying provisions
related to certain transfer of title; modifying
provisions related to mailing of certain release; and
providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 47 O.S. 2021, Section 1110, as
last amended by Section 1, Chapter 323, O.S.L. 2024 (47 O.S. Supp.
2024, Section 1110), is amended to read as follows:
Section 1110. A. 1. Except for a security interest in
vehicles held by a dealer for sale or lease, a vehicle registered by
a federally recognized Indian tribe as provided in subsection G of
this section, and a vehicle being registered in this state whic h was
previously registered in another state and which title contains the
name of a secured party on the face of the other state certificate
or title, and except as otherwise provided in subsection B of
Section 1105 of this title, a security interest in a vehicle as to
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which a certificate of title may be properly issued by the Oklahoma
Tax Commission shall be perfected only when a lien entry form, and
the existing certificate of title, if any, or application for a
certificate of title and manufacturer ’s certificate of origin
containing the name and address of the secured party and th e date of
the security agreement and the required fee are delivered to the Tax
Commission or to a motor license agent. As used in this section,
the term “dealer” shall be defined as provided in Section 1 -112 of
this title and the term “security interest” shall be defined as
provided in paragraph (35) of Section 1 -201 of Title 12A of the
Oklahoma Statutes. When a vehicle title is presented to a motor
license agent for transferrin g or registering and the documents
reflect a lienholder, the motor license age nt shall perfect the lien
pursuant to subsection G of Section 1105 of this title. For the
purposes of this section, the term “vehicle” shall not include
special mobilized machin ery, machinery used in highway construction
or road material construction, and rubber -tired road construction
vehicles including rubber -tired cranes. The filing and duration of
perfection of a security interest, pursuant to the provisions of
Title 12A of the Oklahoma Statutes including, but not limited to,
Section 1-9-311 of Title 12A of the Oklahoma Statutes, shall not be
applicable to perfection of security interests in vehicles as to
which a certificate of title may be properly issued by the Tax
Commission, except as to vehicles held by a dealer for sale or lease
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and except as provided in subsection D of this section. In all
other respects Title 12A of the Oklahoma Statutes shall be
applicable to such security interests in vehicles as to which a
certificate of title may be properly issued by the Tax Commission.
2. Whenever a person creates a security interest in a vehicle,
the person shall surrender to the secured party the certificate of
title or the signed application for a new certificate of title, o n
the form prescribed by the Tax Commission, and the manufacturer ’s
certificate of origin. The secured party shall deliver the lien
entry form and the required lien filing fee within twenty -five (25)
days as provided hereafter with certificate of title or the
application for certificate of title and the manufacturer ’s
certificate of origin to the Tax Commission or to a motor license
agent. If the lien entry form, the lien filing fee and the
certificate of title or application for certificate of title and the
manufacturer’s certificate of origin are delivered to the Tax
Commission or to a motor license agent within twenty -five (25) days
after the date of the lien entry form, perfection of the security
interest shall begin from the date of the execution of t he lien
entry form, but otherwise, perfection of the security interest shall
begin from the date of the delivery to the Tax Commission or to a
motor license agent.
3. a. For each security interest recorded on a certificate
of title, or manufacturer ’s certificate of origin,
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such person shall pay a fee of Ten Dollars ($10.00),
which shall be in addition to other fees provided for
in the Oklahoma Vehicle License and Registration Act.
Upon the receipt of the lien entry form and the
required fees with either th e certificate of title or
an application for certificate of title and
manufacturer’s certificate of origin, a motor license
agent shall, by placement of a clearly distinguishing
mark, record the date and number shown in a
conspicuous place, on each of thes e instruments. Of
the ten-dollar fee, the motor license agent shall
retain Two Dollars ($2.00) for recording the security
interest lien.
b. It shall be unlawful for any person to solicit,
accept, or receive any gratuity or compensation for
acting as a messenger and for acting as the agent or
representative of another person in appl ying for the
recording of a security interest or for the
registration of a motor vehicle and obtaining the
license plates or for the issuance of a certificate of
title therefor unless the Tax Commission has appointed
and approved the person to perform such acts; and
before acting as a messenger, any such person shall
furnish to the Tax Commission a surety bond in such
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amount as the Tax Commission shall determine
appropriate.
4. The certificate of title or the application for certificate
of title and manufacturer’s certificate of origin with the record of
the date of receipt clearly marked thereon shall be returned to the
debtor together with a notice that the debtor is required to
register and pay all additional fees and taxes due within thirty
(30) days from the date of purchase of the vehicle.
5. Any person creating a security interest in a vehicle that
has been previously registered in the debtor ’s name and on which all
taxes due the state have been paid shall surrender the certificate
of ownership to the secured party. The secured party shall have the
duty to record the security interest as provided in this section and
shall, at the same time, obtain a new certificate of title which
shall show the secured interest on the face of the certificate of
title.
6. The lien entry form with the date and assigned number
thereof clearly marked thereon shall be returned to the secured
party. If the lien entry form is received and authent icated, as
herein provided, by a motor license agent, the agent shall make a
report thereof to the Tax Commission upon the forms and in the
manner as may be prescribed by the Tax Commission.
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7. The Tax Commission shall have the duty to record the lien
upon the face of the certificate of title issued at the time of
registering and paying all fees and taxes due on the vehicle.
8. When there is an active lien from a commercial lender in
place on a vehicle, motor license agents shall be prohibited from
transferring the certificate of title on that vehicle until the lien
is satisfied, except when the title is transferred:
a. to a person whose name is included on the loan for
which the lien is placed pursuant to an agreement by
the lender and any party to the ti tle,
b. to a trust created by a person whose name is included
on the loan for which the lien is placed, or
c. from a person who has died, upon the submission of a
death certificate, or
d. upon attestation by the managing member indicating
ownership, to a business entity from a person who owns
at least fifty percent (50%) of the busi ness entity
receiving title. As part of such transfer, the
business entity receiving title and at the discretion
of the financial institution holding the lien, the
individual transferring title and the receiving
business entity may be added as an obligor to the
original note secured by the collateral to which the
transferring individual is a borrower. This shall not
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be construed to require refinancing of the original
note. Service Oklahoma shall provide notification of
the transaction to the lienholder, ninety (90) days
prior to effectuating the title transfer and shall
develop an appropriate affidavit and notice necessary
to effectuate a transfer of title. A title transfer
initiated pursuant to this subparagraph shall not
preclude the lienholder from exercising all remedies
available to it in accordance with an agreement
between the lienholder and the individual transferring
title, up to and including repossession of the vehicl e
and civil action against the individual transferring
title and receiving bus iness entity. Further, until
the original lien is satisfied, the receiving business
entity shall be prohibited from transferring title to
another entity or person. Types of bus iness entities
that may receive a transfer of title pursuant to this
subparagraph shall be limited to:
(1) sole proprietorships,
(2) general partnerships,
(3) limited partnerships,
(4) limited liability companies,
(5) professional limited partnerships, and
(6) professional limited liability companies .
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No individual may perform a tra nsfer, pursuant to this
subparagraph, to any business entity that is currently
engaging in any activity which is prohibited by federal or
state law.
The provisions of this paragr aph shall not be construed to release
any lien or debt based solely upon a transfer of certificate of
title.
B. 1. A secured party shall, within seven (7) business days
after the satisfaction of the security interest, furnish directly or
by mail a release of a security interest to the Tax Commission and
mail a copy thereof to the last-known address of the debtor. If the
security interest has been satisfied by payment from a licensed used
motor vehicle dealer to whom the motor vehicle has been transferred ,
the secured party shall also, within seven (7) business days after
such satisfaction receipt of a written request from such licensed
used motor vehicle dealer , mail an additional copy of the release to
the dealer. If the secured party fails to furnish t he release as
required, the secured party shall be liable to the debtor for a
penalty of One Hundred Dollars ($100.00). Following the seven (7)
business days after satisfaction of the lien and upon receipt by the
lienholder of written communication demand ing the release of the
lien, thereafter the penalty shall increase to One Hundred Dollars
($100.00) per day for each additional day beyond seven (7) business
days until accumulating to One Thousand Five Hundred Dollars
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($1,500.00) or the value of the vehic le, whichever is less, and, in
addition, any loss caused to the debtor by such failure.
2. Upon release of a security interest the owner may obtain a
new certificate of title omitting reference to the security
interest, by submitting to the Tax Commission or to a motor license
agent:
a. a release signed by the secured party, an application
for new certificate of title and the proper fees, or
b. by submitting to the Tax Commission or the motor
license agent an affidavit, supported by such
documentation as the Tax Commission may require, by
the owner on a form prescribed by the Tax Co mmission
stating that the security interest has been satisfied
and stating the reasons why a release cannot be
obtained, an application for a new certificate of
title and the proper fees.
Upon receiving such affidavit that the security interest has been
satisfied, the Tax Commission shall issue a new certificate of title
eliminating the satisfied security interest and the name and address
of the secured parties who have been paid and satisfied. The Tax
Commission shall accept a release of a security intere st in any form
that identifies the debtor, the secured party, and the vehicle, and
contains the signature of the secured party. The Tax Commission
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shall not require any particul ar form for the release of a security
interest.
The words “security interest” when used in the Oklahoma Vehicle
License and Registration Act do not include liens dependent upon
possession.
C. The Tax Commission shall file and index certificates of
title so that at all times it will be possible to trace a
certificate of title to the vehicle designated therein, identify the
lien entry form, and the names and addresses of secured parties, or
their assignees, so that all or any part of such information may be
made readily available to those who make legitimate inquiry of the
Tax Commission as to the existence or nonexistence of security
interest in the vehicle.
D. 1. Any security interest in a vehicle properly perfected
prior to July 1, 1979, may be continued as to its effectiveness or
duration as provided by Sections 1 -9-510 and 1-9-515 of Title 12A of
the Oklahoma Statutes, or may be terminated, assigned or released as
provided by Sections 1 -9-512, 1-9-513 and 1-9-514 of Title 12A of
the Oklahoma Statutes, a s fully as if this section had not been
enacted, or, at the option of the secured party, may also be
perfected under this section, and, if so perfected, the time of
perfection under this section shall be the date the security
interest was originally perfec ted under the prior law.
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2. Upon request of the secured party, the debtor, or any other
holder of the certificate of title shall surrender the certificate
of title to the secured party and shall do such other acts as may be
required to perfect the securit y interest under this section.
E. If a manufactured home is permanently affixed to real
estate, an Oklahoma certificate of title may be surrendered to the
Tax Commission or a motor license agent for cancellation. When the
document of title is surrendered , the owner shall provide the legal
description or the appropriate tract or pa rcel number of the real
estate and other information as may be required on a form provided
by the Tax Commission. The Tax Commission may not cancel a document
of title if a lien has been registered or recorded. The Tax
Commission or motor license agent shall notify the owner and any
lienholder that the title has been surrendered to the Tax Commission
and that the Tax Commission may not cancel the title until the lien
is released. Such notification shall include a description of the
lien and such notifica tion to the owner shall be accompanied by the
return of title surrendered. Permanent attachment to real estate
does not affect the validity of a lien recorded or registered with
the Tax Commission before the document of title is canceled pursuant
to this section. The rights of a prior lienholder pursuant to a
security agreement or the provisions of a credit transaction and the
rights of the state pursuant to a tax lien are prese rved. The Tax
Commission or motor license agent shall forward the information to
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the county assessor of the county where the real estate is located
and indicate whether the original document of title has been
canceled. A fee of Five Dollars ($5.00) shall accompany the
application for cancellation of title. When the fee is paid by a
person making an application directly with the Tax Commission, the
fee shall be deposited in the Oklahoma Tax Commission Revolving
Fund. A fee paid to a motor license agent s hall be retained by the
agent. The owner of a manufactured home upon which th e document of
title has been properly surrendered, may apply to the Tax Commission
for issuance of a new original certificate of title upon submission
of:
1. An attestation from the homeowner indicating ownership of
the manufactured home and the nonexistence of any security interest
or lien of record in the manufactured home; and
2. A title opinion by a licensed attorney, determining that the
owner of the manufactured home has m arketable title to the real
property upon which the manufactured home is locat ed and that no
documents filed of record in the county clerk ’s office concerning
the real property contain a mortgage, recorded financial statement,
judgment, or lien of record. Persons or entities to whom the title
opinion is addressed may rely on the title opinion . A security
interest in a manufactured home perfected pursuant to this section
shall have priority over a conflicting interest of a mortgagee or
other lien encumbran cer, or the owner of the real property upon
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which the manufactured home became affixed or otherwise permanently
attached. The holder of the security interest in the manufactured
home, upon default, may remove the manufactured home from such real
property. The holder of the security interest in the manufactured
home shall reimburse the owner of the real property who is not the
debtor and who has not otherwise agreed to access the real property
for the cost of repair of any physical injury to the real prope rty,
but shall not be liable for any diminution in value to the real
property caused by the removal of the manufactured home, trespass,
or any other damages caused by the removal. The debtor shall notify
the holder of the security interest in the manufact ured home of the
street address, if any, and the legal description of the real
property upon which the manufactured home is affixed or otherwise
permanently attached and shall sign such other documents, including
any appropriate mortgage, as may reasonably be requested by the
holder of such security interest.
F. In the case of moto r vehicles or trailers, notwithstanding
any other provision of law, a transaction does not create a sale or
security interest merely because it provides that the rental price
is permitted or required to be adjusted under the agreement either
upward or downward by reference to the amount realized upon sale or
other disposition of the motor vehicle or trailer.
G. A security interest in vehicles registered by a federally
recognized Indian tribe shall be deemed valid under Oklahoma law if
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validly perfected und er the applicable tribal law and the lien is
noted on the face of the tribal certificate of title.
SECTION 2. This act shall become effective November 1, 2025.
60-1-1187 CN 1/13/2025 5:31:09 PM