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AN ACT relating to motor vehicles; concerning the filing of notice of
  security interest; amending K.S.A. 1996 Supp. 8-135 and repealing the
  existing section.
Be it enacted by the Legislature of the State of Kansas:
  Section 1.  K.S.A. 1996 Supp. 8-135 is hereby amended to read as
follows: 8-135. (a) Upon the transfer of ownership of any vehicle regis-
tered under this act, the registration of the vehicle and the right to use
any license plate thereon shall expire and thereafter there shall be no
transfer of any registration, and the license plate shall be removed by the
owner thereof. It shall be unlawful for any person, other than the person
to whom the license plate was originally issued, to have possession
thereof. When the ownership of a registered vehicle is transferred, the
original owner of the license plate may register another vehicle under the
same number, upon application and payment of a fee of $1.50, if such
other vehicle does not require a higher license fee. If a higher license fee
is required, then the transfer may be made upon the payment of the
transfer fee of $1.50 and the difference between the fee originally paid
and that due for the new vehicle.
  (b)  Subject to the provisions of subsection (a) of K.S.A. 8-198, and
amendments thereto, upon the transfer and sale of any vehicle by any
person or dealer, the new owner thereof, within 30 days, inclusive of
weekends and holidays, from date of such transfer shall make application
to the division for registration of the vehicle, but no person shall operate
the vehicle on any highway in this state during the thirty-day period with-
out having applied for and obtained temporary registration from the
county treasurer or from a dealer. After the expiration of the thirty-day
period, it shall be unlawful for the owner or any other person to operate
such vehicle upon the highways of this state unless the vehicle has been
registered as provided in this act. For failure to make application for
registration as provided in this section, a penalty of $2 shall be added to
other fees. When a person has a current motorcycle or passenger vehicle
registration and license plate, including any registration decal affixed
thereto, for a vehicle and has sold or otherwise disposed of the vehicle
and has acquired another motorcycle or passenger vehicle and intends to
transfer the registration and the license plate to the motorcycle or pas-
senger vehicle acquired, but has not yet had the registration transferred
in the office of the county treasurer, such person may operate the mo-
torcycle or passenger vehicle acquired for a period of not to exceed 30
days by displaying the license plate on the rear of the vehicle acquired.
If the acquired vehicle is a new vehicle such person also must carry the
assigned certificate of title or manufacturer's statement of origin when
operating the acquired vehicle, except that a dealer may operate such
vehicle by displaying such dealer's dealer license plate.
  (c)  Certificate of title: No vehicle required to be registered shall be
registered or any license plate or registration decal issued therefor, unless
the applicant for registration shall present satisfactory evidence of own-
ership and apply for an original certificate of title for such vehicle. The
following paragraphs of this subsection shall apply to the issuance of a
certificate of title for a nonhighway vehicle, as defined in K.S.A. 8-197,
and amendments thereto, except to the extent such paragraphs are made
inapplicable by or are inconsistent with K.S.A. 8-198, and amendments
thereto.
  (1)  An application for certificate of title shall be made by the owner
or the owner's agent upon a form furnished by the division and shall state
all liens or encumbrances thereon, and such other information as the
division may require. Notwithstanding any other provision of this section,
no certificate of title, other than a duplicate title, shall be issued for a
vehicle having any unreleased lien or encumbrance thereon, unless the
transfer of such vehicle has been consented to in writing by the holder
of the lien or encumbrance. Such consent shall be in a form approved by
the division. In the case of members of the armed forces of the United
States while the United States is engaged at war with any foreign nation
and for a period of six months next following the cessation of hostilities,
such application may be signed by the owner's spouse, parents, brother
or sister. The county treasurer shall use reasonable diligence in ascer-
taining whether the facts stated in such application are true, and if sat-
isfied that the applicant is the lawful owner of such vehicle, or otherwise
entitled to have the same registered in such applicant's name, shall so
notify the division, who shall issue an appropriate certificate of title. The
certificate of title shall be in a form approved by the division, and shall
contain a statement of any liens or encumbrances which the application
shows, and such other information as the division determines.
  (2)  The certificate of title shall contain upon the reverse side a form
for assignment of title to be executed by the owner before a notary public
or some other officer authorized to administer an oath. This assignment
shall contain a statement of all liens or encumbrances on the vehicle at
the time of assignment. The certificate of title shall also contain on the
reverse side blank spaces so that an abstract of mileage as to each owner
will be available. The seller at the time of each sale shall insert the mileage
on the form filed for application or reassignment of title, and the division
shall insert such mileage on the certificate of title when issued to pur-
chaser or assignee. The signature of the purchaser or assignee is required
on the form filed for application or reassignment of title, acknowledging
the odometer certification made by the seller, except that vehicles which
are 10 model years or older and trucks with a gross vehicle weight of
more than 16,000 pounds shall be exempt from the mileage acknowledg-
ment requirement of the purchaser or assignee. Such title shall indicate
whether the vehicle for which it is issued has been titled previously as a
nonhighway vehicle. In addition, the reverse side shall contain two forms
for reassignment by a dealer, stating the liens or encumbrances thereon.
The first form of reassignment shall be used only when a dealer sells the
vehicle to another dealer. The second form of reassignment shall be used
by a dealer when selling the vehicle to another dealer or the ultimate
owner of the vehicle. The reassignment by a dealer shall be used only
where the dealer resells the vehicle, and during the time that the vehicle
remains in the dealer's possession for resale, the certificate of title shall
be dormant. When the ownership of any vehicle passes by operation of
law, or repossession upon default of a lease, security agreement, or ex-
ecutory sales contract, the person owning such vehicle, upon furnishing
satisfactory proof to the county treasurer of such ownership, may procure
a certificate of title to the vehicle. When a vehicle is registered in another
state and is repossessed in another state, the owner of such vehicle shall
not be entitled to obtain a valid Kansas title or registration, except that
when a vehicle is registered in another state, but is financed originally by
a financial institution chartered in the state of Kansas or when a financial
institution chartered in Kansas purchases a pool of motor vehicle loans
from the resolution trust corporation or a federal regulatory agency, and
the vehicle is repossessed in another state, such Kansas financial institu-
tion shall be entitled to obtain a valid Kansas title or registration.
  (3)  Dealers shall execute, upon delivery to the purchaser of every new
vehicle, a manufacturer's statement of origin stating the liens and encum-
brances thereon. Such statement of origin shall be delivered to the pur-
chaser at the time of delivery of the vehicle or at a time agreed upon by
the parties, not to exceed 30 days, inclusive of weekends and holidays.
The agreement of the parties shall be executed on a form approved by
the division. In the event delivery of title cannot be made personally, the
seller may deliver the manufacturer's statement of origin by restricted
mail to the address of purchaser shown on the purchase agreement. The
manufacturer's statement of origin may include an attachment containing
assignment of such statement of origin on forms approved by the division.
Upon the presentation to the division of a manufacturer's statement of
origin, by a manufacturer or dealer for a new vehicle, sold in this state, a
certificate of title shall be issued if there is also an application for regis-
tration, except that no application for registration shall be required for a
travel trailer used for living quarters and not operated on the highways.
  (4)  The fee for each original certificate of title shall be $7 until July
1, 1999, and $3.50 thereafter, in addition to the fee for registration of
such vehicle, trailer or semitrailer. The certificate of title shall be good
for the life of the vehicle, trailer or semitrailer while owned or held by
the original holder of the certificate of title.
  (5)  Upon sale and delivery to the purchaser of every vehicle subject
to a purchase money security interest as defined in K.S.A. 84-9-107, and
amendments thereto, the dealer or secured party may complete a notice
of security interest and when so completed, the purchaser shall execute
the notice, in a form prescribed by the division, describing the vehicle
and showing the name and address of the secured party and of the debtor
and other information the division requires. The dealer or secured party,
within 10 15 days of the sale and delivery, may mail or deliver the notice
of security interest, together with a fee of $2.50, to the division. The notice
of security interest shall be retained by the division until it receives an
application for a certificate of title to the vehicle and a certificate of title
is issued. The certificate of title shall indicate any security interest in the
vehicle. Upon issuance of the certificate of title, the division shall mail or
deliver confirmation of the receipt of the notice of security interest, the
date the certificate of title is issued and the security interest indicated, to
the secured party at the address shown on the notice of security interest.
The proper completion and timely mailing or delivery of a notice of se-
curity interest by a dealer or secured party shall perfect a security interest
in the vehicle described on the date of such mailing or delivery. The
county treasurers shall mail a copy of the title application to the Kansas
lienholder. Each county treasurer shall charge the Kansas lienholder a
$1.50 service fee for processing and mailing a copy of the title application
to the Kansas lienholder.
  (6)  It shall be unlawful for any person to operate in this state a vehicle
required to be registered under this act, or to transfer the title to any
such vehicle to any person or dealer, unless a certificate of title has been
issued as herein provided. In the event of a sale or transfer of ownership
of a vehicle for which a certificate of title has been issued, which certif-
icate of title is in the possession of the transferor at the time of delivery
of the vehicle, the holder of such certificate of title shall endorse on the
same an assignment thereof, with warranty of title in a form prescribed
by the division and printed thereon and the transferor shall deliver the
same to the buyer at the time of delivery to the buyer of the vehicle or
at a time agreed upon by the parties, not to exceed 30 days, inclusive of
weekends and holidays, after the time of delivery. The agreement of the
parties shall be executed on a form provided by the division. The require-
ments of this paragraph concerning delivery of an assigned title are sat-
isfied if the transferor mails to the transferee by restricted mail the as-
signed certificate of title within the 30 days, and if the transferor is a
dealer, as defined by K.S.A. 8-2401, and amendments thereto, such trans-
feror shall be deemed to have possession of the certificate of title if the
transferor has made application therefor to the division. The buyer shall
then present such assigned certificate of title to the division at the time
of making application for registration of such vehicle. A new certificate
of title shall be issued to the buyer, upon payment of the fee of $7 until
July 1, 1999, and $3.50 thereafter. If such vehicle is sold to a resident of
another state or country, the dealer or person making the sale shall notify
the division of the sale and the division shall make notation thereof in the
records of the division. When a person acquires a security agreement on
a vehicle subsequent to the issuance of the original title on such vehicle,
such person shall require the holder of the certificate of title to surrender
the same and sign an application for a mortgage title in form prescribed
by the division. Upon such surrender such person shall immediately de-
liver the certificate of title, application, and a fee of $7 until July 1, 1999,
and $3.50 thereafter, to the division. Upon receipt thereof, the division
shall issue a new certificate of title showing the liens or encumbrances so
created, but not more than two liens or encumbrances may be shown
upon a title. When a prior lienholder's name is removed from the title,
there must be satisfactory evidence presented to the division that the lien
or encumbrance has been paid. When the indebtedness to a lienholder,
whose name is shown upon a title, is paid in full, such lienholder within
10 days after written demand by restricted mail, shall furnish to the holder
of the title a release of lien or execute such a release in the space provided
on the title. For failure to comply with such a demand the lienholder shall
be liable to the holder of the title for $100 and also shall be liable for any
loss caused to the holder by such failure. When the indebtedness to a
lienholder, whose name is shown upon a title, is collected in full, such
lienholder, within 30 days, shall furnish notice to the holder of title that
such indebtedness has been paid in full and that such title may be pre-
sented to the lienholder at any time for release of lien.
  (7)  It shall be unlawful for any person to buy or sell in this state any
vehicle required to be registered, unless, at the time of delivery thereof
or at a time agreed upon by the parties, not to exceed 30 days, inclusive
of weekends and holidays, after the time of delivery, there shall pass
between the parties a certificate of title with an assignment thereof. The
sale of a vehicle required to be registered under the laws of this state,
without assignment of the certificate of title, is fraudulent and void, unless
the parties shall agree that the certificate of title with assignment thereof
shall pass between them at a time other than the time of delivery, but
within 30 days thereof. The requirements of this paragraph concerning
delivery of an assigned title shall be satisfied if (i) the seller mails to the
purchaser by restricted mail the assigned certificate of title within 30 days,
or (ii) if the transferor is a dealer, as defined by K.S.A. 8-2401, and amend-
ments thereto, such seller shall be deemed to have possession of the
certificate of title if such seller has made application therefor to the di-
vision, or (iii) if the transferor is a dealer and has assigned a title pursuant
to paragraph (9) of this subsection (c).
  (8)  In cases of sales under the order of a court of a vehicle required
to be registered under this act, the officer conducting such sale shall issue
to the purchaser a certificate naming the purchaser and reciting the facts
of the sale, which certificate shall be prima facie evidence of the own-
ership of such purchaser for the purpose of obtaining a certificate of title
to such motor vehicle and for registering the same. Any such purchaser
shall be allowed 30 days, inclusive of weekends and holidays, from the
date of sale to make application to the division for a certificate of title
and for the registering of such motor vehicle.
  (9)  Any dealer who has acquired a vehicle, the title for which was
issued under the laws of and in a state other than the state of Kansas,
shall not be required to obtain a Kansas certificate of title therefor during
the time such vehicle remains in such dealer's possession and at such
dealer's place of business for the purpose of sale. The purchaser or trans-
feree shall present the assigned title to the division of vehicles when
making application for a certificate of title as provided in subsection (c)(1).
  Sec. 2.  K.S.A. 1996 Supp. 8-135 is hereby repealed.
  Sec. 3.  This act shall take effect and be in force from and after its
publication in the statute book.