As Amended by Senate Committee
         
[As Amended by House on Final Action]
         
Session of 1999
         
HOUSE BILL No. 2259
         
By Committee on Transportation
         
2-4
         
11             AN  ACT relating to motor vehicles; concerning the filing of notice of
12             security interest; amending K.S.A. 1998 Supp. 8-135 and repealing the
13             existing section.
14      
15       Be it enacted by the Legislature of the State of Kansas:
16             Section  1. K.S.A. 1998 Supp. 8-135 is hereby amended to read as
17       follows: 8-135. (a) Upon the transfer of ownership of any vehicle regis-
18       tered under this act, the registration of the vehicle and the right to use
19       any license plate thereon shall expire and thereafter there shall be no
20       transfer of any registration, and the license plate shall be removed by the
21       owner thereof. Except as provided in K.S.A. 8-172, and amendments
22       thereto, and K.S.A. 1998 Supp. 8-1,147, and amendments thereto, it shall
23       be unlawful for any person, other than the person to whom the license
24       plate was originally issued, to have possession thereof. When the own-
25       ership of a registered vehicle is transferred, the original owner of the
26       license plate may register another vehicle under the same number, upon
27       application and payment of a fee of $1.50, if such other vehicle does not
28       require a higher license fee. If a higher license fee is required, then the
29       transfer may be made upon the payment of the transfer fee of $1.50 and
30       the difference between the fee originally paid and that due for the new
31       vehicle.
32             (b) Subject to the provisions of subsection (a) of K.S.A. 8-198, and
33       amendments thereto, upon the transfer or sale of any vehicle by any
34       person or dealer, or upon any transfer in accordance with K.S.A. 1998
35       Supp. 59-3511, and amendments thereto, the new owner thereof, within
36       30 days, inclusive of weekends and holidays, from date of such transfer
37       shall make application to the division for registration or reregistration of
38       the vehicle, but no person shall operate the vehicle on any highway in
39       this state during the thirty-day period without having applied for and
40       obtained temporary registration from the county treasurer or from a
41       dealer. After the expiration of the thirty-day period, it shall be unlawful
42       for the owner or any other person to operate such vehicle upon the high-

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  1       ways of this state unless the vehicle has been registered as provided in
  2       this act. For failure to make application for registration as provided in
  3       this section, a penalty of $2 shall be added to other fees. When a person
  4       has a current motorcycle or passenger vehicle registration and license
  5       plate, including any registration decal affixed thereto, for a vehicle and
  6       has sold or otherwise disposed of the vehicle and has acquired another
  7       motorcycle or passenger vehicle and intends to transfer the registration
  8       and the license plate to the motorcycle or passenger vehicle acquired, but
  9       has not yet had the registration transferred in the office of the county
10       treasurer, such person may operate the motorcycle or passenger vehicle
11       acquired for a period of not to exceed 30 days by displaying the license
12       plate on the rear of the vehicle acquired. If the acquired vehicle is a new
13       vehicle such person also must carry the assigned certificate of title or
14       manufacturer's statement of origin when operating the acquired vehicle,
15       except that a dealer may operate such vehicle by displaying such dealer's
16       dealer license plate.
17             (c) Certificate of title: No vehicle required to be registered shall be
18       registered or any license plate or registration decal issued therefor, unless
19       the applicant for registration shall present satisfactory evidence of own-
20       ership and apply for an original certificate of title for such vehicle. The
21       following paragraphs of this subsection shall apply to the issuance of a
22       certificate of title for a nonhighway vehicle, as defined in K.S.A. 8-197,
23       and amendments thereto, except to the extent such paragraphs are made
24       inapplicable by or are inconsistent with K.S.A. 8-198, and amendments
25       thereto.
26             (1) An application for certificate of title shall be made by the owner
27       or the owner's agent upon a form furnished by the division and shall state
28       all liens or encumbrances thereon, and such other information as the
29       division may require. Notwithstanding any other provision of this section,
30       no certificate of title, other than a duplicate title, shall be issued for a
31       vehicle having any unreleased lien or encumbrance thereon, unless the
32       transfer of such vehicle has been consented to in writing by the holder
33       of the lien or encumbrance. Such consent shall be in a form approved by
34       the division. In the case of members of the armed forces of the United
35       States while the United States is engaged at war with any foreign nation
36       and for a period of six months next following the cessation of hostilities,
37       such application may be signed by the owner's spouse, parents, brother
38       or sister. The county treasurer shall use reasonable diligence in ascer-
39       taining whether the facts stated in such application are true, and if sat-
40       isfied that the applicant is the lawful owner of such vehicle, or otherwise
41       entitled to have the same registered in such applicant's name, shall so
42       notify the division, who shall issue an appropriate certificate of title. The
43       certificate of title shall be in a form approved by the division, and shall

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  1       contain a statement of any liens or encumbrances which the application
  2       shows, and such other information as the division determines.
  3             (2) The certificate of title shall contain upon the reverse side a form
  4       for assignment of title to be executed by the owner before a notary public
  5       or some other officer authorized to administer an oath. This assignment
  6       shall contain a statement of all liens or encumbrances on the vehicle at
  7       the time of assignment. The certificate of title shall also contain on the
  8       reverse side blank spaces so that an abstract of mileage as to each owner
  9       will be available. The seller at the time of each sale shall insert the mileage
10       on the form filed for application or reassignment of title, and the division
11       shall insert such mileage on the certificate of title when issued to pur-
12       chaser or assignee. The signature of the purchaser or assignee is required
13       on the form filed for application or reassignment of title, acknowledging
14       the odometer certification made by the seller, except that vehicles which
15       are 10 model years or older and trucks with a gross vehicle weight of
16       more than 16,000 pounds shall be exempt from the mileage acknowledg-
17       ment requirement of the purchaser or assignee. Such title shall indicate
18       whether the vehicle for which it is issued has been titled previously as a
19       nonhighway vehicle. In addition, the reverse side shall contain two forms
20       for reassignment by a dealer, stating the liens or encumbrances thereon.
21       The first form of reassignment shall be used only when a dealer sells the
22       vehicle to another dealer. The second form of reassignment shall be used
23       by a dealer when selling the vehicle to another dealer or the ultimate
24       owner of the vehicle. The reassignment by a dealer shall be used only
25       where the dealer resells the vehicle, and during the time that the vehicle
26       remains in the dealer's possession for resale, the certificate of title shall
27       be dormant. When the ownership of any vehicle passes by operation of
28       law, or repossession upon default of a lease, security agreement, or ex-
29       ecutory sales contract, the person owning such vehicle, upon furnishing
30       satisfactory proof to the county treasurer of such ownership, may procure
31       a certificate of title to the vehicle. When a vehicle is registered in another
32       state and is repossessed in another state, the owner of such vehicle shall
33       not be entitled to obtain a valid Kansas title or registration, except that
34       when a vehicle is registered in another state, but is financed originally by
35       a financial institution chartered in the state of Kansas or when a financial
36       institution chartered in Kansas purchases a pool of motor vehicle loans
37       from the resolution trust corporation or a federal regulatory agency, and
38       the vehicle is repossessed in another state, such Kansas financial institu-
39       tion shall be entitled to obtain a valid Kansas title or registration. In
40       addition to any other fee required for the issuance of a certificate of title,
41       any applicant obtaining a certificate of title for a repossessed vehicle shall
42       pay a fee of $3.
43             (3) Dealers shall execute, upon delivery to the purchaser of every new

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  1       vehicle, a manufacturer's statement of origin stating the liens and encum-
  2       brances thereon. Such statement of origin shall be delivered to the pur-
  3       chaser at the time of delivery of the vehicle or at a time agreed upon by
  4       the parties, not to exceed 30 days, inclusive of weekends and holidays.
  5       The agreement of the parties shall be executed on a form approved by
  6       the division. In the event delivery of title cannot be made personally, the
  7       seller may deliver the manufacturer's statement of origin by restricted
  8       mail to the address of purchaser shown on the purchase agreement. The
  9       manufacturer's statement of origin may include an attachment containing
10       assignment of such statement of origin on forms approved by the division.
11       Upon the presentation to the division of a manufacturer's statement of
12       origin, by a manufacturer or dealer for a new vehicle, sold in this state, a
13       certificate of title shall be issued if there is also an application for regis-
14       tration, except that no application for registration shall be required for a
15       travel trailer used for living quarters and not operated on the highways.
16             (4) The fee for each original certificate of title shall be $7 until July
17       1, 1999, and $3.50 thereafter, in addition to the fee for registration of
18       such vehicle, trailer or semitrailer. The certificate of title shall be good
19       for the life of the vehicle, trailer or semitrailer while owned or held by
20       the original holder of the certificate of title.
21             (5) Upon sale and delivery to the purchaser of every vehicle subject
22       to a purchase money security interest as defined in K.S.A. 84-9-107, and
23       amendments thereto, the dealer or secured party may complete a notice
24       of security interest and when so completed, the purchaser shall execute
25       the notice, in a form prescribed by the division, describing the vehicle
26       and showing the name and address of the secured party and of the debtor
27       and other information the division requires. The dealer or secured party,
28       within 15 20 days of the sale and delivery, may mail or deliver the notice
29       of security interest, together with a fee of $2.50, to the division. The notice
30       of security interest shall be retained by the division until it receives an
31       application for a certificate of title to the vehicle and a certificate of title
32       is issued. The certificate of title shall indicate any security interest in the
33       vehicle. Upon issuance of the certificate of title, the division shall mail or
34       deliver confirmation of the receipt of the notice of security interest, the
35       date the certificate of title is issued and the security interest indicated, to
36       the secured party at the address shown on the notice of security interest.
37       The proper completion and timely mailing or delivery of a notice of se-
38       curity interest by a dealer or secured party shall perfect a security interest
39       in the vehicle described on the date of such mailing or delivery. The
40       county treasurers shall mail a copy of the title application to the Kansas
41       lienholder. Each county treasurer shall charge the Kansas lienholder a
42       $1.50 service fee for processing and mailing a copy of the title application
43       to the Kansas lienholder.

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  1             (6) It shall be unlawful for any person to operate in this state a vehicle
  2       required to be registered under this act, or to transfer the title to any
  3       such vehicle to any person or dealer, unless a certificate of title has been
  4       issued as herein provided. In the event of a sale or transfer of ownership
  5       of a vehicle for which a certificate of title has been issued, which certif-
  6       icate of title is in the possession of the transferor at the time of delivery
  7       of the vehicle, the holder of such certificate of title shall endorse on the
  8       same an assignment thereof, with warranty of title in a form prescribed
  9       by the division and printed thereon and the transferor shall deliver the
10       same to the buyer at the time of delivery to the buyer of the vehicle or
11       at a time agreed upon by the parties, not to exceed 30 days, inclusive of
12       weekends and holidays, after the time of delivery. The agreement of the
13       parties shall be executed on a form provided by the division. The require-
14       ments of this paragraph concerning delivery of an assigned title are sat-
15       isfied if the transferor mails to the transferee by restricted mail the as-
16       signed certificate of title within the 30 days, and if the transferor is a
17       dealer, as defined by K.S.A. 8-2401, and amendments thereto, such trans-
18       feror shall be deemed to have possession of the certificate of title if the
19       transferor has made application therefor to the division. The buyer shall
20       then present such assigned certificate of title to the division at the time
21       of making application for registration of such vehicle. A new certificate
22       of title shall be issued to the buyer, upon payment of the fee of $7 until
23       July 1, 1999, and $3.50 thereafter. If such vehicle is sold to a resident of
24       another state or country, the dealer or person making the sale shall notify
25       the division of the sale and the division shall make notation thereof in the
26       records of the division. When a person acquires a security agreement on
27       a vehicle subsequent to the issuance of the original title on such vehicle,
28       such person shall require the holder of the certificate of title to surrender
29       the same and sign an application for a mortgage title in form prescribed
30       by the division. Upon such surrender such person shall immediately de-
31       liver the certificate of title, application, and a fee of $7 until July 1, 1999,
32       and $3.50 thereafter, to the division. Upon receipt thereof, the division
33       shall issue a new certificate of title showing the liens or encumbrances so
34       created, but not more than two liens or encumbrances may be shown
35       upon a title. When a prior lienholder's name is removed from the title,
36       there must be satisfactory evidence presented to the division that the lien
37       or encumbrance has been paid. When the indebtedness to a lienholder,
38       whose name is shown upon a title, is paid in full, such lienholder within
39       10 days after written demand by restricted mail, shall furnish to the holder
40       of the title a release of lien or execute such a release in the space provided
41       on the title. For failure to comply with such a demand the lienholder shall
42       be liable to the holder of the title for $100 and also shall be liable for any
43       loss caused to the holder by such failure. When the indebtedness to a

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  1       lienholder, whose name is shown upon a title, is collected in full, such
  2       lienholder, within 30 days, shall furnish notice to the holder of title that
  3       such indebtedness has been paid in full and that such title may be pre-
  4       sented to the lienholder at any time for release of lien.
  5             (7) It shall be unlawful for any person to buy or sell in this state any
  6       vehicle required to be registered, unless, at the time of delivery thereof
  7       or at a time agreed upon by the parties, not to exceed 30 days, inclusive
  8       of weekends and holidays, after the time of delivery, there shall pass
  9       between the parties a certificate of title with an assignment thereof. The
10       sale of a vehicle required to be registered under the laws of this state,
11       without assignment of the certificate of title, is fraudulent and void, unless
12       the parties shall agree that the certificate of title with assignment thereof
13       shall pass between them at a time other than the time of delivery, but
14       within 30 days thereof. The requirements of this paragraph concerning
15       delivery of an assigned title shall be satisfied if (i) the seller mails to the
16       purchaser by restricted mail the assigned certificate of title within 30 days,
17       or (ii) if the transferor is a dealer, as defined by K.S.A. 8-2401, and amend-
18       ments thereto, such seller shall be deemed to have possession of the
19       certificate of title if such seller has made application therefor to the di-
20       vision, or (iii) if the transferor is a dealer and has assigned a title pursuant
21       to paragraph (9) of this subsection (c).
22             (8) In cases of sales under the order of a court of a vehicle required
23       to be registered under this act, the officer conducting such sale shall issue
24       to the purchaser a certificate naming the purchaser and reciting the facts
25       of the sale, which certificate shall be prima facie evidence of the own-
26       ership of such purchaser for the purpose of obtaining a certificate of title
27       to such motor vehicle and for registering the same. Any such purchaser
28       shall be allowed 30 days, inclusive of weekends and holidays, from the
29       date of sale to make application to the division for a certificate of title
30       and for the registering of such motor vehicle.
31             (9) Any dealer who has acquired a vehicle, the title for which was
32       issued under the laws of and in a state other than the state of Kansas,
33       shall not be required to obtain a Kansas certificate of title therefor during
34       the time such vehicle remains in such dealer's possession and at such
35       dealer's place of business for the purpose of sale. The purchaser or trans-
36       feree shall present the assigned title to the division of vehicles when
37       making application for a certificate of title as provided in subsection (c)(1).
38             (10) Motor vehicles may be held and titled in transfer-on-death form.
39             (11) Notwithstanding the provisions of this act with respect to time
40       requirements for delivery of a certificate of title, or manufacturer's state-
41       ment of origin, as applicable, any person who chooses to reaffirm the sale
42       in writing on a form approved by the division which advises them of their
43       rights pursuant to paragraph (7) of subsection (c) and who has received

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  1       and accepted assignment of the certificate of title or manufacturer's state-
  2       ment of origin for the vehicle in issue may not thereafter void or set aside
  3       the transaction with respect to the vehicle for the reason that a certificate
  4       of title or manufacturer's statement of origin was not timely delivered,
  5       and in such instances the sale of a vehicle shall not be deemed to be
  6       fraudulent and void for that reason alone. 
  7       [(12) The owner of any vehicle assigning a certificate of title in
  8       accordance with the provisions of this section may file with the
  9       division a form indicating that such owner has assigned such cer-
10       tificate of title. Such forms shall be furnished by the division and
11       shall contain such information as the division may require. Any
12       owner filing a form as provided in this subsection shall pay a fee of
13       $10. The filing of such form shall be prima facie evidence that such
14       certificate of title was assigned and shall create a rebuttable pre-
15       sumption. If the assignee of a certificate of title fails to make ap-
16       plication for registration, an owner assigning such title and filing
17       the form and paying of the fee provided by this paragraph subsec-
18       tion shall not be held liable for damages resulting from the oper-
19       ation of such vehicle.]
20             Sec.  2. K.S.A. 1998 Supp. 8-135 is hereby repealed.
21        Sec.  3. This act shall take effect and be in force from and after its
22       publication in the statute book.