CHAPTER 73 SENATE Substitute for HOUSE BILL No. 2561 An Act relating to motor vehicles; concerning certificates of title; amending K.S.A. 8-199
and K.S.A. 1999 Supp. 8-116a, 8-135, 8-197, 8-198 and 8-1,137 and repealing the existing
sections; also repealing K.S.A. 8-1,136.
Be it enacted by the Legislature of the State of Kansas:

      New Section  1. (a) The provisions of this section shall be a part of
and supplemental to the provisions of article 1 of chapter 8 of the Kansas
Statutes Annotated, and as used in this section, the words and phrases
defined by K.S.A. 8-126, and amendments thereto, shall have the mean-
ings respectively ascribed to them therein.

      (b) As used in this section:

      (1) ``Nonrepairable vehicle'' means any motor vehicle which: (A) Has
been damaged, destroyed, wrecked, burned or submerged in water to the
extent that such motor vehicle is incapable of safe operation for use on
roads or highways and has no resale value except as a source of parts or
scrap only; or (B) the owner irreversibly designates as a source of parts
or scrap;

      (2) ``nonrepairable vehicle certificate'' means a motor vehicle own-
ership document issued by the division designating that vehicle a non-
repairable vehicle.

      (c)  (1) Except as otherwise provided by this section, the owner of a
vehicle that meets the definition of a nonrepairable vehicle shall apply to
the division for a nonrepairable vehicle certificate before the ownership
of the motor vehicle is transferred. In no event shall such application be
made more than 30 days after the vehicle is determined to be a nonre-
pairable vehicle.

      (2) Every insurance company, which pursuant to a damage settle-
ment, acquires ownership of a vehicle that has incurred damage requiring
the vehicle to be designated a nonrepairable vehicle, shall apply to the
division for a nonrepairable vehicle certificate within 30 days after the
title is assigned and delivered by the owner to the insurance company,
with all liens released.

      (3) Every insurance company which makes a damage settlement for
a vehicle that has incurred damage requiring such vehicle to be desig-
nated a nonrepairable vehicle, but does not acquire ownership of the
vehicle, shall notify the vehicle owner of the owner's obligation to apply
to the department for a nonrepairable vehicle certificate for the motor
vehicle, and shall notify the division of this fact in accordance with pro-
cedures established by the division. The vehicle owner shall apply to the
division for a nonrepairable vehicle certificate within 30 days after being
notified by the insurance company.

      (4) The lessee of any vehicle which incurs damage requiring the ve-
hicle to be designated a nonrepairable vehicle shall notify the lessor of
this fact within 30 days of the determination that the vehicle is a nonre-
pairable vehicle.

      (5) The lessor of any motor vehicle which has incurred damage re-
quiring the vehicle to be titled as a nonrepairable vehicle, shall apply to
the division for a nonrepairable vehicle certificate within 30 days after
being notified of this fact by the lessee.

      (6) Every person acquiring ownership of a motor vehicle that meets
the definition of a nonrepairable vehicle, for which a nonrepairable ve-
hicle certificate has not been issued, shall apply to the division for the
required document prior to any further transfer of such vehicle, but in
no event, more than 30 days after ownership is acquired.

      (7) Failure to apply for a nonrepairable vehicle certificate as provided
by this subsection shall be a class C nonperson misdemeanor.

      (d)  (1) Upon notification of a vehicle's designation as a nonrepairable
vehicle, the division shall issue a nonrepairable vehicle certificate.

      (2) Each nonrepairable vehicle certificate shall contain the same
identifying information and comply with format, size and security require-
ments applicable to certificates of title under K.S.A. 8-135, and amend-
ments thereto, and shall be conspicuously labeled with this designation
on the face of the certificate.

      (3) Each application for a nonrepairable vehicle certificate shall be
accompanied by the fee required for an original certificate of title under
K.S.A. 8-135, and amendments thereto, and if the application is not made
within the time prescribed by subsection (c), an additional fee of $2.

      (e)  (1) No motor vehicle for which a nonrepairable vehicle certificate
has been issued shall be titled or registered by the division for use on the
roads or highways of this state.

      (2) Ownership of the motor vehicle for which a nonrepairable vehicle
certificate has been issued may only be transferred once.

      (3) Any motor vehicle transferred through the use of a nonrepairable
vehicle certificate shall be dismantled, disassembled or recycled and may
not be sold as a unit at retail.

      When the nonrepairable vehicle has been dismantled, disassembled or
recycled and such vehicle is sold to a scrap processor for recycling after
the salvageable parts have been removed, the owner shall surrender the
nonrepairable vehicle certificate to the division with the word recycled
written or stamped across its face and no certificate of title of any type
shall be issued nor any registration allowed again for such vehicle.

      (4) A nonrepairable vehicle certificate may be used to transfer own-
ership of a motor vehicle 10 or more model years of age, in accordance
with this section, when the owner does not have a certificate of title in
the owner's possession.

      (f) The secretary of the department of revenue may adopt rules and
regulations as the secretary deems necessary to carry out the provisions
of this section.

      Sec.  2. K.S.A. 1999 Supp. 8-116a is hereby amended to read as fol-
lows: 8-116a. (a) When an application is made for a vehicle which has
been assembled, reconstructed, reconstituted or restored from one or
more vehicles, or the proper identification number of a vehicle is in doubt,
the procedure in this section shall be followed. The owner of the vehicle
shall request the Kansas highway patrol to check the vehicle. At the time
of such check the owner shall supply the highway patrol with information
concerning the history of the various parts of the vehicle. Such informa-
tion shall be supplied by affidavit of the owner, if so requested by the
highway patrol. If the highway patrol is satisfied that the vehicle contains
no stolen parts, it shall assign an existing or new identification number to
the vehicle and direct the places and manner in which the identification
number is to be located and affixed or implanted. A charge of $10 per
hour or part thereof, with a minimum charge of $10, shall be made to
the owner of a vehicle requesting check under this subsection, and such
charge shall be paid prior to the check under this section. When a check
has been made under subsection (b), not more than 60 days prior to a
check of the same vehicle identification number, requested by the owner
of the vehicle to obtain a regular certificate of title in lieu of a nonhighway
certificate of title or obtain a rebuilt salvage title in lieu of a salvage title,
no charge shall be made for such second check.

      (b)  Any person making application for any original Kansas title for a
used vehicle which, at the time of making application, is titled in another
jurisdiction, as a condition precedent to obtaining any Kansas title, shall
have such vehicle checked by the Kansas highway patrol for verification
that the vehicle identification number shown on the foreign title is gen-
uine and agrees with the identification number on the vehicle. Checks
under this section may include inspection for possible violation of K.S.A.
21-3757, and amendments thereto or other evidence of possible fraud.
The verification shall be made upon forms prescribed by the division of
vehicles which shall contain such information as the secretary of revenue
shall require by rules and regulations. A charge of $10 per hour or part
thereof, with a minimum charge of $10, shall be made for checks under
this subsection. When a vehicle is registered in another state, but is fi-
nanced by a Kansas financial institution and is repossessed in another
state and such vehicle will not be returned to Kansas, the check required
by this subsection (b) shall not be required to obtain a valid Kansas title
or registration.

      (c) As used in this act, ``identification number'' or ``vehicle identifi-
cation number'' means an identifying number, serial number, engine
number, transmission number or other distinguishing number or mark,
placed on a vehicle, engine, transmission or other essential part by its
manufacturer or by authority of the division of vehicles or the Kansas
highway patrol or in accordance with the laws of another state or country.

      (d) The checks made under subsection (b) may be made by:

      (1) A designee of the superintendent of the Kansas highway patrol;
or

      (2) an employee of a new vehicle dealer, as defined in subsection (b)
of K.S.A. 8-2401, and amendments thereto, for the purposes provided for
in subsection (f). For checks made by a designee, $1 of each charge shall
be remitted to the Kansas highway patrol and the balance of such charges
shall be retained by such designee. When a check is made under either
subsection (a) or (b) by personnel of the Kansas highway patrol or when
a check is made under subsection (b) by an employee of a new vehicle
dealer, the entire amount of the charge therefor shall be paid to the
highway patrol.

      (e) There is hereby created the vehicle identification number fee
fund. The Kansas highway patrol shall remit all moneys received by the
Kansas highway patrol from fees collected under subsection (d) to the
state treasurer at least monthly. Upon receipt of each such remittance,
the state treasurer shall deposit the entire amount in the state treasury
to the credit of the vehicle identification number fee fund. All expendi-
tures from the vehicle identification number fee fund shall be made in
accordance with appropriations acts upon warrants of the director of ac-
counts and reports issued pursuant to vouchers approved by the super-
intendent of the Kansas highway patrol or by a person or persons desig-
nated by the superintendent.

      (f) An employee of a new vehicle dealer, who has received initial
training and certification from the highway patrol, and has met continuing
certification requirements, in accordance with rules and regulations
adopted by the superintendent of the highway patrol, may provide the
checks under subsection (b), in accordance with rules and regulations
adopted by the superintendent of the highway patrol, on motor vehicles
repurchased or reacquired by a manufacturer, distributor or financing
subsidiary of such manufacturer and which are purchased by the new
vehicle dealer. At any time, after a hearing in accordance with the pro-
visions of the Kansas administrative procedure act, the superintendent of
the highway patrol may revoke, suspend, decline to renew or decline to
issue certification for failure to comply with the provisions of this sub-
section, including any rules and regulations.

      Sec.  3. K.S.A. 1999 Supp. 8-135 is hereby amended to read as fol-
lows: 8-135. (a) Upon the transfer of ownership of any vehicle registered
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. Except as provided in K.S.A. 8-172, and amendments thereto,
and K.S.A. 1999 Supp. 8-1,147, and amendments thereto, it shall be un-
lawful 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 ve-
hicle.

      (b) Subject to the provisions of subsection (a) of K.S.A. 8-198, and
amendments thereto, upon the transfer or sale of any vehicle by any
person or dealer, or upon any transfer in accordance with K.S.A. 1999
Supp. 59-3511, and amendments thereto, 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 or reregistration of
the vehicle, but no person shall operate the vehicle on any highway in
this state during the thirty-day period without 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 high-
ways 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 passenger vehicle acquired, but
has not yet had the registration transferred in the office of the county
treasurer, such person may operate the motorcycle 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, salvage vehicle or rebuilt
salvage 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 or salvage vehicle. In addition, the reverse side shall
contain two forms for reassignment by a dealer, stating the liens or en-
cumbrances 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, se-
curity agreement, or executory 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 institution shall be entitled to obtain a valid Kansas
title or registration. In addition to any other fee required for the issuance
of a certificate of title, any applicant obtaining a certificate of title for a
repossessed vehicle shall pay a fee of $3.

      (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, 2002, $6 until July 1, 2004, 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 20 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, 2002, $6 until July 1, 2004, 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 ac-
quires 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 deliver the certificate of title, application,
and a fee of $7 until July 1, 2002, $6 until July 1, 2004, and $3.50 there-
after, 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 satis-
factory 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).

      (10) Motor vehicles may be held and titled in transfer-on-death form.

      (11) Notwithstanding the provisions of this act with respect to time
requirements for delivery of a certificate of title, or manufacturer's state-
ment of origin, as applicable, any person who chooses to reaffirm the sale
in writing on a form approved by the division which advises them of their
rights pursuant to paragraph (7) of subsection (c) and who has received
and accepted assignment of the certificate of title or manufacturer's state-
ment of origin for the vehicle in issue may not thereafter void or set aside
the transaction with respect to the vehicle for the reason that a certificate
of title or manufacturer's statement of origin was not timely delivered,
and in such instances the sale of a vehicle shall not be deemed to be
fraudulent and void for that reason alone.

      (12) The owner of any vehicle assigning a certificate of title in ac-
cordance with the provisions of this section may file with the division a
form indicating that such owner has assigned such certificate of title. Such
forms shall be furnished by the division and shall contain such information
as the division may require. Any owner filing a form as provided in this
paragraph shall pay a fee of $10. The filing of such form shall be prima
facie evidence that such certificate of title was assigned and shall create
a rebuttable presumption. If the assignee of a certificate of title fails to
make application for registration, an owner assigning such title and filing
the form in accordance with the provisions of this paragraph shall not be
held liable for damages resulting from the operation of such vehicle.

      Sec.  4. K.S.A. 1999 Supp. 8-197 is hereby amended to read as fol-
lows: 8-197. (a) The provisions of K.S.A. 8-197 to 8-199, inclusive, and
amendments thereto, shall be a part of and supplemental to the provisions
of article 1 of chapter 8 of the Kansas Statutes Annotated, and as used in
such sections, the words and phrases defined by K.S.A. 8-126, and amend-
ments thereto, shall have the meanings respectively ascribed to them
therein.

      (b) As used in this act, the term K.S.A. 8-197 through 8-199, and
amendments thereto:

      (1) ``Nonhighway vehicle'' means:

      (1) (A) Any motor vehicle which is of a type required to be registered
in this state, but which cannot be registered because it is not manufac-
tured for the purpose of using the same on the highways of this state and
is not provided with the equipment required by state statute for vehicles
of such type which are used on the highways of this state;

      (2) (B) any motor vehicle, other than a salvage vehicle, for which is
of a type required to be registered in this state, but which cannot be
registered because it has been wrecked or damaged to the extent that:
the equipment required by state statute on any such vehicle used on the
highways of this state is not present or is not in good condition or proper
adjustment, as prescribed by state statute or any rules and regulations
adopted pursuant thereto, or such vehicle is in an inoperable condition
or a condition that would render the operation thereof on the highways
of this state a hazard to the public safety; and in either event, such vehicle
either will be destroyed, dismantled or sold as junk or substantial repairs
will be required to rebuild or restore such vehicle to a condition which
will permit the registration thereof the owner has not provided motor
vehicle liability insurance coverage or an approved self insurance plan
under K.S.A. 40-3104, and amendments thereto, and has not applied for
or obtained registration of such motor vehicle in accordance with article
1 of chapter 8 of the Kansas Statutes Annotated; or

      (3) (C) any all-terrain vehicle.;

      (2) ``salvage vehicle'' means any motor vehicle which is of a type re-
quired to be registered in this state, but which cannot be registered be-
cause it has been wrecked or damaged to the extent that: The equipment
required by state statute on any such vehicle used on the highways of this
state is not present or is not in good condition or proper adjustment, as
prescribed by state statute or any rules and regulations adopted pursuant
thereto, or such vehicle is in an inoperable condition or a condition that
would render the operation thereof on the highways of this state a hazard
to the public safety; and in either event, such vehicle would require sub-
stantial repairs to rebuild or restore such vehicle to a condition which will
permit the registration thereof;

      (3) ``salvage title'' means a certificate of title issued by the division
designating a motor vehicle a salvage vehicle;

      (4) ``rebuilt salvage vehicle'' means any motor vehicle previously is-
sued a salvage title;

      (5) ``rebuilt salvage title'' means a certificate of title issued by the
division for a vehicle previously designated a salvage vehicle which is now
designated a rebuilt salvage vehicle.

      Sec.  5. K.S.A. 1999 Supp. 8-198 is hereby amended to read as fol-
lows: 8-198. (a) A nonhighway or salvage vehicle shall not be required to
be registered in this state, as provided in K.S.A. 8-135, and amendments
thereto, but nothing in this section shall be construed as abrogating, lim-
iting or otherwise affecting the provisions of K.S.A. 8-142, and amend-
ments thereto, which make it unlawful for any person to operate or know-
ingly permit the operation in this state of a vehicle required to be
registered in this state.

      (b) Upon the sale or transfer of any nonhighway vehicle or salvage
vehicle, the purchaser thereof shall obtain a nonhighway certificate of title
or salvage title, whichever is applicable, in the following manner:

      (1) If the transferor is a vehicle dealer, as defined in K.S.A. 8-2401,
and amendments thereto, and a certificate of title has not been issued for
such vehicle under this section or under the provisions of K.S.A. 8-135,
and amendments thereto, such transferor shall make application for and
assign a nonhighway certificate of title or a salvage title, whichever is
applicable, to the purchaser of such nonhighway vehicle or salvage vehicle
in the same manner and under the same conditions prescribed by K.S.A.
8-135, and amendments thereto, for the application for and assignment
of a certificate of title thereunder. Upon the assignment thereof, the
purchaser shall make application for a new nonhighway certificate of title
or salvage title, as provided in subsection (c).

      (2) Except as provided in subsection (b) of K.S.A. 8-199, and amend-
ments thereto, if a certificate of title has been issued for any such vehicle
under the provisions of K.S.A. 8-135, and amendments thereto, the owner
of such nonhighway vehicle or salvage vehicle may surrender such cer-
tificate of title to the division of vehicles and make application to the
division for a nonhighway certificate of title or salvage title, whichever is
applicable, or the owner may obtain from the county treasurer's office a
form prescribed by the division of vehicles and, upon proper execution
thereof, may assign the nonhighway certificate of title, salvage title or the
regular certificate of title with such form attached to the purchaser of the
nonhighway vehicle or salvage vehicle. Upon receipt of the nonhighway
certificate of title, salvage title or the regular certificate of title with such
form attached, the purchaser shall make application for a new nonhighway
certificate of title or salvage title, whichever is applicable, as provided in
subsection (c).

      (3) If the transferor is not a vehicle dealer, as defined in K.S.A. 8-
2401, and amendments thereto, and a certificate of title has not been
issued for the vehicle under this section or a certificate of title was not
required under K.S.A. 8-135, and amendments thereto, the transferor
shall make application to the division for a nonhighway certificate of title
or salvage title, whichever is applicable, as provided in this section, except
that in addition thereto, the division shall require a bill of sale or such
transferor's affidavit, with at least one other corroborating affidavit, that
such transferor is the owner of such nonhighway vehicle or salvage ve-
hicle. If the division is satisfied that the transferor is the owner, the di-
vision shall issue a nonhighway certificate of title or salvage title, which-
ever is applicable, for such vehicle, and the transferor shall assign the
same to the purchaser, who shall make application for a new nonhighway
certificate of title or salvage title, whichever is applicable, as provided in
subsection (c).

      (c) Every purchaser of a nonhighway vehicle or salvage vehicle,
whether assigned a nonhighway certificate of title, salvage title or a reg-
ular certificate of title with the form specified in paragraph (2) of sub-
section (b) attached, shall make application to the county treasurer of the
county in which such person resides for a new nonhighway certificate of
title or salvage title, whichever is applicable, in the same manner and
under the same conditions as for an application for a certificate of title
under K.S.A. 8-135, and amendments thereto. Such application shall be
in the form prescribed by the director of vehicles and shall contain sub-
stantially the same provisions as required for an application under sub-
section (c)(1) of K.S.A. 8-135, and amendments thereto. In addition, such
application shall provide a place for the applicant to certify that the vehicle
for which the application for a nonhighway certificate of title or salvage
title is made is a nonhighway vehicle or salvage vehicle, whichever is
applicable, and other provisions the director deems necessary. Each ap-
plication for a nonhighway certificate of title or salvage title shall be ac-
companied by a fee of $7 until July 1, 2002, $6 until July 1, 2004, and
$3.50 thereafter, and if the application is not made to the county treasurer
within the time prescribed by K.S.A. 8-135, and amendments thereto, for
making application for a certificate of title thereunder, an additional fee
of $2.

      (d) A nonhighway certificate of title or salvage title shall be in form
and color as prescribed by the director of vehicles. A nonhighway certif-
icate of title or salvage title shall indicate clearly and distinctly on its face
that it is issued for a nonhighway vehicle or salvage vehicle, whichever is
applicable. A nonhighway certificate of title or salvage title shall contain
substantially the same information as required on a certificate of title
issued under K.S.A. 8-135, and amendments thereto, and other infor-
mation the director deems necessary.

      (e)  (1) A nonhighway certificate of title or salvage title may be trans-
ferred in the same manner and under the same conditions as prescribed
by K.S.A. 8-135, and amendments thereto, for the transfer of a certificate
of title, except as otherwise provided in this section. A nonhighway cer-
tificate of title or salvage title may be assigned and transferred only while
the vehicle remains a nonhighway vehicle or salvage vehicle.

      (2) Upon transfer or sale of a nonhighway vehicle which has been
rebuilt or restored or is otherwise in a condition which will allow the
registration of such vehicle, the owner shall assign the nonhighway cer-
tificate of title to the purchaser, and the purchaser shall obtain a certifi-
cate of title and register such vehicle as provided in K.S.A. 8-135, and
amendments thereto. No regular certificate of title shall be issued for a
vehicle for which there has been issued a nonhighway certificate of title
until there has been compliance with K.S.A. 8-116a, and amendments
thereto.

      (3) Upon transfer or sale of a salvage vehicle which has been rebuilt
or restored or is otherwise in a condition which will allow the registration
of such vehicle, the owner shall assign the salvage title to the purchaser,
and the purchaser shall obtain a rebuilt salvage title and register such
vehicle as provided in K.S.A. 8-135, and amendments thereto. No rebuilt
salvage title shall be issued for a vehicle for which there has been issued
a salvage title until there has been compliance with K.S.A. 8-116a, and
amendments thereto.

      (f) The owner of a salvage vehicle which has been issued a salvage
title and has been assembled, reconstructed, reconstituted or restored or
otherwise placed in an operable condition may make application to the
county treasurer for a permit to operate such vehicle on the highways of
this state over the most direct route from the place such nonhighway
salvage vehicle is located to a specified location named on the permit and
to return to the original location. No such permit shall be issued for any
vehicle unless the owner has motor vehicle liability insurance coverage
or an approved self-insurance plan under K.S.A. 40-3104, and amend-
ments thereto. Such permit shall be on a form furnished by the director
of vehicles and shall state the date the vehicle is to be taken to the other
location, the name of the insurer, as defined in K.S.A. 40-3103, and
amendments thereto, and the policy number or a statement that the ve-
hicle is included in a self-insurance plan approved by the commissioner
of insurance, a statement attesting to the correctness of the information
concerning financial security, the vehicle identification number and a de-
scription of the vehicle. Such permit shall be signed by the owner of the
vehicle. Permits issued under this subsection (f) shall be prepared in
triplicate. One copy shall be carried in the vehicle for which it is issued
and shall be displayed so that it is visible from the rear of the vehicle.
The second copy shall be retained by the county treasurer, and the third
copy shall be forwarded by the county treasurer to the division of vehicles.
The fee for such permit shall be $1 which shall be retained by the county
treasurer, who shall annually forward 25% of all such fees collected to
the division of vehicles to reimburse the division for administrative ex-
penses, and shall deposit the remainder in a special fund for expenses of
issuing such permits.

      (g) A nonhighway vehicle or salvage vehicle for which a nonhighway
certificate of title or salvage title has been issued pursuant to this section
shall not be deemed a motor vehicle for the purposes of K.S.A. 40-3101
to 40-3121, inclusive, and amendments thereto, except when such vehicle
is being operated pursuant to subsection (f). Any person who knowingly
makes a false statement concerning financial security in obtaining a per-
mit pursuant to subsection (f), or who fails to obtain a permit when re-
quired by law to do so is guilty of a class C misdemeanor.

      (h) Any person who, on July 1, 1996, is the owner of an all-terrain
vehicle, as defined in K.S.A. 8-126, and amendments thereto, shall not
be required to file an application for a nonhighway certificate of title
under the provisions of this section for such all-terrain vehicle, unless the
person transfers an interest in such all-terrain vehicle.

      Sec.  6. K.S.A. 8-199 is hereby amended to read as follows: 8-199. (a)
Except as provided in subsection (b), it shall be unlawful for any person
to sell or transfer the ownership of any nonhighway vehicle or salvage
vehicle, unless such person shall give to the purchaser thereof an assigned
nonhighway certificate of title or salvage title.

      (b) The sale or transfer of ownership of a nonhighway vehicle or sal-
vage vehicle shall include the acquisition of any such vehicle by an insurer,
as defined by K.S.A. 40-3103, and amendments thereto, from any person
upon payment of consideration therefor in satisfaction of such insurer's
obligation under a policy of motor vehicle insurance but the transferor of
a vehicle for which a title has been issued under K.S.A. 8-135, and amend-
ments thereto, shall not be required to obtain a nonhighway certificate of
title or salvage title for such vehicle and may assign to the insurer the
certificate of title issued pursuant to K.S.A. 8-135, and amendments
thereto. It shall be unlawful for any insurer to sell or attempt to sell any
nonhighway vehicle or salvage vehicle, through power of attorney or oth-
erwise, unless such insurer shall obtain a nonhighway certificate of title
or salvage title issued in the name of the insurer.

      (c) Any person, firm, company, corporation, partnership, association
or other legal entity who violates the provisions of this section shall be
guilty of a class C misdemeanor.

      (d) Nothing in this act shall be construed as relieving any person of
the payment of the tax imposed on the sale of a motor vehicle pursuant
to K.S.A. 79-3603, and amendments thereto.

      Sec.  7. K.S.A. 1999 Supp. 8-1,137 is hereby amended to read as fol-
lows: 8-1,137. (a) Except as provided in section 1, and amendments
thereto, if any vehicle for which a certificate of title has been issued shall
be dismantled, disassembled or recycled by selling such vehicle to a scrap
processor for recycling after the salvageable parts have been removed by
a licensed salvage vehicle dealer as defined in K.S.A. 8-2401, and amend-
ments thereto, such dealer shall surrender the original or duplicate title
to the division with the word salvage or junk written or stamped across
its face and no certificate of title of any type shall be issued nor any
registration allowed again for such vehicle.

      (b) When any major component part, as defined in K.S.A. 8-2401,
and amendments thereto, is sold by a licensed salvage vehicle dealer to
a licensed vehicle dealer, a sales receipt and a copy of the vehicle title
must accompany such major component part as proof of legal possession.
Any major component part, as defined in K.S.A. 8-2401, and amendments
thereto, sold by a licensed salvage dealer to any other person shall be
accompanied by a bill of sale and a copy of the vehicle title as proof of
legal possession of such major component part.

 Sec.  8. K.S.A. 8-199 and 8-1,136 and K.S.A. 1999 Supp. 8-116a, 8-
135, 8-197, 8-198 and 8-1,137 are hereby repealed.
 Sec.  9. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 6, 2000.
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