Brief⁽¹⁾

H.B. 2689 relates to: the timely delivery of certificates of title and manufacturer's statements of origin; fees for motor vehicle certificates of title; and the verification of vehicle identification numbers (VIN) on program cars.

Timely Delivery of Certificates of Title and Manufacturer's Statement of Origin. The bill provides that if a person reaffirms a motor vehicle sale on a statement provided by the Division of Vehicles which advises such person of his rights, that person cannot void or set aside the sale if the dealer does not furnish the title or manufacturer's statement of origin in a timely manner. In these instances, the buyer cannot declare the sale fraudulent and void for that reason alone.

Fees for Motor Vehicle Certificates of Title. These provisions would impose an additional $3 fee for a certificate of title issued by the Division of Vehicles for a repossessed vehicle. The additional fee would be deposited in the Repossessed Certificates of Title Fee Fund in the Department of Revenue created by the bill. All moneys credited to the Fund would be used by the Department of Revenue for funding the administration, operations, and personnel associated with the processing of certificates of title for repossessed vehicles.

Verification of VIN. The bill authorizes an employee of a new vehicle dealer, who has received training from the Highway Patrol in accordance with rules and regulations adopted by the Superintendent of the Highway Patrol, to verify the VIN. Such employee could provide VIN checks on motor vehicles repurchased or reacquired by the manufacturer and purchased by a new vehicle dealer, commonly known as "program cars."

Background

H.B. 2689, as introduced, was requested by the Kansas Automobile Dealers Association (KADA). The spokesperson for KADA testified that under current law a person may accept title after 30 days but rescind the sale because title was not received within the 30-day statutory time period. He added that titles are sometimes difficult to obtain when the document is held by a lienholder in another state.

The Assistant Attorney General appeared in opposition to the bill. He stated current law gives a consumer the right to receive title to a vehicle he or she purchases within 30 days and without this right, a consumer cannot register or drive the vehicle. He added that, in any case, consumers would still have to make car and insurance payments and pay property taxes. The Assistant Attorney General proposed an amendment which would require the customer to sign a form provided by the Division of Vehicles which states that the customer will not set aside the sale even though title or manufacturer's statement of origin is delivered after 30 days. The other amendment was contained in H.B. 2849. This amendment would allow a vehicle owner to complete a form of the Division of Vehicles indicating that the owner has sold his or her vehicle. Upon filing the form the owner of the vehicle would be released of liability after the sale.

The Department of Revenue anticipates that the cost to produce the form to reaffirm a motor vehicle sale by a consumer will be minimal. The filing of the form by a vehicle owner who assigns a title or a manufacturer's statement of origin is optional. The Department estimates 190,000 title transfer applications are processed annually by the Division of Vehicles. The Department estimates that about 50 percent of these applicants could choose to file the form which would result in 95,000 forms having to be processed. The Department reports that the Title and Registration Bureau will need two additional Office Assistants III to handle expected volume at a total cost of $50,700 annually. The two positions will also require a total of fiscal year 1999 one-time operating expenditures of $11,600 and fiscal year 1999 annual other operating expenditures (for telephones) of $552.

Senate Committee amendments:

• remove the provisions in Section 12 of the bill which would have allowed a vehicle owner who assigns a title or manufacturer's statement of origin to another party to file a form with the Division of Vehicles indicating that the vehicle had been assigned to another person;



• add provisions which would impose a $3 fee for groups wishing to process titles in Kansas for repossessed vehicles; and



• include provisions which would allow motor car dealer employees with training from the Highway Patrol to conduct VIN checks on program cars.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.