Iowa-2017-HF2437-Introduced
House File 2437 - Introduced
HOUSE FILE
BY COMMITTEE ON LOCAL
GOVERNMENT
(SUCCESSOR TO HSB 56)
(COMPANION TO LSB
1984SV BY COMMITTEE ON
TRANSPORTATION)
A BILL FOR
1 An Act relating to the notation of discharges of motor vehicle
2 security interests.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 1984HV (3) 87
ns/rh
PAG LIN
1 1 Section 1. Section 321.50, subsection 5, paragraph a, Code
1 2 2018, is amended to read as follows:
1 3 a. When a security interest is discharged, the holder shall
1 4 note a cancellation of the security interest on the face of the
1 5 certificate of title over the holder's signature and or may
1 6 note the cancellation of the security interest on a separate,
1 7 notarized release form or letter. The holder shall deliver the
1 8 certificate of title and the form or letter, if applicable, to
1 9 the county treasurer where the title was issued. In the case
1 10 of a security interest that has been delivered by electronic
1 11 means, the holder shall notify the department or the county
1 12 treasurer, in a manner prescribed by the department, of the
1 13 release of the security interest. The county treasurer shall
1 14 immediately note the cancellation of the security interest on
1 15 the face of the certificate of title, if applicable, and in
1 16 the county records system. The county treasurer shall on the
1 17 same day deliver the certificate of title, if applicable, and
1 18 the separate, notarized release form or letter, if applicable,
1 19 to the then first secured party or, if there is no such
1 20 person, to the person as directed by the owner, in writing,
1 21 on a form prescribed by the department or, if there is no
1 22 person designated, then to the owner. The cancellation of
1 23 the security interest shall be noted on the certificate of
1 24 title by the county treasurer without charge. The holder of a
1 25 security interest discharged by payment who fails to release
1 26 the security interest within fifteen days after being requested
1 27 in writing to do so shall forfeit to the person making the
1 28 payment the sum of twenty=five dollars.
1 29 EXPLANATION
1 30 The inclusion of this explanation does not constitute agreement with
1 31 the explanation's substance by the members of the general assembly.
1 32 Current law provides that when a security interest on a motor
1 33 vehicle is discharged, other than a security interest that has
1 34 been delivered by electronic means, the holder is required to
1 35 note the cancellation of the security interest on the face of
2 1 the vehicle's certificate of title over the holder's signature
2 2 and deliver the certificate of title to the county treasurer
2 3 where the title was issued.
2 4 This bill permits the holder of the security interest to
2 5 instead note the cancellation of the security interest on a
2 6 separate, notarized release form or letter and deliver the form
2 7 or letter along with the certificate of title to the county
2 8 treasurer where the title was issued. The county treasurer
2 9 must then deliver the certificate of title and the form or
2 10 letter to the first secured party, the owner, or the owner's
2 11 designee, as applicable.
LSB 1984HV (3) 87
ns/rh