Bill Text: MS SB2856 | 2026 | Regular Session | Introduced
Bill Title: Motor vehicles; prevent perfection of security interest in when subject to statutory possessory lien.
Sponsorship: Partisan Bill (Republican 4)
Status: (Failed) 2026-02-03 - Died In Committee [SB2856 Detail]
Download: Mississippi-2026-SB2856-Introduced.html
MISSISSIPPI LEGISLATURE
2026 Regular Session
To: Finance
By: Senator(s) Seymour, Younger, England, Carter
Senate Bill 2856
AN ACT TO AMEND SECTION 63-21-43, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A SECURITY INTEREST IN A MOTOR VEHICLE MAY NOT BE PERFECTED WHILE THE VEHICLE IS SUBJECT TO A VALID STATUTORY POSSESSORY LIEN; TO REQUIRE A SECURED PARTY SEEKING TO PERFECT A SECURITY INTEREST TO CERTIFY TO THE DEPARTMENT OF REVENUE THAT NO SUCH POSSESSORY LIEN EXISTS OR OBTAIN WRITTEN CONSENT FROM THE HOLDER OF SUCH A LIEN; TO PROVIDE THAT ANY SECURITY INTEREST FILED IN VIOLATION OF THIS ACT SHALL BE UNPERFECTED AGAINST THE HOLDER OF THE POSSESSORY LIEN AND SUBORDINATE IN PRIORITY TO THAT LIEN; TO BRING FORWARD SECTIONS 63-21-16, 75-9-333, 85-7-107 AND 85-7-251, MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 63-21-43, Mississippi Code of 1972, is amended as follows:
63-21-43. (1) Unless excepted by Section 63-21-41, a security interest in a vehicle, manufactured home or mobile home of a type which a certificate of title is required is not valid against creditors of the owner or subsequent transferees or lienholders of the vehicle, manufactured home or mobile home unless perfected as provided in this chapter.
(2) (a) A security interest is perfected at the time the owner signs a security agreement describing the vehicle, manufactured home or mobile home, the secured party gives value, the owner has rights in the vehicle, manufactured home or mobile home, and an application for certificate of title signed by the owner is presented to a designated agent; provided, however, that a purchase money security interest under Chapter 9, Title 75 (Uniform Commercial Code - secured transactions) in a mobile home or a manufactured home is perfected against the rights of judicial lien creditors and execution creditors on and after the date such purchase money security interest attaches.
(b) The designated
agent shall deliver to the department * * * the existing certificate of title,
if any, an application for a certificate of title containing the name and
address of the lienholder and the date of his security agreement, and the
required fee, but the security interest will perfect at the time the
requirements of subsection (2)(a) of this section are met.
(3) If a vehicle, manufactured home or mobile home is subject to a security interest when brought into this state, the validity of the security interest is determined by the law of the jurisdiction where the vehicle, manufactured home or mobile home was when the security interest attached, subject to the following:
(a) If the parties understood at the time the security interest attached that the vehicle, manufactured home or mobile home would be kept in this state and it was brought into this state within thirty (30) days thereafter for purposes other than transportation through this state, the validity of the security interest in this state is determined by the law of this state.
(b) If the security interest was perfected under the law of the jurisdiction where the vehicle, manufactured home or mobile home was when the security interest attached, the following rules apply:
(i) If the name of the lienholder is shown on an existing certificate of title issued by that jurisdiction, his security interest continues perfected in this state.
(ii) If the name of the lienholder is not shown on an existing certificate of title issued by that jurisdiction the security interest continues perfected in this state for four (4) months after a first certificate of title of the vehicle, manufactured home or mobile home is issued in this state, and also thereafter if, within the period of four (4) months, it is perfected in this state. The security interest may also be perfected in this state after the expiration of the period of four (4) months, in which case perfection dates from the time of perfection in this state.
(c) If the security interest was not perfected under the law of the jurisdiction where the vehicle, manufactured home or mobile home was when the security interest attached, it may be perfected in this state, in which case perfection dates from the time of perfection in this state.
(d) A security
interest may be perfected under paragraph (b)(ii) or paragraph (c) of this
subsection, either as provided in subsection (2), or by the holder of the lien
created out of this state delivering to a county tax collector or a designated
agent a notice of security interest in the form the department * * * prescribes, together with documents
to support the security interest as required by the department * * * and the required fee. The county
tax collector or a designated agent shall process said notice in the manner
prescribed by the department * * *.
(4) Notwithstanding any other provision of this section, a security interest in a motor vehicle may not be perfected while the vehicle is subject to a valid statutory possessory lien, including a lien arising under Section 85-7-107 or 85-7-251. A secured party seeking to perfect a security interest in a motor vehicle must certify to the department that no such possessory lien exists or obtain written consent from the holder of such a lien. Any security interest filed in violation of this subsection shall be unperfected against the holder of the possessory lien and subordinate in priority to that lien.
SECTION 2. Section 63-21-16, Mississippi Code of 1972, is brought forward as follows:
63-21-16. (1) All designated agents appointed by the department under Section 63-21-13 may electronically transmit to the department information entered by them on applications for a certificate of title given in connection with the sale or transfer of a motor vehicle, manufactured home or mobile home or a loan for which the owner's motor vehicle, manufactured home or mobile home is pledged to that institution as collateral for the loan. The format and the data required to be transmitted shall be established by the department. Transmission of data shall meet minimum criteria and edits established by the department equal to any edit presently existing in the statewide title registration system, or as may be established, to which the county tax collectors shall also conform. All data transmitted must successfully pass edits established by the department, including lienholder name, mailing address and lienholder account number assigned to a lienholder by the department to identify the lienholder, for the purpose of causing the data to appear in the certificate of title for which the application is made.
(2) It shall be the responsibility of the designated agent to verify all data before it is electronically transmitted. It shall also be the responsibility of the designated agent to ensure that the required certification of designated agent and the certification of statement of facts that are contained on the application for certificate of title appear above the signatures of both the owner and the authorized representative of the designated agent. Data which cannot be transmitted because of error shall be corrected by the designated agent when the statewide title registration system indicates that the data is erroneous or is not valid for the purposes of titling the motor vehicle, manufactured home or mobile home or for transfer of the data.
(3) When an institution has agreed to loan money for the purchase of a motor vehicle, manufactured home or mobile home, the institution shall complete an application for certificate of title or require the borrower to provide to the institution the copy of the application for certificate of title contained in the application packet which is designated "Lienholder's Copy" according to provisions of the Motor Vehicle and Manufactured Housing Title Law, which the owner will receive from the county tax collector or any designated agent upon completion of the application for title and registration process.
(4) An application for certificate of title originating from a designated agent shall be entered on the statewide title registration system by the originating lending institution when the transaction is for the purpose of perfecting the institution's interest in a vehicle, manufactured home or mobile home currently owned or purchased by the applicant, in connection with application for certificate of title or the purchase of a license tag or both.
(5) When an institution in this state adds a second lien on a certificate of title in possession of a first lienholder institution in this state, the second lienholder institution seeking to be shown on the certificate of title shall:
(a) Prepare the application for certificate of title in accordance with the requirements of Sections 63-21-15 and 63-21-45(1)(c);
(b) Obtain all required signatures; and
(c) Forward the completed application for certificate of title to the first lienholder together with any necessary remittance advice, a check for the title fee payable to the department and a cover letter to the first lienholder requesting that the first lienholder attach the certificate of title to the required documents sent by the second lienholder and then forward the application, certificate of title and required documents to the department.
(6) Upon receipt of the application for certificate of title from the second lienholder institution to record the second lien, the first lienholder institution shall compare the data contained in the application for certificate of title to the information contained in the original certificate of title. If the first lienholder institution is satisfied as to the ownership, accuracy and order of priority of liens as shown in the application, it shall enter the data contained on the application for certificate of title prepared by the second lienholder on the statewide title registration system, including the designated agent number of the second lienholder. After entering the data from the application for certificate of title, the first lienholder institution shall immediately forward the application for certificate of title with the certificate of title attached to the application, the remittance advice and the second lienholder's check for the title fee to the department within three (3) working days.
(7) In an assignment of lien pursuant to Section 63-21-47, the assignee shall receive the notice of assignment along with the current title attached and with the assignors interest open. The assignee lienholder shall prepare an application for certificate of title according to the notice of assignment, showing the assignee institution as the lienholder, and then shall electronically transmit the data to the department. The completed application shall be forwarded to the department within three (3) working days.
(8) The department, upon receipt of applications for certificate of title, shall verify the data by accessing it on the statewide title registration system by the title application control number appearing on the application for title. After receiving verification that is satisfactory to the department that the data necessary for the issuance of a new certificate of title exists, the department shall issue a new certificate of title that records the interests of all the parties named in the application for certificate of title.
(9) Designated agents shall be connected to the statewide title registration system for the purpose of electronic transfer of applications for certificate of title data in the order of priority established by the department.
(10) If a participating designated agent fails to comply with the provisions of this section or the rules adopted by the department to implement this section, the department may impose a penalty of Twenty-five Dollars ($25.00) for each instance of noncompliance. Any penalty imposed under this section not paid within thirty (30) days after a notice is given shall be subject to collection from the bond of the designated agent that is required to be provided under the provisions of Section 63-21-13(3). The penalty provided shall also be assessable, due and collectible from any licensed motor vehicle dealer or manufactured home or mobile home dealer for failure to accept an application for certificate of title for each and every vehicle, manufactured home or mobile home he sells to a consumer. These penalties shall be cumulative, supplemental and in addition to the penalties provided by any other law.
(11) This section shall apply to all designated agents appointed by the department under Section 63-21-13, that choose to electronically transmit information on applications for certificates of title to the department. This section shall not apply to other designated agents.
(12) Notwithstanding the foregoing, the department shall not issue a certificate of title to a manufactured home or mobile home with respect to which title has been retired to real property under Section 63-21-30 unless with respect to the same manufactured home or mobile home title has been severed from real property pursuant to Section 63-21-30.
(13) Notwithstanding any requirement in this chapter that a lien on a motor vehicle or manufactured home shall be noted on the face of the certificate of title, if there are one or more liens or encumbrances on the motor vehicle or manufactured home, the department may electronically transmit the lien to the first lienholder and notify the first lienholder of any additional liens. Subsequent lien satisfactions may be electronically transmitted to the department and shall include the name and address of the person satisfying the lien. When electronic transmission of liens and lien satisfactions is used, a certificate of title need not be issued until the last lien is satisfied and a clear certificate of title is issued to the owner of the motor vehicle or manufactured home. When a motor vehicle is subject to an electronic lien, the certificate of title for the motor vehicle shall be considered to be physically held by the lienholder for purposes of compliance with state or federal odometer disclosure requirements. A duly certified copy of the department's electronic record of the lien shall be admissible in any civil, criminal, or administrative proceeding in this state as evidence of the existence of the lien.
(14) Any lienholder with a federal Employer Identification Number (EIN) must electronically transmit the satisfaction and release and discharge of a lien on a motor vehicle to the department not later than fourteen (14) days after the date of satisfaction of the lien. The failure of any such lienholder to comply with the requirements of this subsection shall be a violation of this chapter. Any such lienholder who knowingly and willfully fails to transmit the satisfaction and release and discharge of a lien on a motor vehicle within fourteen (14) days after the date of the satisfaction of the lien shall be in violation of this section, and subject to a civil penalty of up to Two Hundred Fifty Dollars ($250.00) per violation, which shall be in addition to any other penalty provided in this chapter. In addition, the lienholder shall be liable for any attorney's fees, legal fees and/or other fees and costs incurred by a person in any action necessary to discharge and/or release a lien or otherwise affecting a lien for which the lienholder failed to transmit the required information.
(15) Notwithstanding any other provision of this chapter to the contrary, if a lien on a motor vehicle is older than eight (8) years from the date the lien was placed on the motor vehicle, the lien shall be recorded by the department in the automated statewide motor vehicle registration system as having been satisfied and released and discharged, unless annually recertified by the lienholder by utilizing the format and transmitting the data required by the department.
SECTION 3. Section 75-9-333, Mississippi Code of 1972, is brought forward as follows:
75-9-333. (a) In this section, "possessory lien" means an interest, other than a security interest or an agricultural lien:
(1) Which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person's business;
(2) Which is created by statute or rule of law in favor of the person; and
(3) Whose effectiveness depends on the person's possession of the goods.
(b) A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute that expressly provides otherwise.
SECTION 4. Section 85-7-107, Mississippi Code of 1972, is brought forward as follows:
85-7-107. All motor vehicles repaired for any person, and at his instance, shall be liable for the price of the labor and material employed in constructing, manufacturing or repairing the same; and the mechanic to whom the price of said labor and material may be due shall have the right to retain possession of such motor vehicles so repaired until the price be paid. If such price shall not be paid within thirty (30) days, and the person to whom such charges are payable and owing intends to commence suit as provided in this section, such person shall notify, by certified mail, the legal owner and the holder of any lien of the amount of charges due thereon and provide an opportunity for redemption. If such property has not been redeemed within five (5) days after the mailing of such certified letter, the person to whom such charges are payable and owing may commence suit in any court of competent jurisdiction, and upon proof of the value of the labor and materials employed in such repairs, manufacture or construction, and that such labor and materials furnished were reasonably necessary to prevent deterioration, permit operation and preserve the property, shall be entitled to judgment against the party for whom such labor was done or materials furnished, with costs, as in other cases, and to a special order for the sale of the property retained in his possession for the payment thereof, with costs, and to an execution, as in other cases, for the residue of what remains unpaid after sale of the property. The proceeds of the sale of such property in excess of the amount needed to pay the judgment and necessary expenses of the procedure required by this section shall be held by the person for a period of six (6) months, and if not reclaimed by the owner thereof within that time shall become the property of the county and be paid over to the chancery clerk of the county in which the sale was held to be deposited into the county general fund, subject however to any rights of recorded lienholders.
SECTION 5. Section 85-7-251, Mississippi Code of 1972, is brought forward as follows:
85-7-251. (1) The owner of a motor vehicle that has been towed at his request or at the direction of a law enforcement officer, or towed upon request of a real property owner upon whose property a vehicle has been left without permission of the real property owner, shall be liable for the reasonable price of towing and storage of such vehicle; and the towing company to whom the price of such labor and storage costs may be due shall have the right to retain possession of such motor vehicle until the price is paid.
(2) Within twenty-four (24) hours, the towing company shall report to the local law enforcement agency having jurisdiction any vehicle that has been towed unless the vehicle was towed at the request of the owner of the vehicle. If the owner of a towed vehicle has not contacted the towing company within five (5) business days of the initial tow, the towing company shall obtain from the appropriate authority the names and addresses of any owner and lienholder. If the information from the appropriate authority fails to disclose the owner or lienholder, a good faith effort shall be made by the towing company to locate ownership, including a check for tag information, inspection sticker, or any papers in the vehicle that may indicate ownership. Upon location of the owner and lienholder, the towing company shall notify them by registered mail of the amount due for towing, postmarked no later than the tenth day following the initial tow. If such amount shall not be paid within thirty (30) days from the initial tow, the towing company to whom such charges are payable shall notify by certified mail any legal owner and holder of any lien, as disclosed by the motor vehicle title records or other investigation, of notice of sale of the property. If such property has not been redeemed within ten (10) days after the mailing of the certified letter, the towing company may commence sale of the property at public auction. The towing company shall publish for two (2) consecutive weeks a notice of sale in the newspaper having circulation in the county where the vehicle was initially towed. The proceeds of the sale of such property in excess of the amount needed to pay the towing, reasonable storage and necessary expenses of the procedures required by this section shall be held by the towing company for a period of six (6) months, and, if not reclaimed by the owner thereof within such time, shall become the property of the county and be paid to the chancery clerk of the county in which the sale was held to be deposited into the county general fund, subject, however, to any rights of the recorded lienholder.
(3) The failure to make a good faith effort to comply with the requirements of this section shall preclude the imposition of any storage charges or towing charges against the towed vehicle.
(4) Every towing company shall maintain accurate records for a period of three (3) years, which records shall identify the vehicles it has towed and stored and all procedures that it has taken to comply with the provisions of this chapter.
SECTION 6. This act shall take effect and be in force from and after July 1, 2026.
