Vehicles: title; requirements for transfer of title by a dealer; provide for. Amends 14, 41a, 78,…

Full Bill Text

HOUSE BILL NO. 5356 A bill to amend 1949 PA 300, entitled "Michigan vehicle code," by amending sections 14, 41a, 78, 217, 217c, 233, 233a, 233b, 234, 238, 239, 240, 248, 248a, 248j, 249, 250, 258, 801b, 806, and 810a (MCL 257.14, 257.41a, 257.78, 257.217, 257.217c, 257.233, 257.233a, 257.233b, 257.234, 257.238, 257.239, 257.240, 257.248, 257.248a, 257.248j, 257.249, 257.250, 257.258, 257.801b, 257.806, and 257.810a), sections 14, 217c, 248, and 250 as amended by 2022 PA 224, section 41a as amended by 1998 PA 384, sections 217 and 233a as amended by 2023 PA 240, section 233 as amended by 2014 PA 290, section 233b as amended by 2002 PA 642, section 234 as amended by 2002 PA 552, section 238 as amended by 2014 PA 291, section 239 as amended by 2020 PA 382, section 240 as amended by 2004 PA 493, section 248a as amended by 2012 PA 498, section 248j as added by 2002 PA 652, section 249 as amended by 2004 PA 495, section 258 as amended by 2018 PA 74, section 801b as amended by 1986 PA 311, section 806 as amended by 2023 PA 129, and section 810a as amended by 1993 PA 300, and by adding section 9b. the people of the state of michigan enact: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Sec. 9b. "Courtesy transportation vehicle" means a new motor vehicle that has been titled and registered by a dealer and is used primarily for the dealer's service customers. After the courtesy transportation vehicle is used more than 5,000 miles, the vehicle is a used vehicle. Sec. 14. (1) Except as provided in subsections (2), (3), and (4), "established place of business" means premises actually occupied either continuously or at regular periods by a dealer or manufacturer at which the dealer or manufacturer keeps its books and records and at which the dealer or manufacturer transacts a large share of its business. (2) For a class (a) or class (b) dealer, "established place of business" means premises that meet all of the following requirements: (a) The premises contain, except as otherwise provided in this act, a permanently enclosed building or structure that is either owned, leased, or rented by the dealer; the building or structure is not a residence, tent, temporary stand, or any temporary quarters; the building or structure is continuously occupied in 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 good faith for the purpose of selling, buying, trading, leasing, or otherwise dealing in motor vehicles; all books, records, and files necessary to conduct the business of a class (a) or class (b) dealer are securely maintained in the building or structure; and the building or structure houses an office of at least 150 square feet in size, equipped with standard office furniture, secure document storage, working utilities, a working restroom, and a working telephone listed in the name of the business on the dealer's license. (b) The premises have land space of not less than 1,300 square feet to accommodate the display of a minimum of 10 vehicles of the kind and type that the dealer is licensed to sell and an additional 650 square feet for customer parking. (c) The display and customer parking areas described in subdivision (b) are adequately surfaced and well-lit during business hours. (d) The premises are identified by an exterior sign displaying the name of the dealership that is permanently affixed to the building or land with letters clearly visible from the roadway. (e) The premises contain a conspicuous posting of the dealer's regular hours of operation. The posted hours must not be less than 30 hours per week for not less than 48 weeks per year. Fifteen of the 30 hours per week must be between the hours of 8 a.m. and 5 p.m., Monday through Friday. The dealer may change its posted hours of operation to be less than 30 hours per week for not more than 4 weeks per year if the dealer notifies the department not less than 7 days prior to the change. The department shall waive the 7-day notification requirement under this subdivision for good cause, including, but not limited to, a medical emergency or other 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 extenuating circumstances. (f) The premises contain a registered repair facility on site for the repair and servicing of motor vehicles of a type sold at the established place of business, unless the dealer has entered into a written servicing agreement with a registered repair facility at a location that is located within a 10-mile radius of the established place of business. If repairs are conducted under a servicing agreement, the dealer shall conspicuously post the servicing agreement in the dealer's office. (g) The premises meet all applicable zoning requirements and any other applicable municipal requirements. (3) For a wholesaler, "established place of business" means premises that meet all of the following requirements: (a) The premises contain a permanently enclosed building or structure that is either owned, leased, or rented and is not a commercial mailbox, tent, temporary stand, or other temporary quarters. Beginning January 1, 2024, the permanently enclosed building or structure must be heated and electrified. (b) Until December 31, 2023, all books, records, and files necessary to conduct the business of the wholesaler are maintained in the building or structure described in subdivision (a). Beginning January 1, 2024, all books, records, and files necessary to conduct the business of the wholesaler are maintained in an office that meets all of the following requirements: ( i ) Is not less than 8 feet by 8 feet with a door. ( ii ) Has no fewer than 4 rigid walls. ( iii ) Has working utilities including, but not limited to, lighting and telephone that are listed in the name of the business on the wholesaler's license. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 ( iv ) Has a working restroom. ( v ) Has standard office furniture including, but not limited to, a desk and a locking filing cabinet. (c) The premises are not used for the display of vehicles. However, the premises may be used for the storage of vehicles purchased by the wholesaler before sale to a licensed vehicle dealer. (d) The premises are identified by an exterior sign displaying the name of the wholesaler that is permanently affixed to the building or land with letters clearly visible from the roadway. (e) The premises meet all applicable zoning requirements and any other applicable municipal requirements. (f) The premises contain a conspicuous posting of the wholesaler's regular hours of operation that include at least 15 regular business hours each week between the hours of 8 a.m. and 5 p.m., Monday through Friday. (g) If a wholesaler receives its initial license on or after January 1, 2023, the premises are not located within 200 feet of an established place of business for another licensed wholesaler. (4) For a used or secondhand vehicle parts dealer, vehicle scrap metal processor, vehicle salvage pool operator, distressed vehicle transporter, broker, and automotive recycler, "established place of business" means premises that meet all of the following requirements: (a) Beginning January 1, 2024, the premises contain a permanently enclosed building or structure that is heated and electrified and that is either owned, leased, or rented by the business and that is not a commercial mailbox, tent, temporary stand, or other temporary quarters. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 (b) Beginning January 1, 2024, all books, records, and files necessary to conduct the business of the dealer, processor, operator, transporter, broker, or recycler are maintained in an office that meets all of the following requirements: ( i ) Is not less than 8 feet by 8 feet with a door. ( ii ) Has no fewer than 4 rigid walls. ( iii ) Has working utilities including, but not limited to, lighting and telephone that are listed in the name of the business on the dealer's, processor's, operator's, transporter's, broker's, or recycler's license. ( iv ) Has a working restroom. ( v ) Has standard office furniture including, but not limited to, a desk and a locking filing cabinet. (c) The premises are identified by an exterior sign displaying the name of the dealer, processor, operator, transporter, broker, or recycler that is permanently affixed to the building or land with letters clearly visible from the roadway. (d) The premises meet all applicable zoning requirements and any other applicable municipal requirements. (e) The premises contain a conspicuous posting of the business's regular hours of operation. The posted hours must not be less than 15 hours per week for not less than 48 weeks per year. Five of the 15 hours per week must be between the hours of 8 a.m. and 5 p.m., Monday through Friday. Sec. 41a. "Police book" means a hardcover, bound volume or a an electronic record in a form prescribed by the secretary of state that provides a bought and sold record for each vehicle handled by a dealer, contains the information required by section 251, and includes any other information required by law or the secretary of 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 state. Sec. 78. "Used or second-hand vehicle" means any motor vehicle , except for a courtesy transportation vehicle, to which a certificate of title and license plates have been issued and which motor vehicle has been registered for use on the highways by a consumer or by a dealer. Sec. 217. (1) An owner of a vehicle that is subject to registration under this act shall apply to the secretary of state, on an appropriate form furnished by the secretary of state, for the registration of the vehicle and issuance of a certificate of title for the vehicle. A vehicle brought into this state from another state or jurisdiction that has a rebuilt, salvage, scrap, flood, or comparable certificate of title issued by that other state or jurisdiction must be issued a rebuilt, salvage, scrap, or flood certificate of title by the secretary of state. The application must be accompanied by the required fee. An application for a certificate of title must bear the signature or verification and certification of the owner. The application must contain all of the following: (a) The owner's name, the owner's bona fide residence, and either of the following: ( i ) If the owner is an individual, the owner's mailing address. ( ii ) If the owner is a firm, association, partnership, limited liability company, or corporation, the owner's business address. (b) A description of the vehicle including the make or name, style of body, and model year; the number of miles, not including the tenths of a mile, registered on the vehicle's odometer at the time of transfer; whether the vehicle is a flood vehicle or another state previously issued the vehicle a flood certificate of title; 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 whether the vehicle is to be or has been used as a taxi or police vehicle, or by a political subdivision of this state, unless the vehicle is owned by a dealer and loaned or leased to a political subdivision of this state for use as a driver education vehicle; whether the vehicle has previously been issued a salvage or rebuilt certificate of title from this state or a comparable certificate of title from any other state or jurisdiction; the vehicle identification number; and the vehicle's weight fully equipped, if a passenger vehicle registered in accordance with section 801(1)(a), and, if a trailer coach or pickup camper, in addition to the weight, the manufacturer's serial number, or in the absence of the serial number, a number assigned by the secretary of state. A number assigned by the secretary of state must be permanently placed on the trailer coach or pickup camper in the manner and place designated by the secretary of state. (c) A statement of the applicant's title and the names and addresses of the holders of security interests in the vehicle and in an accessory to the vehicle, in the order of their priority. (d) Further information that the secretary of state reasonably requires to enable the secretary of state to determine whether the vehicle is lawfully entitled to registration and the owner entitled to a certificate of title. If the secretary of state is not satisfied as to the ownership of a vehicle having a value over $2,500.00 , or $5,000.00 for a new vehicle dealer licensed under this act, or that is less than 10 years old, before registering the vehicle and issuing a certificate of title, the secretary of state may require the applicant to file a properly executed surety bond in a form prescribed by the secretary of state and executed by the applicant and a company authorized to conduct a surety business in 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 this state. The bond must be in an amount equal to twice the value of the vehicle as determined by the secretary of state and must be conditioned to indemnify or reimburse the secretary of state, any prior owner, and any subsequent purchaser or lessee of the vehicle and their successors in interest against any expense, loss, or damage, including reasonable attorney fees, because of the issuance of a certificate of title for the vehicle or on account of any defect in the right, title, or interest of the applicant in the vehicle. An interested person has a right of action to recover on the bond for a breach of the conditions of the bond, but the aggregate liability of the surety to all persons must not exceed the amount of the bond. If the secretary of state is not satisfied as to the ownership of a vehicle that is valued at $2,500.00 , or $5,000.00 for a new vehicle dealer licensed under this act, or less and that is 10 years old or older, the secretary of state shall require the applicant to certify that the applicant is the owner of the vehicle and entitled to register and title the vehicle. (e) Except as provided in subdivision (f), an application for a commercial vehicle must also have attached a scale weight receipt of the motor vehicle fully equipped as of the time the application is made. A scale weight receipt is not necessary if there is presented with the application a registration receipt of the previous year that shows on its face the empty weight of the motor vehicle as registered with the secretary of state that is accompanied by a statement of the applicant that there has not been structural change in the motor vehicle that has increased the empty weight and that the previous registered weight is the true weight. (f) An application for registration of a vehicle on the basis of elected gross weight must include a declaration by the applicant 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 specifying the elected gross weight for which application is being made. (g) If the application is for a certificate of title of a motor vehicle registered in accordance with section 801(1)(p), the application must include the manufacturer's suggested base list price for the model year of the vehicle. The base list price must be the manufacturer's suggested retail price as shown on the label required to be affixed to the vehicle under 15 USC 1232. If the manufacturer's suggested retail price is unavailable, the application must list the purchase price of the vehicle. As used in this subdivision, "purchase price" means that term as defined in section 801. (2) An applicant for registration of a leased pickup truck or passenger vehicle that is subject to registration under this act, except a vehicle that is subject to a registration fee under section 801g, shall disclose in writing to the secretary of state the lessee's name, the lessee's bona fide residence, and either of the following: (a) If the lessee is an individual, the lessee's Michigan driver license number or Michigan personal identification number or, if the lessee does not have a Michigan driver license or Michigan personal identification number, the lessee's mailing address. (b) If the lessee is a firm, association, partnership, limited liability company, or corporation, the lessee's business address. (3) The secretary of state shall maintain the information described in subsection (2) on the secretary of state's computer records. (4) Except as provided in subsections (5), (11), and (12), a 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 dealer selling, leasing, or exchanging vehicles required to be titled, within 21 days after delivering a vehicle to the purchaser or lessee, and a person engaged in the sale of vessels required to be numbered by part 801 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.80101 to 324.80199, within 21 days after delivering a boat trailer weighing less than 2,500 pounds to the purchaser or lessee, shall apply to the secretary of state for a new title, if required, and transfer or secure registration plates and secure a certificate of registration for the vehicle or boat trailer, in the name of the purchaser or lessee. Subject to subsection (11), the dealer's license may be suspended or revoked in accordance with section 249 for failure to apply for a title when required or for failure to transfer or secure registration plates and certificate of registration within the 21 days required by this section. Subject to subsection (11), if the dealer or person fails to apply for a title when required, and to transfer or secure registration plates and secure a certificate of registration and pay the required fees within 21 days of delivery of the vehicle or boat trailer, a title and registration for the vehicle or boat trailer may subsequently be acquired only on the payment of a late transfer fee of $50.00 for an individual or a dealer other than a dealer subject to section 235b in addition to the fees specified in section 806. Subject to subsection (11), for a used or secondhand vehicle dealer subject to section 235b, the late transfer fee is $100.00 in addition to the fees specified in section 806. The purchaser or lessee of the vehicle or the purchaser of the boat trailer shall sign the application, including, if applicable, the declaration specifying the maximum elected gross weight as required by subsection (1)(f), 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 and other necessary papers to enable the dealer or person to secure the title, registration plates, and transfers from the secretary of state. If the secretary of state mails or delivers a purchaser's certificate of title to a dealer, the dealer shall mail or deliver the certificate of title to the purchaser not later than 5 days after receiving the certificate of title from the secretary of state. However, as provided under section 238, the secretary of state is not required to issue a paper title to the owner of a vehicle or lienholder if the title is subject to a security interest, and may issue an electronic title as provided under section 222. (5) Except as provided in subsection (12), a dealer selling or exchanging an off lease or buy back vehicle shall apply to the secretary of state for a new title for the vehicle within not later than 21 days after it receives the certificate of title from the lessor or manufacturer under section 235 or section 235b and transfer or secure registration plates and secure a certificate of registration for the vehicle in the name of the purchaser. Subject to subsection (12), the dealer's license may be suspended or revoked in accordance with section 249 for failure to apply for a title when required or for failure to transfer or secure registration plates and certificate of registration within the 21-day period. Subject to subsection (12), if the dealer or person fails to apply for a title when required, and to transfer or secure registration plates and secure a certificate of registration and pay the required fees within the 21-day time period, a title and registration for the vehicle may subsequently be acquired only on the payment of a late transfer fee of $50.00 for an individual or dealer other than a used or secondhand vehicle dealer subject to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 section 235b in addition to the fees specified in section 806. Subject to subsection (12), the late transfer fee for a used or secondhand vehicle dealer subject to section 235b is $100.00 in addition to the fees specified in section 806. The purchaser of the vehicle shall sign the application, including, if applicable, the declaration specifying the maximum elected gross weight as required by subsection (1)(f), and other necessary papers to enable the dealer or person to secure the title, registration plates, and transfers from the secretary of state. If the secretary of state mails or delivers a purchaser's certificate of title to a dealer, the dealer shall mail or deliver the certificate of title to the purchaser not later than 5 days after receiving the certificate of title from the secretary of state. However, as provided under section 238, the secretary of state is not required to issue a paper title to the owner of a vehicle if the title is subject to a security interest, and may issue an electronic title as provided under section 222. (6) If a vehicle is delivered to a purchaser or lessee who has valid Michigan registration plates that are to be transferred to the vehicle, and an application for title, if required, and registration for the vehicle is not made before delivery of the vehicle to the purchaser or lessee, the registration plates must be affixed to the vehicle immediately, and the dealer shall provide the purchaser or lessee with an instrument in writing, on a form prescribed by the secretary of state, which serves as a temporary registration for the vehicle for a period of 30 days from the date the vehicle is delivered. (7) If the seller does not prepare the credit information, contract note, and mortgage, and the holder, finance company, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 credit union, or banking institution requires the installment seller to record the lien on the title, the holder, finance company, credit union, or banking institution shall pay the seller a service fee of not more than $10.00. The service fee must be paid from the finance charges and must not be charged to the buyer in addition to the finance charges. The holder, finance company, credit union, or banking institution shall issue its check or bank draft for the principal amount financed, payable jointly to the buyer and seller, and the following must be imprinted on the back side of the check or bank draft: "Under Michigan law, the seller must record a first lien in favor of (name of lender) _______________ on the vehicle with vehicle identification number _______________ and title the vehicle only in the name(s) shown on the reverse side." (8) On the front of the check or draft described under subsection (7), the holder, finance company, credit union, or banking institution shall note the name or names of the prospective owners. Failure of the holder, finance company, credit union, or banking institution to comply with these requirements frees the seller from any obligation to record the lien or from any liability that may arise as a result of the failure to record the lien. A service fee must not be charged to the buyer. (9) In the absence of actual malice proved independently and not inferred from lack of probable cause, a person who in any manner causes a prosecution for larceny of a motor vehicle; for embezzlement of a motor vehicle; for any crime an element of which is the taking of a motor vehicle without authority; or for buying, receiving, possessing, leasing, or aiding in the concealment of a stolen, embezzled, or converted motor vehicle knowing that the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 motor vehicle has been stolen, embezzled, or converted, is not liable for damages in a civil action for causing the prosecution. This subsection does not relieve a person from proving any other element necessary to sustain the person's cause of action. (10) Receipt by the secretary of state of a properly tendered application for a certificate of title on which a security interest in a vehicle is to be indicated is a condition of perfection of a security interest in the vehicle and is equivalent to filing a financing statement under the uniform commercial code, 1962 PA 174, MCL 440.1101 to 440.9994, with respect to the vehicle. When a security interest in a vehicle is perfected, it has priority over the rights of a lien creditor as that term is defined in section 9102 of the uniform commercial code, 1962 PA 174, MCL 440.9102. (11) Notwithstanding subsection (4), a dealer selling, leasing, or exchanging vehicles, required to be titled, after March 31, 2021 but before August 1, 2021, may apply to the secretary of state for a new title, if required, and transfer or secure registration plates and secure a certificate of registration for the vehicle in the name of the purchaser within 30 days. Both of the following apply to a dealer that complies with this subsection: (a) The dealer's license must not be suspended or revoked in accordance with section 249 for failure to apply for a title when required or for failure to transfer or secure registration plates and certificate of registration within the 21-day period required under subsection (4). (b) The secretary of state shall not charge any applicable late fees required under subsection (4) and shall, on the dealer's request, reimburse a late fee charged and collected after March 31, 2021 to the end of the period described under this subsection. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 (12) Notwithstanding subsection (5), a dealer selling or exchanging an off lease or buy back vehicle after March 31, 2021 but before August 1, 2021 may apply to the secretary of state for a new title for the vehicle within not later than 30 days after the dealer receives the certificate of title from the lessor or manufacturer under section 235 or 235b and transfer or secure registration plates and secure a certificate of registration for the vehicle in the name of the purchaser. Both of the following apply to a dealer that complies with this subsection: (a) The dealer's license must not be suspended or revoked in accordance with section 249 for failure to apply for a title when required or for failure to transfer or secure registration plates and certificate of registration within the 21-day period required under subsection (5). (b) The secretary of state shall not charge any applicable late fees required under subsection (5) and shall, on the dealer's request, reimburse a late fee charged and collected after March 31, 2021 to the end of the period described under this subsection. Sec. 217c. (1) The secretary of state may conduct periodic reviews of the records of a dealer to determine whether adequate notice is given to a transferee or lessee of a rebuilt salvage vehicle of that vehicle's prior designation as a salvage vehicle. The secretary of state may request an insurance company to provide copies of salvage title documents and claims reports involving major component parts to assist the secretary of state in monitoring compliance with this act. (2) Except for a late model vehicle that has been stolen and recovered and that has no major component part removed, missing, or destroyed, or damaged and not salvageable, an insurance company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 licensed to conduct business in this state that acquires ownership of a late model vehicle through the payment of a claim shall proceed under either of the following: (a) If the insurance company acquires ownership of the vehicle through payment of a total loss claim, the owner of the vehicle must shall assign the certificate of title to the insurance company , which shall do all of the following: ( i ) Surrender a properly assigned certificate of title to the secretary of state. ( ii ) If the estimated cost of repair, including parts and labor, is equal to or more than 75% but less than 91% of the predamaged actual cash value of the vehicle, apply for a salvage certificate of title, and if the estimated cost of repair, including parts and labor, is equal to or greater than 91% of the predamaged actual cash value of the vehicle, apply for a scrap certificate of title. The insurance company shall not sell the vehicle without first receiving a salvage or scrap certificate of title, which shall must be assigned to the buyer. An insurance company may assign a salvage or scrap certificate of the title only to an automotive recycler, used or secondhand vehicle parts dealer, foreign salvage vehicle dealer, or vehicle scrap metal processor. (b) If After the payment of a total loss claim for a vehicle, or if after payment of a total loss claim the insurance company permits the owner of the vehicle to retain ownership, the insurance company shall do all of the following: ( i ) If the estimated cost of repair, including parts and labor, is equal to or greater than 75% but less than 91% of the predamaged actual cash value of the vehicle , require each owner of the vehicle to sign an application for a salvage certificate of title, or if 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 the estimated cost of repair, including parts and labor, is equal to or greater than 91% of the predamaged actual cash value of the vehicle, require each owner of the vehicle to sign an application for a scrap vehicle certificate of title. ( ii ) Attach the owner's certificate of title to the application for a salvage or scrap certificate of title or have the owner certify that the certificate of title is lost. ( iii ) On behalf of the owner, apply to the secretary of state for a salvage or scrap certificate of title in the name of the owner. The owner shall not sell or otherwise dispose of the vehicle without first receiving a salvage or scrap certificate of title, which must be assigned to the buyer. An insurance company may assign a salvage or scrap certificate of title only to an automotive recycler, used or secondhand vehicle parts dealer, foreign salvage vehicle dealer, or vehicle scrap metal processor. (3) If an insurance company pays a claim for total loss to the owner or lienholder of record as kept by the secretary of state, or both, if applicable, of a vehicle but the owner or lienholder of record as kept by the secretary of state fails to surrender the certificate of title or other document necessary for the transfer of ownership of the vehicle to the insurance company within the expiration of not later than 30 days after the claim payment, the insurance company, without having obtained the surrender of the title or other document otherwise necessary for the transfer of ownership for the vehicle from the owner or lienholder of record as kept by the secretary of state, or both, if applicable, may apply to the secretary of state for a title as provided under this section. The insurance company shall, at the time of application, provide proof of the payment and that the insurance company has 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 requested in writing, by certified mail or by another commercially available delivery service providing proof of delivery, on at least 2 separate occasions that the owner or lienholder of record as kept by the secretary of state surrender to the insurance company the certificate of title or other document necessary for the transfer of ownership to the insurance company. The application must be signed under the penalty of perjury. Subject to subsection (2)(a)( ii ), upon on meeting the requirements of this subsection, the secretary of state shall issue to the insurance company the appropriate certificate of title free of all liens. Proof of payment of the claim is satisfied only by 1 of the following: (a) In the case of payment by check, either of the following: ( i ) A copy of the front and back of the endorsed check. ( ii ) Evidence that the check has cleared the account of the payer. (b) In the case of payment by electronic transfer, evidence that the payment was charged to the account of the payer. (4) Except as provided in subsection (3), if an insurance company acquires ownership of a vehicle other than a late model vehicle through payment of damages due to an accident, the company shall surrender a properly assigned title to the buyer upon on delivery. (5) If a dealer acquires ownership of a late model vehicle that is a distressed vehicle from an owner, the dealer shall receive an assigned certificate of title. If the assigned certificate of title is not a salvage or scrap certificate of title, the dealer, other than a licensed vehicle scrap metal processor, licensed used parts dealer, or licensed automotive recycler that dismantles or sells the vehicle to a vehicle scrap 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 metal processor, shall surrender the assigned certificate of title to the secretary of state, and if the estimated cost of repair, including parts and labor, is equal to or greater than 75% but less than 91% of the predamaged actual cash value of the vehicle, apply for a salvage certificate of title, or if the estimated cost of repair, including parts and labor, is equal to or greater than 91% of the predamaged actual cash value of the vehicle, apply for a scrap certificate of title within not later than 5 days after the dealer receives the assigned certificate of title. The dealer may sell a salvage vehicle to another licensed automotive recycler, licensed used or secondhand vehicle parts dealer, licensed foreign salvage vehicle dealer, or licensed vehicle scrap metal processor by assigning the salvage certificate of title to the buyer. Unless the vehicle is rebuilt, inspected, and recertified under this section, if the vehicle is sold to a buyer other than a licensed dealer, application must be made for a salvage certificate in the name of the buyer in the manner provided in this act. The dealer may sell a scrap vehicle only to a licensed automotive recycler, licensed used or secondhand vehicle parts dealer, or licensed vehicle scrap metal processor. A licensed automotive recycler, licensed used or secondhand vehicle parts dealer, or licensed vehicle scrap metal processor shall surrender an assigned certificate of title to the secretary of state within not later than 30 days after acquiring a vehicle for which a certificate of title was received. A licensed automotive recycler, licensed used or secondhand vehicle parts dealer, or licensed vehicle scrap metal processor shall surrender an assigned salvage or scrap certificate of title to the secretary of state within not later than 30 days after acquiring a vehicle for which a salvage or scrap certificate 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 of title was received and processed, and report that the vehicle was destroyed or scrapped. As used in this subsection, "licensed" means granted 1 or more dealer licenses by the secretary of state under section 248(8). (6) An application for a scrap certificate of title must be made on a form prescribed by the secretary of state and accompanied by a fee of $15.00. The application must contain all of the following: (a) The complete name and current address of the owner. (b) A description of the vehicle, including its make, style of body, model year, fee category or weight, color, and vehicle identification number. (c) If the vehicle is a late model vehicle, a A listing of each major component part that was not salvageable. (d) Further information as may reasonably be required by the secretary of state. (7) The scrap certificate of title must authorize the holder of the document to transport but not drive on a highway the vehicle or parts of a vehicle, and assign ownership to a vehicle scrap metal processor, automotive recycler, used or secondhand vehicle parts dealer, or foreign salvage vehicle dealer. A certificate of title must not again be issued for this vehicle. A person shall not rebuild or repair a scrap vehicle and allow it to retain the original vehicle identification number. (8) If a person, other than a dealer or insurance company that is subject to subsection (2) or (5), acquires ownership of a distressed , late model vehicle, the person must surrender the title or assigned certificate of title to the secretary of state, and if the estimated cost of repair, including parts and labor, is 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 equal to or greater than 75% but less than 91% of the predamaged actual cash value of the vehicle, apply for a salvage certificate of title, or if the estimated cost of repair, including parts and labor, is equal to or greater than 91% of the predamaged actual cash value of the vehicle, apply for a scrap certificate of title before the vehicle may be transported. (9) An owner of a vehicle may determine that a vehicle is a scrap vehicle or a salvage vehicle without making any determination as to the actual cash value of the vehicle. (10) If a leasing company, vehicle manufacturer, insurance company not licensed to do business in this state, association, repossession company, self-insured owner, financial institution, governmental entity, or other company, institution, or entity, owns a distressed , late model vehicle, the titleholder shall surrender the title or assigned certificate of title to the secretary of state and apply for a salvage certificate of title if the retail cost of repair, including parts and labor, is equal to or greater than 75% but less than 91% of the predamaged actual cash value of the vehicle, or if the retail cost of repair, including parts and labor, is equal to or greater than 91% of the predamaged actual cash value of the vehicle, apply for a scrap certificate of title, before the vehicle may be transported or sold. If ownership is transferred, the owner must sell the vehicle only to a dealer that is eligible to buy a salvage or scrap vehicle in this state unless the owner complies with subsection (13). When a leasing company, vehicle manufacturer, insurance company not licensed to do business in this state, association, repossession company, self-insured owner, financial institution, governmental entity, or other company, institution, or entity, estimates the repair of a 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 distressed , late model vehicle for the purpose of determining whether to apply for a salvage or scrap certificate of title, a complete record of the estimate and, if the vehicle is repaired before a transfer of ownership, a complete record of the actual cost of the repairs performed and who performed the repairs must be maintained for a minimum of 5 years by the leasing company, vehicle manufacturer, insurance company not licensed to do business in this state, association, repossession company, self-insured owner, financial institution, governmental entity, or other company, institution, or entity. The estimates and repair records required by this subsection must be available for unannounced inspections by a law enforcement agency or a representative of the secretary of state. The secretary of state may request a leasing company, vehicle manufacturer, insurance company not licensed to do business in this state, association, repossession company, self-insured owner, financial institution, governmental entity, or other company, institution, or entity to provide copies of title documents, repair estimates, claims reports involving major component parts, and actual cash value determination documents to assist the secretary of state in monitoring compliance with this act. (11) An application for a salvage certificate of title must be made on a form prescribed by the secretary of state and accompanied by a fee of $10.00. The application must contain all of the following: (a) The complete name and current address of the owner. (b) A description of the vehicle, including its make, style of body, model year, fee category or weight, color, and vehicle identification number. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 (c) An estimate of the cost repair, including parts and labor, and an estimate of the predamaged actual cash value of the vehicle. (d) If the vehicle is a late model vehicle, a A listing of each major component part that was not salvageable. (e) Further information as may reasonably be required by the secretary of state. (12) The secretary of state shall issue and mail the salvage certificate within not later than 5 business days after the time the application is received at the secretary of state's office in Lansing. Each salvage certificate of title must include a listing of each major component part that was not salvageable. (13) A salvage certificate of title authorizes the holder of the title to possess, transport, but not drive on a highway, and transfer ownership in, a vehicle. The secretary of state shall not issue a certificate of title or registration plates for a vehicle for which a salvage certificate of title was issued unless a specially trained officer described in subsection (15) certifies all of the following: (a) That the vehicle identification numbers and parts identification numbers are correct. (b) That the applicant has proof of ownership of repair parts used. (c) That the vehicle complies with the equipment standards of this act. (d) That any repairs performed on the vehicle were done in a workmanlike manner, as certified on a form provided by the department by a properly licensed mechanic in the appropriate specialty. A properly licensed mechanic described in under this subdivision must not be the same individual as the specially 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 trained officer making the certification of the vehicle as required under this subsection. (14) The certification required by subsection (13) must be made on a form prescribed and furnished by the secretary of state in conjunction with the department of state police and must accompany the application that is submitted to the secretary of state for a certificate of title. An application for a certificate of title must contain a description of each salvageable part used to repair the vehicle and any identification number affixed to or inscribed on the part as required by state or federal law. Upon On satisfactory completion of the inspection as required by the secretary of state and other requirements for application, the secretary of state shall issue a certificate of title for the vehicle bearing the legend "rebuilt salvage". (15) An officer specially trained as provided by the secretary of state and authorized by the secretary of state to conduct a salvage vehicle inspection is any of the following: (a) An employee of the department of state. (b) An on-duty or off-duty police officer. (c) A previously certified police officer who is appointed by the local police agency as a limited enforcement officer to conduct salvage vehicle inspections. The local police agency shall give this officer access to the agency's law enforcement information network system and the authority to confiscate any stolen vehicle or vehicle parts discovered during an inspection. The local police agency may give the officer the authority to arrest a person suspected of having unlawful possession of a stolen vehicle or vehicle parts. The local police agency shall not appoint a previously certified police officer whose certificate has been 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 suspended, revoked, or denied under subsection (16). (16) The secretary of state shall issue a certificate to an officer who is specially trained as provided by the secretary of state to conduct salvage vehicle inspections. Only a person who has a valid certification from the secretary of state may perform salvage inspections. The secretary of state on the secretary of state's own initiative or in response to complaints shall make reasonable and necessary public or private investigations within or outside of this state and gather evidence against an officer who was issued a certificate and who violated or is about to violate this act or a rule promulgated under this act. Subject to subsection (17), the secretary of state may suspend, revoke, or deny a certificate after an investigation if the secretary of state determines that the officer committed 1 or more of the following: (a) Violated this act or a rule promulgated under this act. (b) Was, after an investigation, found responsible for a fraudulent act in connection with the inspection, purchase, sale, lease, or transfer of a salvage vehicle. (c) Was found guilty of the theft, embezzlement, or misappropriation of salvage vehicle inspection fees. (d) Performed improper, careless, or negligent salvage vehicle inspections. (e) Ceased to function as a police officer because of suspension, retirement, dismissal, disability, or termination of employment. (f) Was convicted of a violation or attempted violation of 1986 PA 119, MCL 257.1351 to 257.1355. (g) Made a false statement of a material fact in the officer's certification of a salvage vehicle inspection or any record 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 concerning a salvage vehicle inspection. (h) Charged a fee in excess of the fee described in subsection (26). (17) If the secretary of state revokes, suspends, or denies a certificate under subsection (16)(a), (d), (g), or (h), the secretary of state shall, at the time of revocation, suspension, or denial, notify the officer and the law enforcement agency on behalf of which the officer is performing inspections of the law enforcement agency's right to appeal the revocation, suspension, or denial. The notification must include a statement that a request for an appeal under this subsection must be made no later than 30 days after the revocation, suspension, or denial. An agency making an appeal under this subsection may request a hearing at the time the appeal is made. The secretary of state or any person designated by the secretary of state to act in the secretary of state's place shall deny or grant an appeal made under this subsection within a reasonable period, in writing or stated in the record if a hearing is held. If the secretary of state revokes a certificate under subsection (16)(a), (d), (g), or (h) and denies an appeal of the revocation under this subsection, the officer may apply for a new certificate no earlier than 5 years after the revocation. (18) Upon On receipt of the appropriate abstract of conviction from a court and without any investigation, the secretary of state shall immediately revoke the certificate of an officer who has been convicted of a violation or attempted violation of section 413, 414, 415, 535, 535a, or 536a of the Michigan penal code, 1931 PA 328, MCL 750.413, 750.414, 750.415, 750.535, 750.535a, and 750.536a, or has been convicted in federal court or in another state of a violation or attempted violation of a law substantially 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 corresponding to 1 of those sections. (19) If a dealer acquires ownership of an older model a vehicle from an owner that will be dismantled for reusable parts or sent to a scrap metal processor , the dealer shall receive an assigned certificate of title and shall retain it as long as the dealer retains the vehicle. A vehicle scrap metal processor , used or secondhand vehicle parts dealer, or automotive recycler shall surrender an assigned certificate of title to the secretary of state within not later than 30 days after the vehicle is destroyed or scrapped. (20) A dealer selling or assigning a vehicle to a vehicle scrap metal processor shall make a record in a format, as determined by the secretary of state, triplicate on a form to be provided by the secretary of state in substantially the following form: Scrap Vehicle Inventory: SELLER : Dealer name __________________________________________ Dealer address _______________________________________ Dealer license number ________________________________ PURCHASER : Conveyed to:_________________________ Date____________ (Vehicle scrap metal processor) Dealer address _______________________________________ Dealer license number ________________________________ Vehicles Dealer's Stock Model Year Vehicle Make VIN Title Number Number Color 1.________ ____________ ___ ___________ ______ ______ 2.________ ____________ ___ ___________ ______ ______ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3.________ ____________ ___ ___________ ______ ______ etc. One copy must be retained as a permanent record by the dealer, 1 copy must be forwarded with the vehicle to be retained by the vehicle scrap metal processor, and 1 copy must be forwarded to the secretary of state. that includes, but is not limited to, all of the following information: (a) The dealer's name, address, and license number. (b) The scrap metal processor's name, address, and license number. (c) The date of the transaction. (d) The vehicle's year, make, vehicle identification number, title number, dealer stock number, and color. (21) A person, other than an automot