Bill Summary – FastDemocracy

Senate File 2308 - Introduced
                                  SENATE FILE 2308
                                  BY COMMITTEE ON TRANSPORTATION
                                  (SUCCESSOR TO SSB 3035)
                                  (COMPANION TO HF 2316 BY
                                   COMMITTEE ON TRANSPORTATION)
                            A BILL FOR
An Act providing an alternative to filing a bond as a condition
  of registering and titling certain motor vehicles.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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    Section 1. Section 321.24, subsection 11, Code 2024, is
 amended to read as follows:
    11. If the county treasurer or department is not
 satisfied as to the ownership of the vehicle or that there
 are no undisclosed security interests in it, or if a junking
 certificate has been issued for the vehicle but a certificate
 of title will not be reissued under section 321.52, subsection
 3, and the vehicle qualifies as an antique vehicle under
 section 321.115, subsection 1, the county treasurer or
 department may register the vehicle but shall, as a condition
 of issuing a certificate of title and registration receipt,
 require the applicant to first receive approval by the
 department.
    a. If the department determines the value of the vehicle is
 one thousand dollars or less and the vehicle is twelve model
 years old or older, the department shall notify the applicant,
 and the department or county treasurer may issue a certificate
 of title and registration receipt. The applicant shall apply
 for a certificate of title and registration within thirty days
 of the department’s notification of determination.
    b. If the department determines the value of the vehicle
 is more than one thousand dollars or the vehicle is less than
 twelve model years old, the applicant shall file with the
 department a bond in the form prescribed by the department
 and executed by the applicant, and either accompanied by the
 deposit of cash with the department or also executed by a
 person authorized to conduct a surety business in this state.
 The owner of a vehicle subject to the bond requirements of
 this subsection shall apply for a certificate of title and
 registration for the vehicle at the county treasurer’s office
 within thirty days of issuance of written authorization from
 the department. The bond shall be in an amount equal to one and
 one-half times the current value of the vehicle, as determined
 by the department, and conditioned to indemnify any prior owner
 and secured party and any subsequent purchaser of the vehicle
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                                S.F. 2308
 or person acquiring any security interest in it, and their
 respective successors in interest, against any expense, loss,
 or damage, including reasonable attorney fees, by reason of
 the issuance of the certificate of title for the vehicle or
 on account of any defect in or undisclosed security interest
 upon the right, title, and interest of the applicant in and to
 the vehicle. Any such interested person has a right of action
 to recover on the bond for any breach of its conditions, but
 the aggregate liability of the surety to all persons shall
 not exceed the amount of the bond. The bond, and any deposit
 accompanying it, shall be returned at the end of three years or
 earlier if the vehicle is no longer registered in this state
 and the currently valid certificate of title is surrendered to
 the department, unless the department has been notified of the
 pendency of an action to recover on the bond. The department
 may authorize issuance of a certificate of title as provided
 in this subsection for a vehicle with an unreleased security
 interest upon presentation of satisfactory evidence that the
 security interest has been extinguished or that the holder of
 the security interest cannot be located to release the security
 interest as provided in section 321.50.
    c. The department may adopt rules pursuant to chapter 17A to
 implement and administer this subsection.
    Sec. 2. Section 321.52, subsection 3, paragraph d, Code
 2024, is amended to read as follows:
    d. However, upon application and a showing of good cause,
 the department may issue a certificate of title to a person
 after the fourteen-day period for a junked vehicle for which
 a junking certificate has been issued. For purposes of this
 subsection, “good cause” means that the junking certificate
 was obtained by mistake or inadvertence. If a person’s
 application to the department is denied, the person may make
 application for a certificate of title under the bonding
 procedure as provided in section 321.24, subsection 11, if
 the vehicle qualifies as an antique vehicle under section
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                                        S.F. 2308
321.115, subsection 1, or the person may seek judicial review
as provided under sections 17A.19 and 17A.20.
                         EXPLANATION
         The inclusion of this explanation does not constitute agreement with
         the explanation’s substance by the members of the general assembly.
    Under current law, if a county treasurer or the department of
 transportation (DOT) is not satisfied as to the ownership of a
 vehicle or that there are no undisclosed security interests in
 it, or if a junking certificate has been issued for the vehicle
 but a certificate of title will not be reissued and the vehicle
 is 25 years old or older, the county treasurer or DOT may
 register the vehicle. However, as a condition of registration,
 and before issuing a certificate of title and registration
 receipt, the county treasurer or DOT must require the applicant
 to file a bond with the DOT. The bond must be accompanied by
 the deposit of cash with the DOT or also executed by a person
 authorized to conduct a surety business in Iowa.
    This bill requires a person applying for registration
 and certificate of title for such a vehicle to first receive
 approval by the DOT and, depending on the DOT’s determination
 on the value and age of the vehicle, the applicant may not be
 required to file a bond.
    If the DOT determines the value of the vehicle is $1,000
 or less and the vehicle is 12 model years old or older, the
 DOT must notify the applicant, and the DOT or county treasurer
 may issue a certificate of title and registration receipt.
 The applicant is required to apply for a certificate of title
 and registration within 30 days of the DOT’s notification of
 determination. However, if the DOT determines the value of
 the vehicle is more than $1,000 or the vehicle is less than 12
 model years old, the applicant is required to file bond with
 the DOT in accordance with current law.
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Statutes affected: 
Introduced: 321.24, 321.52