HB2292 - 561R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 28-2134, Arizona Revised Statutes, is amended to read:

START_STATUTE28-2134. Satisfaction of lien or encumbrance; assignment of obligation by lienholder; civil penalty

A. When a holder of a lien or encumbrance receives payment in full satisfying a lien or encumbrance recorded under this article, the holder of the lien or encumbrance shall release the lien or encumbrance and notify the owner of the vehicle at the address shown on the certificate of title or, if the holder of the lien or encumbrance has been previously notified of sale or transfer of the vehicle, the person who is legally entitled to possession that the department has issued a certificate of title to the person for the vehicle.

B. If a holder of a lien or encumbrance assigns the obligation and the holder lawfully has possession of the certificate of title, the holder shall deliver the certificate of title at the time of assignment to the holder's assignee. If a holder of a lien or encumbrance is not entitled to possession of the certificate of title when the holder assigns the obligation, the holder shall immediately deliver the certificate of title to the assignee when the holder becomes lawfully entitled to and obtains lawful possession of the certificate of title. The holder's assignee is entitled to hold the certificate of title until the obligation is satisfied. When the obligation is satisfied, the assignee shall deliver the certificate of title to the next holder of a lien or encumbrance entitled to possession of the certificate of title or, if there is not another holder of a lien or encumbrance entitled to possession of the certificate of title, to the owner of the vehicle as prescribed in subsection A of this section.

C. If a holder of a lien or encumbrance who possesses a certificate of title as provided in this article refuses or fails to surrender the certificate of title to the person who is legally entitled to possession of the certificate of title on that person's request and within fifteen business days after the holder receives payment in full satisfaction of the holder's lien or encumbrance, after an opportunity for an administrative hearing, the department may impose and collect a civil penalty from the holder of the lien or encumbrance to be deposited, pursuant to sections 35-146 and 35-147, in the state highway fund established by section 28-6991 as follows:

1. Fifty dollars $50 if the certificate of title is surrendered in accordance with this subsection within three additional business days.

2. The penalty provided for in paragraph 1 of this subsection plus fifty dollars $50 for each additional day exceeding eighteen business days that the certificate of title is not surrendered in accordance with this subsection up to a maximum of five hundred dollars $500 for each certificate of title.

D. The department may satisfy a lien or encumbrance on its records and on a certificate of title to a vehicle if the owner of the vehicle furnishes satisfactory proof of the payment in full of the underlying debt and an affidavit stating the following:

1. That the owner has made a diligent search to locate the holder of the lien or encumbrance.

2. With particularity the steps taken in the search.

3. That after the search the holder of the lien or encumbrance could not be found.

E. The department may satisfy a lien or encumbrance against a vehicle on its records by accepting a certificate of title to the vehicle issued by another jurisdiction if all of the following conditions exist:

1. The lien previously recorded in this state does not appear on the title presented from another jurisdiction.

2. The certificate of title was issued by the other jurisdiction at least one year before the time it was presented to this state.

3. The law of the other jurisdiction requires a lien or encumbrance to be recorded on that state's certificate of title.

F. Beginning on the twentieth business day after full payment of the lien or encumbrance is made a motor vehicle dealer that is unable to obtain from the holder of a lien or encumbrance a certificate of title for a motor vehicle that is acquired through a payoff of the lien or encumbrance as required in subsection c of this section may apply to the department for a certificate of title in the motor vehicle dealer's name for the purpose of resale. The motor vehicle dealer shall provide all of the following with the application:

1. Evidence of the lien or encumbrance payoff in the form of a release of lien, proof of payment, electronic funds transfer or other evidence that is acceptable to the department that full payment was made to the holder of the lien or encumbrance.

2. Evidence of ownership transfer from the recorded owner to the motor vehicle dealer.

3. If the motor vehicle is subject to odometer disclosure pursuant to section 28-2058, an odometer mileage disclosure statement in a form prescribed by the director.

G. A motor vehicle dealer that is issued a certificate of title pursuant to subsection F of this section assumes liability for any outstanding balance due to a holder of a lien or encumbrance, and a holder of a lien or encumbrance may exercise any available legal remedy to collect the debt. If the certificate of title issued pursuant to subsection F of this section is revoked pursuant to section 28-2059, the department may reissue the previous certificate of title for the motor vehicle. END_STATUTE

Sec. 2. Section 28-2157, Arizona Revised Statutes, is amended to read:

START_STATUTE28-2157. Application for registration; exception

A. A person shall apply to the department for registration of a motor vehicle, trailer or semitrailer on forms prescribed or authorized by the department.

B. The application shall contain:

1. A unique identifier such as a driver license number or the first and last name and complete residence address, of which is sufficient to identify the owner.

2. A description of the vehicle, including the serial number.

3. If it is a new vehicle, the date of sale by the manufacturer or dealer to the person first operating the vehicle.

4. If the owner of the vehicle rents or intends to rent the vehicle without a driver, a statement of that fact.

5. Other facts required by the department only if the department has a reasonable suspicion that fraud is connected to the application.

C. The registering officer shall indicate on the face of the registration application that the registrant may be subject to vehicle emissions testing requirements pursuant to section 49-542.

D. On request of an applicant, the department shall allow the applicant to provide on the registration of a motor vehicle, trailer or semitrailer a post office box address that is regularly used by the applicant and that is located in the county in which the applicant resides.

E. The person shall include with the application the required fees and the certificate of title to the vehicle for which registration is sought. The registering officer may waive the requirement that the applicant present a certificate of title at the time of making an application for renewal if the registering officer has available complete and sufficient records to accurately compute the vehicle license tax.

F. The department may request an applicant who appears in person to register a motor vehicle, trailer or semitrailer to satisfactorily complete the vision screening test prescribed by the department.

G. A person applying for initial registration of a neighborhood electric vehicle, a neighborhood electric shuttle or a motorized quadricycle shall certify in writing that a notice of the operational restrictions applying to the vehicle as provided in section 28-966 are contained on a permanent notice attached to or painted on the vehicle in a location that is in clear view of the driver. This subsection does not apply to a fully autonomous vehicle that is incapable of operation by a human driver. END_STATUTE

Sec. 3. Section 28-2158, Arizona Revised Statutes, is amended to read:

START_STATUTE28-2158. Registration card

A. The department shall file each application for registration. If satisfied that the application is genuine and regular, the department shall issue a registration card to the owner of the vehicle and shall assign license plates to the vehicle.

B. The registration card shall contain on the face of the card all of the following:

1. The date it is issued.

2. The registration number assigned to the owner and the vehicle.

3. The name and address of the owner.

4. A description of the registered vehicle, including the serial number.

5. The amount of fees paid for registration of the vehicle.

C. The registration card shall be carried at all times in the driver's compartment of the vehicle for which it is issued or displayed on a wireless communication device. The registration card is subject to inspection by the director, members of the highway patrol or any peace officer. END_STATUTE

Sec. 4. Section 28-4403, Arizona Revised Statutes, is amended to read:

START_STATUTE28-4403. Record requirements; motor vehicle information; inspection; liability; electronic submission

A. A licensee shall keep and maintain at the licensee's established place of business, or place of business if the licensee is a broker or a wholesale motor vehicle dealer, a permanent record in the form prescribed by the director. containing The permanent record may be in an electronic format and shall contain:

1. A particular description of each motor vehicle of a type subject to registration under the laws of this state that is bought, sold, brokered or exchanged by the licensee or received or accepted by the licensee for sale, brokering or exchange.

2. A particular description of each used motor vehicle body or chassis that is sold or otherwise disposed of.

3. A particular description of each motor vehicle that is bought or otherwise acquired and wrecked by the licensee.

4. The name and address of the person from whom a motor vehicle, motor vehicle body or motor vehicle chassis was purchased or otherwise acquired and the date it was purchased or acquired.

5. The name and address of the person to whom the motor vehicle, motor vehicle body or motor vehicle chassis was sold or otherwise disposed of, the date it was sold or disposed of and a sufficient description of the vehicle, body or chassis by name or identifying number or otherwise to identify it.

B. A licensed automotive recycler that has a vehicle in the automotive recycler's inventory shall:

1. At the same time have possession of a duly and regularly assigned salvage certificate of title, nonrepairable vehicle certificate of title or dismantle certificate of title to the vehicle.

2. Not offer for sale or sell a vehicle unless a salvage certificate of title, nonrepairable vehicle certificate of title or dismantle certificate of title to the vehicle has been obtained.

C. Each motor vehicle dealer shall give the customer a written or electronic contract and shall maintain a copy of the contract for three years at the dealer's established place of business.

D. Each record required by this section and all inventories relating to the records of a licensee shall be available at all times for physical inspection by agents of the department or members of the highway patrol division. The agents or members may enter on premises where the records or inventories are located during normal business hours for purposes of the inspection. The licensee or any designated employee or agent may accompany any person making the inspection while the person is on the licensee's premises.

E. The licensee is only liable to a person making an inspection under this section for an injury arising out of the condition of the premises that occurs while the person is on the licensee's premises if the licensee knowingly allows the person to encounter a hidden peril or wantonly or wilfully causes the person harm.

F. A wholesale motor vehicle dealer shall submit electronically to the department any documents that are requested by the department during the wholesale motor vehicle dealer's reported business hours and that are prescribed in this section. The wholesale motor vehicle dealer shall submit the requested documents within forty-eight hours after the request is transmitted. END_STATUTE

Sec. 5. Section 28-4415, Arizona Revised Statutes, is amended to read:

START_STATUTE28-4415. Advertising

A. A broker shall not advertise or offer for sale or exchange any specific motor vehicle.

B. A motor vehicle dealer shall not advertise or offer for sale or exchange any specific motor vehicle unless one of the following applies:

1. The motor vehicle is for sale and located at the motor vehicle dealer's established place of business.

2. The motor vehicle dealer discloses in the advertisement the specific street address and business hours where the motor vehicle may be inspected by a retail consumer.

3. The motor vehicle is directly available to the motor vehicle dealer directly from the manufacturer or distributor of the motor vehicle at the time of the advertisement or offer.

C. A broker or motor vehicle dealer may advertise the broker's or motor vehicle dealer's service of arranging or assisting in effecting the purchase of a new motor vehicle from a new motor vehicle dealer and specify the line makes and models of the new vehicles.

D. A broker may not advertise the price of or payment terms for any motor vehicle. A broker shall disclose that the advertiser is a broker and shall clearly and conspicuously state the following:

All motor vehicles arranged for sale are subject to price and availability from the selling motor vehicle dealer. END_STATUTE

Sec. 6. Title 28, chapter 10, article 4, Arizona Revised Statutes, is amended by adding section 28-4424, to read:

START_STATUTE28-4424. Motor vehicle sale rescission or cancellation

A. A motor vehicle dealer, a purchaser and any lienholder may rescind or cancel the sale of any motor vehicle if aLL OF THE FOLLOWING apply:

1. aLL PARTIES AGREE to the rescission or cancellation.

2. aLL PARTIES COMPLETE a return agreement.

3. tHE MOTOR VEHICLE DEALER RETURNS to the rightful parties all fees, taxes and other monies provided to the motor vehicle dealer as part of the sale.

4. If applicable, the motor vehicle dealer complies with subsection D of this section.

B. A motor vehicle dealer shall retain a return agreement with the motor vehicle sales records.

C. A canceled or rescinded sale invalidates any requirements imposed on the motor vehicle dealer to submit an application for a certificate of title or remit any fees or taxes if the application, fees and taxes have not been remitted.

D. If a motor vehicle dealer has submitted to the department an application for a certificate of title or has remitted taxes or fees and the sale is rescinded or canceled pursuant to this section, the motor vehicle dealer shall document the rescission or cancellation of the sale and the return to the rightful parties of all fees, taxes and other monies in a manner prescribed by the department. The documentation shall:

1. Be completed and submitted to the department within fifteen days after the date the parties agreed to cancel or rescind the sale.

2. Include a copy of the return agreement.

3. Include a certificate of title if it has been issued or an attestation that the certificate of title has been lost or destroyed.

E. Within seven days after receiving the documentation described in subsection D of this section, the department shall:

1. Rescind, cancel or revoke any application for a certificate of title or any issued certificate of title.

2. Refund to the motor vehicle dealer any fees and taxes that the motor vehicle dealer paid to the department, except the fee prescribed in section 28-2003, subsection A, paragraph 1, and any fees retained by the department, reimbursed to the department or assessed in addition to prescribed fees by an agent, an authorized third party or an authorized third party electronic service provider as defined in section 28-5100.

3. Issue a certificate of title to the motor vehicle dealer that shows the motor vehicle dealer as the owner and the odometer mileage reading as recorded at the time of the sale that is subject to the rescission or cancellation.

F. If a motor vehicle is subject to subsection D of this section, a motor vehicle dealer may not offer for retail sale the motor vehicle that is the subject of the sale rescission or cancellation until the motor vehicle dealer has received the certificate of title pursuant to subsection E of this section.

G. A rescission or cancellation under this section does not negate that the motor vehicle has been the subject of a previous retail sale. END_STATUTE