GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2019

SESSION LAW 2019-153

HOUSE BILL 337

AN ACT to amend laws governing the transfer of salvage vehicles by removing notary requirements, permitting electronic signatures, and allowing access to Division of motor vehicle systems for salvage vehicle title processing.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 20‑52(c) reads as rewritten:

"(c)      Unless otherwise prohibited by federal law, an application for a certificate of title, salvage certificate of title, a registration plate, a registration card, and any other document required by the Division to be submitted with the application and requiring a signature may be submitted to the Division with an electronic signature in accordance with Article 40 of Chapter 66 of the General Statutes. The required notarization of any electronic signature on any application or document submitted to the Division pursuant to this subsection may be performed electronically in accordance with Article 2 of Chapter 10B of the General Statutes. The Division will not certify or approve a specific electronic process or vendor. Any entity offering an electronic signature process assumes all responsibility and liability for the accuracy of the signature. The Division shall be held harmless from any liability to a claim arising from applications submitted with an inaccurate electronic signature pursuant to this subsection."

SECTION 2.  G.S. 20‑63(i) and (j) read as rewritten:

"(i)       Electronic Applications and Collections. – The Division shall accept electronic applications for the issuance of registration plates, registration certificates, salvage certificates of title, and certificates of title, and is authorized to electronically collect fees from online motor vehicle registration vendors under contract with the Division.

(j)         The Division shall contract with at least two online motor vehicle registration vendors which may enter into contracts with motor vehicle dealers to complete and file Division required documents for the issuance of a certificate of title, registration plate, or registration card or a duplicate certificate of title, registration plate, or registration card for a motor vehicle, upon purchase or sale of a vehicle. Vendors under contract with the Division pursuant to this subsection may also enter into contracts with used motor vehicle dealers whose primary business is the sale of salvage vehicles on behalf of insurers to complete and file documents required by the Division for the issuance of a salvage certificate of title."

SECTION 3.  G.S. 20‑72(b) reads as rewritten:

"(b)      In order to assign or transfer title or interest in any motor vehicle registered under the provisions of this Article, the owner shall execute in the presence of a person authorized to administer oaths an assignment and warranty of title on the reverse of the certificate of title in form approved by the Division, including in such assignment the name and address of the transferee; and no title to any motor vehicle shall pass or vest until such assignment is executed and the motor vehicle delivered to the transferee. The provisions of this section shall not apply to any foreclosure or repossession under a chattel mortgage or conditional sales contract or any judicial sale. The provisions of this subsection shall not apply to (i) any transfer to an insurer pursuant to G.S. 20‑109.1(b)(2) or (ii) any transfer to a used motor vehicle dealer pursuant to G.S. 20‑109.1(e1). The provisions of this subsection requiring that an assignment and warranty of title be executed in the presence of a person authorized to administer oaths shall not apply to any transfer of title to or from an insurer pursuant to G.S. 20‑109.1.

When a manufacturer's statement of origin or an existing certificate of title on a motor vehicle is unavailable, a motor vehicle dealer licensed under Article 12 of this Chapter may also transfer title to a vehicle currently titled in this State to another by certifying in writing in a sworn statement to the Division that is signed by the dealer principal, general manager, general sales manager, controller, or owner of the dealership that, to the best of the signatory's knowledge and information as of the date of the sworn certification, all prior perfected liens on the vehicle that are known or reasonably ascertainable by the signatory have been paid and that the motor vehicle dealer, despite having used reasonable diligence, was unable to obtain the vehicle's statement of origin or certificate of title. For purposes of this subsection, a dealer may certify that the dealer is unable to obtain the vehicle's statement of origin or certificate of title if the statement of origin or certificate of title has either (i) not been delivered to the dealer or (ii) has been lost or misplaced. The Division is authorized to request any information it deems necessary to transfer the vehicle and shall develop a form for this purpose. The knowing and intentional filing of a false sworn certification with the Division pursuant to this subsection shall constitute a Class H felony. A dealer principal, owner, or manager of a motor vehicle dealership who is not a signatory of the sworn certification required under this subsection may only be charged for a criminal violation for filing a false certification under this subsection by another dealership employee if the dealer principal, owner, or manager had actual knowledge of the falsity of the sworn certification at the time the sworn certification was submitted to the Division.

Any person transferring title or interest in a motor vehicle shall deliver the certificate of title duly assigned in accordance with the foregoing provision to the transferee at the time of delivering the vehicle, except when a certificate of title is unavailable as provided in this subsection or in G.S. 20‑72.1, and except that where a security interest is obtained in the motor vehicle from the transferee in payment of the purchase price or otherwise, the transferor shall deliver the certificate of title to the lienholder and the lienholder shall forward the certificate of title together with the transferee's application for new title and necessary fees to the Division within 20 days. If the title to a vehicle is unavailable and the dealer transfers the vehicle on a sworn certification pursuant to this section or G.S. 20‑52.1, and the title is subsequently received or found by the dealer, the dealer shall retain a copy for its records and submit the title to the Division. Any person who delivers or accepts a certificate of title assigned in blank shall be guilty of a Class 2 misdemeanor. No person shall have a cause of action against the Division or Division contractors arising from the transfer of a vehicle by a sworn certification pursuant to this section.

The title to a salvage vehicle shall be forwarded to the Division as provided in G.S. 20‑109.1, except with respect to the title of any salvage vehicle transferred pursuant to G.S. 20‑109.1(b)(2) or G.S. 20‑109.1(e1)."

SECTION 4.  G.S. 20‑75 reads as rewritten:

"§ 20‑75.  When transferee is a charitable organization, dealer, or insurance company.

A transferee of a vehicle registered under this Article is not required to register the vehicle or forward the certificate of title to the Division as provided in G.S. 20‑73 when the transferee is any of the following:

(1)        A dealer who is licensed under Article 12 of this Chapter and who holds the vehicle for resale.

(2)        An insurance company taking the vehicle for sale or disposal for salvage purposes where the title is taken or requested as a part of a bona fide claim settlement transaction and only for the purpose of resale.

(3)        A charitable organization operating under section 501(c)(3) of the Internal Revenue Code (26 U.S.C. § 501(c)(3)) and the vehicle was donated to the charitable organization solely for purposes of resale by the charitable organization.

To assign or transfer title or interest in the vehicle, the charitable organization, dealer, or insurance company organization or dealer shall execute, in the presence of a person authorized to administer oaths, a reassignment and warranty of title on the reverse of the certificate of title in the form approved by the Division, which shall include the name and address of the transferee. To assign or transfer title or interest in the vehicle, the insurance company shall execute a reassignment and warranty of title on the reverse of the certificate of title in the form approved by the Division, which shall include the name and address of the transferee. The title to the vehicle shall not pass or vest until the reassignment is executed and the motor vehicle delivered to the transferee.

The dealer transferring title or interest in a motor vehicle shall deliver the certificate of title duly assigned in accordance with the foregoing provision to the transferee at the time of delivering the vehicle, except:

(1)        Where a security interest in the motor vehicle is obtained from the transferee in payment of the purchase price or otherwise, the dealer shall deliver the certificate of title to the lienholder and the lienholder shall forward the certificate of title together with the transferee's application for new certificate of title and necessary fees to the Division within 20 days; or

(2)        Where the transferee has the option of cancelling the transfer of the vehicle within 10 days of delivery of the vehicle, the dealer shall deliver the certificate of title to the transferee at the end of that period. Delivery need not be made if the contract for sale has been rescinded in writing by all parties to the contract.

Any person who delivers or accepts a certificate of title assigned in blank shall be guilty of a Class 2 misdemeanor.

The title to a salvage vehicle shall be forwarded to the Division as provided in G.S. 20‑109.1, except with respect to the title of any salvage vehicle transferred pursuant to G.S. 20‑109.1(b)(2) or G.S. 20‑109.1(e1)."

SECTION 5.  G.S. 20‑85(a) reads as rewritten:

"(a)      The following fees are imposed concerning a certificate of title, a registration card, or a registration plate for a motor vehicle. These fees are payable to the Division and are in addition to the tax imposed by Article 5A of Chapter 105 of the General Statutes:

(1)....... Each application for certificate of title.................................................. $52.00

(2)....... Each application for duplicate or corrected certificate of title................ 20.00

(3)....... Each application of repossessor for certificate of title............................ 20.00

(4)....... Each transfer of registration.................................................................... 20.00

(5)....... Each set of replacement registration plates............................................. 20.00

(6)....... Each application for duplicate registration card...................................... 20.00

(7)....... Each application for recording supplementary lien................................. 20.00

(8)....... Each application for renewing a security interest on a certificate of title or removing a lien or security interest from a certificate of title........................................... 20.00

(9)....... Each application for certificate of title for a motor vehicle transferred to a manufacturer, as defined in G.S. 20‑286, or a motor vehicle retailer for the purpose of resale 20.00

(10)..... Each application for a salvage certificate of title made by an insurer pursuant to G.S. 20‑109.1 or by a used motor vehicle dealer pursuant to subdivision (b)(2) or subsection (e1) of G.S. 20‑109.1 G.S. 20‑109.1(e1) ................................................ 20.00

(11)..... Each set of replacement Stock Car Racing Theme plates issued under G.S. 20‑79.4............................................................................................................... 25.00."

SECTION 6.  G.S. 20‑109.1(b) reads as rewritten:

"(b)      Transfer to Insurer. –

(1)        If a salvage vehicle owner does not want to keep the vehicle, the owner must assign the vehicle's certificate of title to the insurer when the insurer pays the claim. The insurer must send the assigned title to the Division within 10 days after receiving it from the vehicle owner. The Division must then send the insurer a form to use to transfer title to the vehicle from the insurer to a person who buys the vehicle from the insurer. If the insurer sells the vehicle, the insurer must complete the form and give it to the buyer. If the buyer rebuilds the vehicle, the buyer may apply for a new certificate of title to the vehicle.

(2)        If a salvage vehicle owner fails to assign and deliver the vehicle's certificate of title to the insurer within 30 days of the payment of the claim in accordance with subdivision (b)(1) of this section, the insurer, without surrendering the certificate of title, may, at any time thereafter, request that the Division send the insurer a form to use to transfer title to the vehicle from the insurer to a person who buys the vehicle from the insurer. The request shall be made on a form prescribed by the Division and shall be accompanied by proof of payment of the claim and proof of notice sent to the owner and any lienholder requesting the vehicle's certificate of title. If the records of the Division indicate there is an outstanding lien against the vehicle immediately before the payment of the claim and if the payment was made to a lienholder or to a lienholder and the owner jointly, the proof of payment shall include evidence that funds were paid to the first lienholder shown on the records of the Division. The notice must be sent by the insurer at least 30 days prior to requesting the Division send the insurer a form to use to transfer title and must be sent by certified mail or by another commercially available delivery service providing proof of delivery to the address on record with the Division. Upon the Division's receipt of such request, the vehicle's certificate of title is deemed to be assigned to the insurer. Notwithstanding any outstanding liens against the vehicle, the Division must send the insurer a form to use to transfer title to the vehicle from the insurer to a person who buys the vehicle from the insurer. The Division's issuance of the form extinguishes all existing liens on the motor vehicle. If the insurer sells the vehicle, the insurer must complete the form and give it to the buyer. In such a sale by the insurer, the motor vehicle shall be transferred free and clear of any liens. If the buyer rebuilds the vehicle, the buyer may apply for a new certificate of title to the vehicle.

(3) Notwithstanding any other provision of law, with respect to a vehicle described in this subsection, the following shall be exempt from the requirements of notarization, including exemption from the notarization of electronic signature requirements of G.S. 20‑52(c):

a. The transfer of ownership on the certificate of title.

b. Any power of attorney required in connection with the transfer of ownership to the insurer.

c. Any required odometer disclosure statement.

d. The application for a salvage certificate of title.

e. The transfer of ownership on the salvage certificate of title issued.

f. Any statement pursuant to subdivision (2) of subsection (b) of this section.

g. Any statement on the salvage certificate of title issued."

SECTION 7.  This act becomes effective October 1, 2019.

In the General Assembly read three times and ratified this the 11^th day of July, 2019.

                                                                    s/  Carl Ford

                                                                         Presiding Officer of the Senate

                                                                    s/  Tim Moore

                                                                         Speaker of the House of Representatives

                                                                    s/  Roy Cooper

                                                                         Governor

Approved 11:22 a.m. this 22^nd day of July, 2019