Sec. 1. 29-A MRSA §603, sub-§4, as enacted by PL 1993, c. 683, Pt. A, §2 and affected by Pt. B, §5, is amended to read:

4. Penalties. If an application, certificate of title or other document required to be delivered to the Secretary of State is not delivered to the Secretary of State within 20 days, the Secretary of State shall collect, as a penalty, an amount equal to the fee required for the transaction. If a dealer fails to deliver an application to the Secretary of State in accordance with section 654, subsection 2, the dealer shall pay to the Secretary of State, as an additional penalty for each such failure, the sum of $250, plus an additional $100 for every 10 days that the dealer fails to deliver the application, and shall pay actual damages to the lienholder.

SUMMARY

Under the Maine Revised Statutes, Title 11, section 9-1317, subsection 5 and section 9-1324, subsection 1, if a lender loans money for the purchase of a motor vehicle, the lender must ensure that the motor vehicle is covered by a certificate of title within 20 days of the purchase in order to have priority over other claims to the vehicle. The vehicle becomes covered by a certificate of title only when a valid application and the applicable fee are delivered to the Secretary of State. Current law requires motor vehicle dealers to deliver applications for title to purchased vehicles to the Secretary of State within 20 days in order to ensure that lenders' liens or security interests are protected. Some dealers fail to comply with this 20-day time period, thereby putting lenders at risk. This bill penalizes those dealers by imposing an initial $250 penalty, with additional penalties for continued failure to comply with the law, and requiring restitution to lenders whose liens are affected by the dealer's failure to comply with the law.