Sec. 6. (a) As used in this section, "qualified service provider" means a person able to provide electronic lien or electronic title services in coordination with vehicle lienholders and state departments of motor vehicles.
(b) As used in this section, "qualified vendor" refers to a person with whom the bureau contracts to:
(1) develop;
(2) implement; and
(3) provide ongoing support with respect to;
a statewide electronic lien and title system under this section.
(c) As used in this section, "statewide electronic lien and title system" or "system" means a statewide electronic lien and title system implemented by the bureau under this section to process:
(1) vehicle titles;
(2) certificate of title data in which a lien is notated; and
(3) the notification, maintenance, and release of security interests in vehicles;
through electronic means instead of paper documents.
(d) Not later than the dates set forth in subsection (h), the bureau shall implement a statewide electronic lien and title system for the following purposes:
(1) To facilitate and promote commerce and governmental transactions by validating and authorizing the use of electronic records.
(2) To modernize the law and eliminate barriers to electronic commerce and governmental transactions resulting from uncertainties related to handwritten and other written materials.
(3) To promote uniformity of the law among the states relating to the use of electronic and similar technological means of effecting and performing commercial and governmental transactions.
(4) To promote public confidence in the validity, integrity, and reliability of electronic commerce and governmental transactions.
(5) To promote the development of the legal and business infrastructure necessary to implement electronic commerce and governmental transactions.
(e) The bureau may:
(1) contract with one (1) or more qualified vendors to develop and implement a statewide electronic lien and title system; or
(2) develop and make available to qualified service providers a well defined set of information services that will enable secure access to the data and internal application components necessary to facilitate the creation of a statewide electronic lien and title system.
(f) If the bureau elects under subsection (e)(1) to contract with one (1) or more qualified vendors to develop and implement a statewide electronic lien and title system, the following apply:
(1) The bureau shall issue a competitive request for proposals to assess the qualifications of any vendor seeking to develop, implement, and provide ongoing support for the system. The bureau may reserve the right to receive input concerning specifications for the establishment and operation of the system from parties that do not respond to the bureau's request for proposals.
(2) A contract entered into between the bureau and a qualified vendor may not provide for any costs or charges payable by the bureau to the qualified vendor. The qualified vendor shall reimburse the bureau for any reasonable and documented costs incurred by the bureau and directly associated with the development, implementation, or ongoing support of the system.
(3) Upon implementing a statewide electronic lien and title system under this section, the qualified vendor may charge participating lienholders or their agents a fee for each lien notification transaction provided through the system, in order to recover the qualified vendor's costs associated with the development, implementation, and ongoing administration of the system. A lien notification fee under this subdivision must be consistent with market pricing and may not exceed three dollars and fifty cents ($3.50). The qualified vendor may not charge lienholders or their agents any additional fee for lien releases, assignments, or transfers. The qualified vendor may not charge a fee under this subdivision to a state agency or its agents for lien notification, lien release, lien assignment, or lien transfer. To recover their costs associated with the lien, participating lienholders or their agents may charge:
(A) the borrower in a vehicle loan; or
(B) the lessee in a vehicle lease;
an amount equal to any lien notification fee imposed by the qualified vendor under this subdivision, plus a fee in an amount not to exceed three dollars ($3) for each electronic transaction in which a lien is notated.
(4) A qualified vendor may also serve as a qualified service provider to motor vehicle lienholders if the following conditions are met:
(A) The contract between the bureau and the qualified vendor must include provisions specifically prohibiting the qualified vendor from using information concerning vehicle titles for any commercial, marketing, business, or other purpose not specifically contemplated by this chapter.
(B) The contract between the bureau and the qualified vendor must include an acknowledgment by the qualified vendor that the qualified vendor is required to enter into agreements to exchange electronic lien data with any:
(i) qualified service providers that offer electronic lien or title services in Indiana and that have been approved by the bureau for participation in the system; and
(ii) qualified service providers that are not qualified vendors.
(C) The bureau must periodically monitor the fees charged by a qualified vendor that also:
(i) serves as a qualified service provider to lienholders; or
(ii) provides services as a qualified vendor to other qualified service providers;
to ensure that the qualified vendor is not engaging in predatory pricing.
(g) If the bureau elects under subsection (e)(2) to develop an interface to provide qualified service providers secure access to data to facilitate the creation of a statewide electronic lien and title system, the following apply:
(1) The bureau shall establish:
(A) the total cost to develop the statewide electronic lien and title system by July 1, 2022;
(B) qualifications for third party service providers offering electronic lien services; and
(C) a qualification process to:
(i) evaluate electronic lien and title system technologies developed by third party service providers; and
(ii) determine whether such technologies comply with defined security and platform standards.
(2) Not later than July 1, 2022, the bureau shall publish on the bureau's website the qualifications established by the bureau under subdivision (1). A third party service provider that seeks to become qualified by the bureau under this subsection must demonstrate the service provider's qualifications, in the form and manner specified by the bureau, not later than thirty (30) days after the date of the bureau's publication under this subdivision. After the elapse of the thirty (30) day period during which third party service providers may respond to the bureau's publication under this subdivision, the bureau shall notify each responding third party service provider as to:
(A) the total cost to develop the system, as determined by the bureau under subdivision (1); and
(B) whether the third party service provider has met the qualifications established by the bureau under subdivision (1) and is approved to participate in the statewide electronic lien and title system.
(3) Not later than thirty (30) days after receiving a notice of approval from the bureau under subdivision (2), each qualified service provider shall notify the bureau of the qualified service provider's intention to participate in the statewide electronic lien and title system.
(4) Upon implementing a statewide electronic lien and title system under this section, the bureau may charge participating service providers or their agents a fee for each lien transaction provided through the system in order to recover the bureau's costs associated with the development, implementation, and ongoing administration of the system. A fee under this subdivision must be consistent with market pricing and may not exceed three dollars and twenty-five cents ($3.25). A fee collected under this subdivision shall be deposited in the commission fund. Fees collected by the bureau for the implementation of a statewide electronic lien and title system are limited to those contained in this subdivision. This subdivision expires July 1, 2025.
(5) A contract entered into between the bureau and a qualified service provider may not provide for any costs or charges payable by the bureau to the qualified service provider.
(6) Upon the implementation of a statewide electronic lien and title system under this section, a qualified service provider may charge participating lienholders or their agents transaction fees consistent with market pricing in addition to the fees described in subdivision (4). A fee under this subdivision may not be charged to a state agency or its agents for lien notification, lien release, lien assignment, or lien transfer. To recover their costs associated with a lien, participating lienholders or their agents may charge:
(A) the borrower in a vehicle loan; or
(B) the lessee in a vehicle lease;
an amount equal to any fee imposed by a qualified service provider under this subdivision, plus a fee in an amount not to exceed three dollars ($3) for each electronic transaction in which a lien is notated. This subdivision expires July 1, 2025.
(7) The contract between the bureau and a qualified service provider must include provisions specifically prohibiting the qualified service provider from using information concerning vehicle titles for any commercial, marketing, business, or other purpose not specifically contemplated by this chapter.
(h) Subject to subsection (i), the bureau shall implement, and allow or require the use of, a statewide electronic lien and title system under this section as follows:
(1) A statewide electronic lien system that is capable of processing:
(A) certificate of title data in which a lien is notated; and
(B) the notification, maintenance, and release of security interests in vehicles;
through electronic means must be made available for voluntary use by vehicle lienholders not later than July 1, 2022.
(2) Subject to subsection (j)(5), the bureau shall require that the statewide electronic lien system made available under subdivision (1) be used for processing:
(A) certificate of title data in which a lien is notated; and
(B) the notification, maintenance, and release of security interests in vehicles;
after June 30, 2023.
(3) A statewide electronic title system capable of processing vehicle titles through electronic means must be made available for voluntary use by vehicle dealers, lienholders, and owners not later than July 1, 2025.
(4) The bureau shall require that the statewide electronic title system made available under subdivision (3) be used for processing vehicle titles after June 30, 2026.
(i) Subsection (h) does not prohibit the bureau or any:
(1) qualified vendor with whom the bureau contracts under subsection (f); or
(2) qualified service provider with whom the bureau contracts under subsection (g);
from implementing, making available, or requiring the use of a statewide electronic lien system described in subsection (h)(1) at the same time as, or in conjunction with, a statewide electronic title system described in subsection (h)(3), or from implementing, making available, or requiring the use of a statewide electronic lien system described in subsection (h)(1) or a statewide electronic title system described in subsection (h)(3) before the applicable dates otherwise set forth in subsection (h).
(j) The following apply to the use of a statewide electronic lien system described in subsection (h)(1):
(1) Notwithstanding section 5(b) of this chapter, if there are one (1) or more liens or encumbrances on a motor vehicle, the bureau may electronically transmit the lien to the first lienholder and notify the first lienholder of any additional liens. Subsequent lien satisfactions may be electronically transmitted to the bureau and must include the name and address of the person satisfying the lien.
(2) Whenever the electronic transmission of lien notifications and lien satisfactions is used, a certificate of title need not be issued until the last lien is satisfied and a clear certificate of title can be issued to the owner of the motor vehicle. The bureau may print or issue electronically the clear certificate of title to the owner or subsequent assignee of the motor vehicle.
(3) If a motor vehicle is subject to an electronic lien, the certificate of title for the motor vehicle is considered to be physically held by the lienholder for purposes of compliance with state or federal odometer disclosure requirements.
(4) A certified copy of the bureau's electronic record of a lien is admissible in any civil, criminal, or administrative proceeding in Indiana as evidence of the existence of the lien. If a certificate of title is maintained electronically in a statewide electronic title system described in subsection (h)(3), a certified copy of the bureau's electronic record of the certificate of title is admissible in any civil, criminal, or administrative proceeding in Indiana as evidence of the existence and contents of the certificate of title.
(5) All individuals and lienholders who conduct at least twelve (12) lien transactions annually must use the statewide electronic lien and title system implemented under this section to record information concerning the perfection and release of a security interest in a vehicle.
(6) An electronic notice or release of a lien made through the statewide electronic lien and title system implemented under this section has the same force and effect as a notice or release of a lien made on a paper document.
(7) The bureau may convert an existing paper lien to an electronic lien upon request of the primary lienholder. The bureau, or a third party contracting with the bureau under this section, is authorized to collect a fee not to exceed three dollars ($3) for each conversion performed under this subdivision. A fee under this subdivision may not be charged to a state agency or its agents.
(8) Notwithstanding section 5 of this chapter, any requirement that a security interest or other information appear on a certificate of title is satisfied by the inclusion of that information in an electronic file maintained in an electronic title system.
(k) Nothing in this section precludes the bureau from collecting a title fee for the preparation and issuance of a title.
(l) The bureau may adopt rules under IC 4-22-2 to implement this section.
As added by P.L.81-2021, SEC.1. Amended by P.L.118-2022, SEC.6; P.L.93-2024, SEC.91.
