§ 9-17-5-6 — Statewide electronic lien and title system; purposes; development of system; bureau to work with qualified vendors or qualified service providers; requirements; dates for voluntary and mandatory use

(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.

Legislative History

As added by P.L.81-2021, SEC.1. Amended by P.L.118-2022, SEC.6; P.L.93-2024, SEC.91.