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HB 232 - Motor vehicles; mechanics' liens; constructive notice; superiority

Dixon, Harry D (168th)	Parham, Bobby E (122nd)

Status Summary	HC:	MotV	SC:		FR:	01/26/99	LA:	01/27/99	H - Read 2nd Time

First Reader Summary

A BILL to amend Article 3 of Title 40 of the Official Code of Georgia Annotated, relating to motor vehicle liens and security interests, so as to provide that perfection of a security interest in a vehicle of the type for which a certificate of title is required shall constitute constructive notice to mechanics; and for other purposes.

HB 232                                             LC 22 3320 
 
 
 
 
 
 
                        A BILL TO BE ENTITLED 
                               AN ACT 
 
 
  1- 1  To amend Article 3 of Title 40 of the Official Code of 
  1- 2  Georgia Annotated, relating to motor vehicle liens and 
  1- 3  security interests, so as to provide that perfection of a 
  1- 4  security interest in a vehicle of the type for which a 
  1- 5  certificate of title is required shall constitute 
  1- 6  constructive notice to mechanics; to provide that certain 
  1- 7  mechanics' liens on such vehicles shall be superior to all 
  1- 8  liens except for taxes and liens and security interests of 
  1- 9  which the mechanic had actual notice; to provide for related 
  1-10  matters; to repeal conflicting laws; and for other purposes. 
 
  1-11       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 
 
  1-12                           SECTION 1. 
 
  1-13  Article 3 of Title 40 of the Official Code of Georgia 
  1-14  Annotated, relating to motor vehicle liens and security 
  1-15  interests, is amended by striking in its entirety subsection 
  1-16  (b) of Code Section 40-3-50, relating to perfection of 
  1-17  security interests generally, and inserting in lieu thereof 
  1-18  the following: 
 
  1-19    "(b) A security interest is perfected by delivery to the 
  1-20    commissioner or to the county tag agent of the county in 
  1-21    which the seller is located, of the county in which the 
  1-22    sale takes place, of the county in which the vehicle is 
  1-23    delivered, or of the county wherein the vehicle owner 
  1-24    resides of the existing certificate of title, if any, and 
  1-25    an application for a certificate of title containing the 
  1-26    name and address of the holder of a security interest and 
  1-27    the required fee. The security interest is perfected as of 
  1-28    the time of its creation if the initial delivery to the 
  1-29    commissioner or local tag agent is completed within 20 
  1-30    days thereafter, regardless of any subsequent rejection of 
  1-31    the application for errors; otherwise, as of the date of 
  1-32    the delivery to the commissioner or local tag agent.  The 
  1-33    local tag agent shall issue a receipt or other evidence of 
  1-34    the date of filing of such application.  When the security 
  1-35    interest is perfected as provided for in this subsection, 
 
 
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  2- 1    it shall constitute notice to everybody of the security 
  2- 2    interest of the holder to everybody except as otherwise 
  2- 3    provided in Code Section 40-3-54." 
 
  2- 4                           SECTION 2. 
 
  2- 5  Said article is further amended by striking in its entirety 
  2- 6  subsection (a) of Code Section 40-3-54, relating to 
  2- 7  mechanics' liens, and inserting in its place the following: 
 
  2- 8    "(a) All mechanics of every sort shall have a special lien 
  2- 9    on any vehicle required to have a certificate of title by 
  2-10    Code Section 40-3-20 for work done, or for work done and 
  2-11    materials furnished, or for materials furnished in 
  2-12    repairing or servicing such vehicle. Perfection of the 
  2-13    lien by recording shall be as provided in Code Section 
  2-14    40-3-53. The lien may be asserted by retention of the 
  2-15    vehicle, and all contracts for repairs or service to 
  2-16    vehicles shall be deemed to incorporate a right of 
  2-17    retention by the mechanic to protect this lien until it is 
  2-18    paid or satisfied through foreclosure as provided in this 
  2-19    Code section. The lien may also be asserted by 
  2-20    surrendering the vehicle, giving credit, and foreclosing 
  2-21    the lien claim in the manner provided in this Code 
  2-22    section. If he surrenders possession of the vehicle to the 
  2-23    debtor, the mechanic shall record his claim of lien as 
  2-24    provided in Code Section 40-3-53. Such special lien shall 
  2-25    be superior to all liens except for taxes and such other 
  2-26    liens and security interests of which the mechanic had 
  2-27    actual or constructive notice before the work was done or 
  2-28    material furnished. The validity of the lien against third 
  2-29    parties shall be determined in accordance with this 
  2-30    chapter.  Perfection of a security interest in accordance 
  2-31    with Code Section 40-3-50 constitutes constructive notice 
  2-32    but not actual notice to mechanics." 
 
  2-33                           SECTION 3. 
 
  2-34  All laws and parts of laws in conflict with this Act are 
  2-35  repealed. 
 
 
 
 
 
 
 
 
 
 
 
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