Amends existing law to provide for cancellation or discharge of an encumbrance by an Idaho vehicle dealer and to allow electronic motor vehicle records as evidence of ownership.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 742 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO VEHICLE TITLES; AMENDING SECTION 49-504, IDAHO CODE, TO PROVIDE2 FOR ELECTRONIC RECORDS OF OWNERSHIP; AMENDING SECTION 49-511, IDAHO3 CODE, TO ESTABLISH PROVISIONS REGARDING CANCELLATION OR DISCHARGE OF4 LIENS OR ENCUMBRANCES BY IDAHO DEALERS; AND DECLARING AN EMERGENCY AND5 PROVIDING AN EFFECTIVE DATE.6

Be It Enacted by the Legislature of the State of Idaho:7

SECTION 1. That Section 49-504, Idaho Code, be, and the same is hereby8 amended to read as follows:9 49-504. APPLICATIONS TO DEPARTMENT FOR CERTIFICATES -- PROCEDURE --10 IDENTIFICATION NUMBERS. (1) Application for a certificate of title shall be11 made upon a form furnished by the department and shall contain the owner's12 Idaho driver's license number, Idaho identification card number or social13 security number or individual taxpayer identification number. In the case14 of a business, the employer tax identification number is required. Every15 application shall also contain the owner's true and full legal name. In16 the event that the owner does not possess a social security number, Idaho17 driver's license number, Idaho identification card number or individual18 taxpayer identification number, the owner shall present written documenta-19 tion sufficient to the department to determine that no social security num-20 ber has been issued. In the event that a business, trust, or other statuto-21 rily created entity is not required to have and does not possess an employer22 tax identification number, the applicant shall provide a written statement23 certifying that the entity does not possess an employer tax identification24 number. The form must contain the owner's physical domicile address or,25 in the case of a business, trust or other statutorily created entity, such26 entity's physical address and any mailing address if different from the27 physical address. If the owner has submitted an application pursuant to the28 provisions of chapter 58, title 19, Idaho Code, then the owner may state, in29 the application required pursuant to this section, the applicant's alterna-30 tive Idaho mailing address in place of his or her physical domicile address.31 Such application must be signed by the owner and contain a full description32 of the vehicle, including the make, identification numbers, and the odometer33 reading at the time of sale or transfer, and whether the vehicle is new or34 used, together with a statement of the applicant's title and of any liens or35 encumbrances upon the vehicle, and the name and address of the person to whom36 the certificate of title shall be delivered, and any other information as the37 department may require. The application shall be filed with the department38 and, if a certificate of title has previously been issued for that vehicle in39 this state, shall be accompanied by the certificate of title duly assigned,40 unless otherwise provided for in this chapter. The department may promul-41 gate rules to provide for exceptions to the odometer requirement. Social42

2 security numbers collected shall not appear on certificates of title, and1 all applications on file shall be exempt from disclosure, except as provided2 in sections 49-202, 49-203 and 49-203A, Idaho Code.3 (2) If the current certificate of title was not issued for the vehicle4 in this state, the application, unless otherwise provided for in this chap-5 ter, shall be accompanied by a certificate of title, bill of sale, electronic6 motor vehicle record, or other evidence of ownership required by the law of7 any other jurisdiction from which the vehicle was brought into this state and8 a vehicle identification number inspection completed by any city, county or9 state peace officer or other special agent authorized by the department.10 (3) In the case of a new vehicle being titled for the first time, no cer-11 tificate of title or registration shall be issued unless the application is12 endorsed by a franchised new vehicle dealer licensed to sell a new vehicle.13 Each application shall be accompanied by a statement completed by the fran-14 chised new car dealer that it is authorized to transfer the vehicle to the15 purchaser. The dealer shall retain in its records a manufacturer's certifi-16 cate of origin or manufacturer's statement of origin executed by the manu-17 facturer and delivered to his agent or his franchised vehicle dealer. The18 certificate or statement of origin shall be in a form prescribed by the board19 and shall contain the year of manufacture or the model year of the vehicle,20 the manufacturer's vehicle identification number, the name of the manufac-21 turer, the number of cylinders, a general description of the body, if any,22 and the type or model. Upon sale of a new vehicle, the manufacturer or his23 agent or franchised dealer shall execute and deliver to the purchaser an as-24 signment of the certificate or statement, together with any lien or encum-25 brance to which the vehicle is subject. The certificate or statement will be26 retained by the dealer for five (5) years so that it is available for inspec-27 tion by the department.28 (4) The department shall retain the evidence of title presented by29 the applicant and on which the certificate of title is issued. The depart-30 ment shall maintain an identification numbers index of registered vehicles31 except that said index is not required to include operators who have been32 issued a certificate of number or nonresident user certificate pursuant to33 sections 67-7122 and 67-7124, Idaho Code, and, upon receiving an applica-34 tion for a certificate of title shall first check the identification number35 shown in the application against the index. The department, when satisfied36 that the applicant is the owner of the vehicle and that the application is in37 proper form, shall issue in the name of the owner of the vehicle a certificate38 of title bearing a title number, the date issued and a description of the39 vehicle as determined by the department, together with a statement of the40 owner's title and of all liens or encumbrances upon the vehicle, and whether41 possession is held by the owner under a lease, contract or conditional sale,42 or other like agreement.43 (5) In all cases of transfer of vehicles, the application for certifi-44 cates of title shall be filed within thirty (30) calendar days after the de-45 livery of the vehicles. Licensed dealers need not apply for certificate of46 title for vehicles in stock or when they are acquired for stock purposes.47 (6) In the case of the sale of a vehicle by a dealer to a general pur-48 chaser or user, the certificate of title shall be obtained in the name of the49 purchaser by the dealer upon application signed by the purchaser. If a lien50

3 is to be recorded, the title documentation as required in this section shall1 be submitted to the department by the dealer or the lienholder upon appli-2 cation signed by the purchaser. A copy of this application shall be given3 to the purchaser to be used as a seventy-two (72) hour temporary permit,4 unless the application is submitted by an electronic means approved by the5 department, in which case a forty-five (45) calendar day temporary permit6 may be issued. In all other cases, the certificates shall be obtained by the7 purchaser and the certificate of title properly assigned and dated by the8 seller, or the seller's bill of sale shall serve as a seventy-two (72) hour9 permit. The seventy-two (72) hour time period for temporary permits shall10 be calculated excluding weekend days and legal holidays observed by the11 state of Idaho. These temporary permits allow operation of any noncommer-12 cial vehicle or unladened commercial vehicle or vehicle combination without13 license plates for the period of time specified in the permit. A ladened14 commercial vehicle or vehicle combination may also operate without license15 plates for the period of time specified in the temporary permit, provided16 that the owner or operator has also obtained a permit issued under the provi-17 sions of section 49-432, Idaho Code.18 (7) If the vehicle has no identification number, then the department19 shall designate an identification number for that vehicle at the time of is-20 suance of the certificate of title. The identification number shall be per-21 manently affixed to or indented upon the frame of the vehicle and legibly22 maintained by the owner at all times while a certificate of title to the vehi-23 cle shall be issued and outstanding.24 (8) An EVC provider authorized pursuant to section 49-401C, Idaho Code,25 may act on behalf of the department in receiving, processing, and transmit-26 ting applications for title and any related fees to the department. The se-27 curity, oversight, and processing requirements in chapter 4, title 49, Idaho28 Code, shall also apply to titling transactions conducted by an EVC provider.29 (9) The department may allow a person to submit a required document by30 using electronic media deemed feasible by the department instead of requir-31 ing an original document. If a signature on a document is required by law and32 the document is submitted electronically, the signature requirement will33 be satisfied by an authenticated electronically submitted signature. An34 electronically submitted document, once accepted by the department, shall35 be deemed the same as an original document and shall be admissible in all36 administrative, quasi-judicial, and judicial proceedings.37

SECTION 2. That Section 49-511, Idaho Code, be, and the same is hereby38 amended to read as follows:39 49-511. CANCELLATION OR DISCHARGE OF LIEN OR ENCUMBRANCE. (1) When a40 lien or encumbrance is canceled or discharged, the lienholder shall provide41 notice of such cancellation or discharge to the department within thirty42 (30) days. If the lienholder was holding the paper certificate of title,43 he shall note the cancellation or discharge on the certificate of title in44 the space provided, over his signature, or by some other legal document,45 discharging the encumbrance, and shall deliver the paper certificate of46 title to the owner within thirty (30) days of receipt of payoff of the encum-47 brance. If the lienholder was holding an electronic title, he shall send the48 department an electronic transaction that directs the department to provide49

4 a paper title to the owner free of the lienholder's lien within thirty (30)1 days of receipt of payoff of the encumbrance.2 (2)(a) Notwithstanding the provisions of subsection (1) of this sec-3 tion, when an Idaho vehicle dealer licensed pursuant to chapter 16,4 title 49, Idaho Code, cancels or discharges a lien or encumbrance, the5 lienholder shall provide notice of such cancellation or discharge to6 the department within ten (10) business days of receipt of verified7 funds. If the lienholder was holding the paper certificate of title,8 such lienholder shall note the cancellation or discharge on the cer-9 tificate of title in the space provided, over his signature, or by some10 other legal document, discharging the encumbrance. If the lienholder11 has received authorization from the current owner to do so, by personal12 notification from the current owner, by power of attorney, or by other13 legal document granted to a dealer, the lienholder shall send the paper14 certificate of title to the dealer within ten (10) business days of re-15 ceipt of verified funds to pay off the encumbrance.16 (b) For the purposes of this subsection, "verified funds" means funds17 when such funds credit to the lienholder's account and become final in18 accordance with the law or rules applicable to the method by which the19 funds were transmitted to the lienholder.20

SECTION 3. An emergency existing therefor, which emergency is hereby21 declared to exist, this act shall be in full force and effect on and after22 July 1, 2026.23