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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
AMENDED
failure to return vehicle; repeal.
Purpose
Removes the class 6 felony classification for failure to return a motor vehicle subject to a security interest and removes the designation of such a vehicle as a stolen vehicle. Subjects a vehicle owner that does not return a motor vehicle subject to a security interest to license plate and vehicle registration suspension.
Background
A person commits unlawful failure to return a motor vehicle subject to a security interest if all of the following apply: 1) the person fails to make a payment on the lien for more than 90 days; 2) the secured creditor notifies the owner in writing, by certified mail return receipt requested, that the owner is 90 days late in making the payment and is in default; 3) the owner fails to cure the default within 30 days; and 4) with the intent to hinder or prevent the enforcement of the secured creditor's security interest, the owner knowingly fails to return the motor vehicle to the secured creditor or if the owner knowingly fails to allow the secured creditor to take possession of the motor vehicle (A.R.S. § 13-1813).
The original contract creating the security interest in the motor vehicle must contain the following information: 1) a statement that it is unlawful to fail to return a motor vehicle subject to a security interest within 30 days after receiving a notice of default; 2) a statement that notice of default will be mailed to the address on the loan agreement and that it is the responsibility of the owner to keep the listed address current; and 3) the maximum penalty for unlawful failure to return a motor vehicle subject to a security interest (A.R.S. § 13-1813).
The unlawful failure to return a motor vehicle subject to a property interest is a class 6 felony, and the vehicle involved is considered a stolen vehicle. If a law enforcement agency seizes the vehicle, the secured creditor must be responsible for all towing, storage and related fees or charges. It is a defense to a prosecution for unlawful failure to return a motor vehicle that: 1) the owner was physically incapacitated and unable to request or obtain permission of the secured creditor to retain the motor vehicle; 2) the motor vehicle itself was in a condition, through no intentional fault of the defendant, that it could not be returned to the secured creditor within the specified time; or 3) the owner has a statutorily outlined security interest (A.R.S. § 13-1813).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Repeals the statute relating to unlawful failure to return a motor vehicle subject to a security interest.
2. Removes the class 6 felony classification for failure to return a motor vehicle subject to a security interest and stipulates that the vehicle is no longer classified as stolen.
3. Modifies the written statement that a secured creditor must deliver to a vehicle owner that is 90 days late in making a payment by specifying that the motor vehicle's registration and assigned license plate will be suspended, rather than subjecting the vehicle owner to criminal prosecution.
4. Specifies that, if a motor vehicle was in a condition where it could not be returned to the secured creditor within the specified time frame, then the owner must notify the secured creditor of the condition of the motor vehicle in order to not be subject to possible license and registration suspension.
5. Allows a secured creditor, if a person does not return a motor vehicle that is subject to a security interest, to file an affidavit with the Arizona Department of Transportation (ADOT) stating that the person has not returned a motor vehicle that is subject to a security interest.
6. Requires ADOT to immediately suspend the registration of, and any license plate assigned to, the motor vehicle upon receipt of the affidavit.
7. Prohibits ADOT from transferring the motor vehicle's suspended registration or license plate or from reregistering the motor vehicle until the secured creditor notifies ADOT that the motor vehicle is recovered.
8. Becomes effective on the general effective date.
Amendments Adopted by Committee of the Whole
1. Removes the class 6 felony classification for failure to return a motor vehicle subject to a security interest and stipulates that the vehicle is no longer classified as stolen.
2. Modifies the written statement that a secured creditor must deliver to a vehicle owner that is 90 days late in making a payment by specifying that the motor vehicle's registration and assigned license plate will be suspended, rather than subjecting the vehicle owner to criminal prosecution.
3. Specifies that, if a motor vehicle was in a condition where it could not be returned to the secured creditor within the specified time frame, then the owner must notify the secured creditor of the condition of the motor vehicle in order to not be subject to possible license and registration suspension.
4. Allows a secured creditor, if a person does not return a motor vehicle that is subject to a security interest, to file an affidavit with ADOT stating that the person has not returned a motor vehicle that is subject to a security interest.
5. Requires ADOT to immediately suspend the registration of, and any license plate assigned to, the motor vehicle upon receipt of the affidavit.
6. Prohibits ADOT from transferring the motor vehicle's suspended registration or license plate or from reregistering the motor vehicle until the secured creditor notifies ADOT that the motor vehicle is recovered.
House Action Senate Action
MAPS 2/13/23 DP 15-0-0-0 JUD 3/16/23 DP 6-1-0
3rd Read 2/28/23 DPA 31-28-1
Prepared by Senate Research
April 11, 2023
ZD/SB/sr