TCA § 55-3-114 — Issuance of certificate of title — Form and contents — Delivery — Lienors holding certificate

The commissioner shall, upon receipt of an application for a certificate of title, and after determining by an examination of its records that the applicant is entitled to a certificate of title, issue the same. Except as provided by subdivision (a)(3), the several county clerks are designated deputies to perform, at their option, duties in connection with services normally performed by the department related to the issuance of titles or issuance of replacement certificates of title. The several county clerks shall perform duties in connection with services related to the notation of liens and encumbrances and the extension of mortgages on certificates of title. For each certificate of title issued by a county clerk, the department shall pay the clerk a fee of two dollars ($2.00). For each certificate of title issued by a county clerk, the department shall pay the clerk an additional fee of thirty-five cents (35¢), which funds shall be earmarked for office supplies and equipment required to perform titling and registration services. Such funds shall be preserved for these purposes and shall not revert to the county general fund at the end of a budget year if unexpended. For purposes of this subsection (a), the clerk shall be deemed to have issued the certificate of title if the clerk performed the examination of the application for a certificate of title and entered the required data into the state computer system for the purpose of printing or electronically producing the certificate of title. All certificates of title shall be numbered numerically and shall contain upon the face a description of the vehicle, including the make, model, type of body, serial number of the vehicle and the engine or other number of the vehicle and, in addition, a statement of the owner's title and of all liens and encumbrances upon the vehicle described, whether possession is held by the owner under a contract of conditional sale or other agreement and the number of the last certificate of title issued for the same vehicle, and other information as may be determined to be necessary by the commissioner. Joint ownership of a motor vehicle by two (2) or more persons shall be indicated on the certificate of title by the use of the word “and.” The certificate of title shall contain forms for assignment of title and warranty by the owner, with space for notation of liens and encumbrances upon the vehicle at the time of transfer. All certificates of title shall include an abbreviation designating all states, that the department has knowledge of, including Tennessee, where a vehicle has been previously titled. The abbreviation shall be the standard two-letter abbreviation used in addresses by the United States postal service. The certificate of title shall be delivered to the owner in the event no lien or encumbrance appears thereon. Otherwise, the certificate of title shall be delivered to the person holding the first lien or encumbrance upon the vehicle as shown in the certificate, and shall be retained by the holder of the first lien or encumbrance until the lien or encumbrance shall be discharged, at which time a notation shall be made on the certificate of title, setting forth the fact that the lien or encumbrance has been discharged, which shall be signed by the lienor. The lienor shall then deliver the certificate of title to the owner within seven (7) business days from the owner's request, unless the certificate of title shall show on its face one (1) or more liens or encumbrances still outstanding, in which event the certificate of title shall be delivered to the next prior lienor, either in person or by registered mail, and the lienor shall within seventy-two (72) hours notify the department of the discharge of this lien by registered mail with return receipt demanded. As used in this subsection (c), “owner” includes any person or entity who lawfully acquires a motor vehicle and pays off the outstanding lien or encumbrance on the vehicle. In the event any lien or encumbrance which is subordinate to any other outstanding lien or encumbrance is discharged or released, the holder of the sublien or encumbrance shall immediately procure the certificate of title from the lienor in whose possession it is being held for the sole purpose of discharging the lien as provided by subsection (c), and thereupon shall return the certificate of title to the person from whom it was obtained, notifying the department of the discharge of this lien, or, in the alternative, the sublienor may immediately forward to the department a release setting forth the fact that the lien or encumbrance has been discharged, which shall be signed by the lienor, and the department shall note the release of the lien upon the certificate of title when the certificate of title shall next be in the physical possession of the department. With respect to the delegation of duties and the resultant performance of services, the commissioner is authorized to compensate the county clerk at the rates set forth in applicable statutes, upon receipt from the county clerk of confirmation of services in a form acceptable to the commissioner. The prior requirement of a written contract is eliminated. The department may, in its sole discretion, contract with any business entity that maintains a fleet of two hundred (200) or more motor vehicles to allow the business entity to provide any specific service, or all services, normally performed by the department or by a county clerk relative to the titling and the registration of otherwise qualified motor vehicles within the business entity's fleet of motor vehicles. The existence of such a contract shall not be interpreted to diminish, restrict, or limit the authority of the department to administer or enforce applicable provisions of any law with which a motor vehicle within the contracting business entity's fleet is not in compliance. The contract shall require that the department group vehicles by county of domicile. The department shall collect and distribute to county governments and county government officials the same taxes and fees as would be applicable if the vehicles were registered in the county. Contracts with business entities entered into by the department under this subsection (f) shall set forth in detail the duties and responsibilities of each party, shall require compliance with all applicable federal and state laws, shall not contain provisions that are contrary to any federal or state statute, and shall comply with the Federal Drivers' Privacy Protection Act (18 U.S.C. § 2721 et seq.), and the Uniform Motor Vehicle Records Disclosure Act, compiled in chapter 25 of this title. A contract entered into under the authority of this subsection (f) shall be at no cost to the department except for the cost of license plates, decals, forms and administrative costs that the department would normally incur in titling and registering motor vehicles within the business entity's fleet were it not for such contract. A contract entered into under the authority of this subsection (f) shall, in addition to all other requirements included in the contract, require the contracting business entity to: Keep all records, inventories, copies and other related paperwork that a county clerk would be required to keep if the clerk were titling and registering motor vehicles within the contracting business entity's fleet under chapters 1-6 of this title; Forward to the department, no later than the tenth day of each month, copies of all applications, certificates of title, certificates of registration, completed forms, or other related documents or paperwork required by the department that have been issued, completed or processed by the contracting business entity during the prior month; No later than the tenth day of each month, remit to the department all fees and other moneys related to the titling and registering of motor vehicles within the contracting business entity's fleet during the prior month that would have been required to be collected by the department or a county clerk were it not for the contract entered into under this subsection (f); and Timely make all reports that the department requires, including all applicable reports that a county clerk would be required to make if the clerk were titling and registering motor vehicles within the contracting business entity's fleet under chapters 1-6 of this title. A delinquency in forwarding to the department any remittance, report, application, document, form or paperwork required of the contracting entity by law or by contract shall result in a penalty of five percent (5%) of the delinquent remittance, or the remittance associated with the delinquent report, application, document, form or paperwork, as the case may be, for each thirty (30) days or fraction of the thirty (30) days that the delinquency continues; provided, however, that the penalty may be waived by the commissioner upon the showing of good and reasonable cause. In no case shall the penalty provided for in this subdivision (f)(5) exceed twenty-five percent (25%) of the remittance base. If the department enters into a contract with a business entity under this subsection (f) and the business entity fails to strictly comply with any requirement or provision of the contract, the contract may be rescinded in its entirety and cancelled at the discretion of the commissioner; provided, however, that the effective date of the cancellation shall be thirty (30) business days after the date the department gives notice by certified mail to the contracting business entity that the contract is being rescinded and cancelled.