AN ACT relating to motor vehicle titles.

UNOFFICIAL COPY 26 RS HB 144/EN
Page 1 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
AN ACT relating to motor vehicle titles. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 186A.295 is amended to read as follows: 3
(1) (a) Subject to the limitations in paragraph (c) of this subsection, any person or 4
entity having a motor vehicle or trailer that has been destroyed, to the extent 5
that its repair cannot be obtained through usual commercial repair services, at 6
a cost less than its retail value as prescribed by a nationally accepted used car 7
valuation guide or tool identified under KRS 304.20 -110, or from which two 8
(2) or more parts which typically bear a veh icle identification number placed 9
thereon by the manufacturer have been removed, or which he or she removes, 10
shall surrender the certificate of title for the vehicle for which he or she has a 11
certificate of title in his, or her, or another name, to the cou nty clerk of the 12
county in which the vehicle is located. The clerk shall immediately forward 13
the surrendered title to Frankfort with instructions for canceling the title. 14
(b) Any person or entity engaged in the sale of used motor vehicle or trailer parts, 15
or the recycling or salvage of them, shall surrender the certificate of title for 16
any vehicle in his or her possession, and for which he or she has a certificate 17
of title, whether in his or her or another name, if the vehicle is destroyed 18
within the meaning of paragraph (a) of this subsection, or from which two (2) 19
or more parts which typically bear a vehicle identification number placed 20
thereon by a manufacturer have been removed, or which he or she removes, to 21
the county clerk of the county in which the v ehicle is located. The clerk shall 22
immediately forward the surrendered title to Frankfort with instructions for 23
canceling the title. 24
(c) 1. The calculation of the cost of repair referenced in paragraph (a) of 25
this subsection shall only include labor and pa rts for actual damage to 26
the suspension, motor, transmission, frame or unibody, and 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 2 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
designated structural components, and shall not include cosmetic 1
damages. 2
2. Subparagraph 1. of this paragraph shall not alter the calculation of 3
the cost of repair for any existing obligation of an insurer to pay for 4
the cost of parts and labor for cosmetic repairs to a motor vehicle or 5
trailer that affects the vehicle's appearance in accordance with Section 6
2 of this Act. 7
(d) The surrender of the certificate of title pursuant to this section shall be made 8
within ten (10) working days, next succeeding the day when the vehicle was 9
received, destroyed, or next succeeding the day duri ng which a second part 10
was removed. 11
(2) Each county clerk shall receive without charge, a certificate surrendered in 12
accordance with this section, cancel it, and remit it to the Department of Vehicle 13
Regulation, and take any other action related to it, as required by the Department of 14
Vehicle Regulation. 15
(3) If the calculation of the cost of repair in subsection (1) of this section exempts a 16
vehicle from having the certificate of title surrendered, the title shall be branded 17
as a salvage title in accordance with Section 2 of this Act. 18
Section 2. KRS 186A.520 is amended to read as follows: 19
(1) Except as provided in KRS 186A.555, a salvage title shall be obtained by the owner 20
of a motor vehicle that meets the following definition of a salvage vehicle: 21
(a) 1. A vehicle that[which] has been wrecked, destroyed, or damaged, to the 22
extent that the total estimated or actual cost of parts and labor to rebuild 23
or reconstruct the vehicle to its preaccident condition and for legal 24
operation on the roads or highways, not including the cost of parts and 25
labor to reinstall a deployed airbag system, exceeds seventy -five percent 26
(75%) of the retail value of the vehicle, as prescribed by a nationally 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 3 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
accepted used car valuation guide or tool identified under KRS 304.20 -1
110. 2
2.[(b)] The value of repair parts for purposes of this 3
paragraph[definition] shall be determined by using the current 4
published retail cost of the parts equal in kind and quality to the parts to 5
be replaced or the actual retail cost of the repair parts used in repair. 6
3.[(c)] The labor costs of repairs for purposes of this paragraph[section] 7
shall be computed by using the hourly labor rate and time allocations 8
which are reasonable and customary in the automobile repair indus try in 9
the community where the repairs are performed. 10
4.[(d)] Airbag reinstallation costs which are excluded from the seventy -11
five percent (75%) computation as set forth in subparagraph 12
1.[paragraph (a)] of this paragraph[subsection] shall be included by a n 13
insurer in the computation of the total physical damage estimate 14
according to the terms and conditions of individual policies, provided 15
that the total costs payable by an insurer do not exceed the total retail 16
value of the vehicle; or 17
(b) A vehicle that is exempt from certificate of title surrender under subsection 18
(3) of Section 1 of this Act. 19
(2) The owner or an authorized agent of a motor vehicle that meets the definition of a 20
salvage vehicle as set forth in subsection (1) of this section shall, within fifteen (15) 21
days from the receipt of all necessary paperwork required by this chapter, submit an 22
application to the county clerk, on a form prescribed by the Department of Vehicle 23
Regulation, for a salvage title, accompanied by a properly endorsed certif icate of 24
title and any lien satisfactions, if any appear, as may be required. 25
(3) The county clerk shall retain a copy of each salvage title application received and 26
shall forward the original and its supporting documents to the Department of 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 4 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
Vehicle Regulation in a manner similar to that for handling of an application for a 1
title. 2
(4) The county clerk shall rely on the information provided by the owner or authorized 3
agent, including a county of residence designation, on: 4
(a) Any approved, notarized state f orm utilized in lien titling or the title transfer 5
process signed by the owner or authorized agent; and 6
(b) Any document submitted during the transfer of a salvage vehicle from an 7
owner to an insurer. 8
Reliance on the foregoing by the county clerk shall re lieve the office of the county 9
clerk from liability to any third party claiming failure to comply with this section. 10
(5) The Department of Vehicle Regulation shall process the salvage title application in 11
a manner similar to that used in processing a title application and the salvage title 12
shall be delivered in a like manner of a title. Salvage titles shall be construed as 13
proof of ownership of a vehicle in a state as to be unusable upon the highways of 14
the Commonwealth. 15
(6) A vehicle shall not be issued a registration for highway use as long as a salvage title 16
is in force. The only time a vehicle with a salvage title may be operated upon the 17
highways of the Commonwealth is when it is in route to or from an inspection by 18
the certified inspector prior to obta ining a certificate of title after having been 19
rebuilt as per KRS 186.115. 20
(7) Notwithstanding the provisions of KRS 369.103, when a salvage vehicle is 21
transferred from an owner to an insurer, the following shall be exempted from the 22
requirements of notari zation, including exemption from the notarization of 23
electronic signature requirements of KRS Chapter 423: 24
(a) The transfer of ownership on the certificate of title; 25
(b) Any power of attorney required in connection with the transfer of ownership 26
to the insurer; 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 5 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
(c) Any required odometer disclosure statement; 1
(d) The application for a salvage certificate of title; and 2
(e) The transfer of ownership on the salvage certificate of title issued. 3
(8) Subsections (2) to (5) of this section shall not apply to applications for salvage title 4
using the electronic title application and registration system established under KRS 5
186A.017. 6
Section 3. KRS 186A.190 is amended to read as follows: 7
(1) Except as provided in subsection (6) of this section and in KRS 355.9 -311(4), the 8
perfection of a security interest in any property for which has been issued a 9
Kentucky certificate of title shall be by notation on the certificate of title which 10
shall be deemed to have occurred when the provisions of subsection (3) of this 11
section have been complied with. Discharge of a security interest shall be by 12
notation on the certificate of title. Notation shall be made by the entry of 13
information required by subsection (9) of this section into the Automated Vehicle 14
Information System. The notation of the security interest on the certificate of title 15
shall be in accordance with this chapter and shall remain effective from the date on 16
which the security interest is noted on the certificate of title for a period of ten (10) 17
years, or, in the case of a manufactured home, for a period of thirty (30) years, or 18
until discharged under this chapter and KRS Chapter 186. The filing of a 19
continuation statemen t within the six (6) months preceding the expiration of the 20
initial period of a notation's effectiveness extends the expiration date for five (5) 21
additional years, commencing on the day the notation would have expired in the 22
absence of the filing. Succeedi ng continuation statements may be filed in the same 23
manner to continue the effectiveness of the initial notation. 24
(2) A motor vehicle dealer, a secured party or its representative, an assignee of a retail 25
installment contract lender, the cabinet, or a coun ty clerk shall rely on a county of 26
residence designated by the debtor on any approved, notarized state form utilized in 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 6 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
lien titling or the title transfer process signed by the debtor. Reliance on the 1
foregoing by the motor vehicle dealer, secured parties, cabinet, and county clerk 2
shall relieve those persons from liability to any third party claiming failure to 3
comply with this section. 4
(3) Except as provided in subsection (6) of this section, the notation of security 5
interests relating to property require d to be titled under this chapter in Kentucky 6
through the cabinet shall be done in the office of a county clerk. The notation of a 7
security interest shall reflect the county in which the debtor resides as determined 8
by subsections (2) and (4) of this secti on. The security interest shall be deemed to 9
be noted on the certificate of title and perfected, or deemed perfected at the time the 10
security interest attaches as provided in KRS 355.9 -203, if in compliance with KRS 11
186A.195(8), when a title lien statement: 12
(a) Is received by the county clerk, together with the required fees; 13
(b) Describes the titled vehicle, or vehicle to be titled, by year, model, make, and 14
vehicle identification number; 15
(c) Provides the name of the secured party, or a representative of t he secured 16
party, together with the additional information about the secured party 17
required by subsection (9) of this section with reasonable particularity; and 18
(d) Includes the date and time -stamped entry of the notation of the security 19
interest by the co unty clerk of the required information in the Automated 20
Vehicle Information System (AVIS), or its successor title processing system 21
maintained by the Division of Motor Vehicle Licensing of the Transportation 22
Cabinet. 23
(4) Except as provided in subsection (6 ) of this section, if the debtor is other than a 24
natural person, the following provisions govern the determination of the county of 25
the debtor's residence: 26
(a) A partnership shall be deemed a resident of the county in which its principal 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 7 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
place of business in this state is located. If the debtor does not have a place of 1
business in this state, then the debtor shall be deemed a nonresident for 2
purposes of filing in this state; 3
(b) A limited partnership organized under KRS Chapter 362 or as defined in KRS 4
362.2-102(14) shall be deemed a resident of the county in which its principal 5
place of business is located, as set forth in its certificate of limited partnership 6
or most recent amendment thereto filed pursuant to KRS Chapter 362 or 7
362.2-202. If the office is not located in this state, the debtor shall be deemed 8
a nonresident for purposes of filing in this state; 9
(c) A limited partnership not organized under the laws of this state and authorized 10
to do business in this state shall be deemed a resident of the co unty in which 11
the office of its process agent is located, as set forth in the designation or most 12
recent amendment thereto filed with the Secretary of State of the 13
Commonwealth of Kentucky; 14
(d) A corporation organized under KRS Chapter 271B, 273, or 274 or a limited 15
liability company organized under KRS Chapter 275 shall be deemed a 16
resident of the county in which its registered office is located, as set forth in 17
its most recent corporate filing with the Secretary of State which officially 18
designates its current registered office; 19
(e) A corporation not organized under the laws of this state, but authorized to 20
transact or do business in this state under KRS Chapter 271B, 273, or 274, or 21
a limited liability company not organized under the laws of this state, b ut 22
authorized to transact business in this state under KRS Chapter 275, shall be 23
deemed a resident of the county in which its registered office is located, as set 24
forth in its most recent filing with the Secretary of State which officially 25
designates its current registered office; 26
(f) A cooperative corporation or association organized under KRS Chapter 272 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 8 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
shall be deemed a resident of the county in which its principal business is 1
transacted, as set forth in its articles of incorporation or most recent 2
amendment thereto filed with the Secretary of State of the Commonwealth of 3
Kentucky; 4
(g) A cooperative corporation organized under KRS Chapter 279 shall be deemed 5
a resident of the county in which its principal office is located, as set forth in 6
its articles o f incorporation or most recent amendment thereto filed with the 7
Secretary of State of the Commonwealth of Kentucky; 8
(h) A business trust organized under KRS Chapter 386 shall be deemed a resident 9
of the county in which its principal place of business is lo cated, as evidenced 10
by the recordation of its declaration of trust in that county pursuant to KRS 11
Chapter 386; 12
(i) A credit union organized under Subtitle 6 of KRS Chapter 286 shall be 13
deemed a resident of the county in which its principal place of busines s is 14
located, as set forth in its articles of incorporation or most recent amendment 15
thereto filed with the Secretary of State of the Commonwealth of Kentucky; 16
and 17
(j) Any other organization defined in KRS 355.1 -201 shall be deemed a resident 18
of the county in which its principal place of business in this state is located, 19
except that any limited liability company, limited liability partnership, limited 20
partnership, or corporation not organized under the laws of this state and not 21
authorized to transact or d o business in this state shall be deemed a 22
nonresident for purposes of filing in this state. If the organization does not 23
have a place of business in this state, then it shall be deemed a nonresident for 24
purposes of filing in this state. 25
If the debtor doe s not reside in the Commonwealth, the notation of the security 26
interest shall be done in the office of the county clerk in which the property is 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 9 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
principally situated or operated. Notwithstanding the existence of any filed 1
financing statement under the prov isions of KRS Chapter 355 relating to any 2
property registered or titled in Kentucky, the sole means of perfecting and 3
discharging a security interest in property for which a certificate of title is required 4
by this chapter is by notation on the property's certificate of title under the 5
provisions of this chapter or in accordance with the provisions of KRS 186.045(3). 6
In other respects the security interest is governed by the provisions of KRS Chapter 7
355. 8
(5) Except as provided in subsection (6) of this sec tion, before ownership of property 9
subject to a lien evidenced by notation on the certificate of title may be transferred, 10
the transferor shall obtain the release of the prior liens in his or her name against the 11
property being transferred. Once a security interest has been noted on the owner's 12
title, a subsequent title shall not be issued by any county clerk free of the notation 13
unless it has been noted in the system of record established under KRS 186A.195 14
that the security interest has been discharged. If this requirement is met, information 15
relating to any security interest shown on the title as having been discharged may be 16
omitted from the title to be issued by the clerk. If information relating to the 17
discharge of a security interest is presented to a clerk under the provisions of KRS 18
186.045(3), the clerk shall discharge the security interest and remove the lien 19
information from AVIS. 20
(6) Notwithstanding subsections (1) to (5) of this section, a county clerk shall, 21
following inspection of the vehicle by the sheriff, to determine that the vehicle has 22
not been stolen, issue a new ownership document to a vehicle, clear of all prior 23
liens, to a person after he or she provides to the county clerk an affidavit devised by 24
the Transportation Cabinet and comple ted by the person. The ownership document 25
presented as a result of this affidavit shall be in accordance with subsection (7) of 26
this section. In the affidavit, the affiant shall attest that: 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 10 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
(a) The affiant or the agent of the affiant possesses the vehicle; 1
(b) Before he or she provided the notices required by paragraphs (c) and (d) of 2
this subsection: 3
1. A debt on the vehicle has been owed him or her for more than thirty (30) 4
days; 5
2. Within thirty (30) days of payment of damages by an insurance 6
company and receipt by the current owner of the motor vehicle or 7
lienholder of damages pursuant to a claim settlement which required 8
transfer of the vehicle to the insurance company, the insuran ce company 9
has been unable to obtain: 10
a. A properly endorsed certificate of title on the vehicle from the 11
current owner; and 12
b. If applicable, any lien satisfactions; or 13
3. a. The vehicle was voluntarily towed or transported pursuant to a 14
request of the current owner or an insurance company that a motor 15
vehicle dealer, licensed as a used motor vehicle dealer and motor 16
vehicle auction dealer, take possession of and store the motor 17
vehicle in the regular course of business; and 18
b. Within forty -five (45) days of taking possession of the motor 19
vehicle, the motor vehicle dealer has not been paid storage fees by 20
the current owner or lienholder and has not been provided both a 21
properly endorsed certificate of title and if applicable, any lien 22
satisfactions; 23
(c) More than thirty (30) days before presenting the affidavit to the county clerk, 24
the affiant attempted to notify the owner of the vehicle and all known 25
lienholders, including those noted on the title, by certified mail, return receipt 26
requested, or by a nation ally recognized courier service, of his or her name, 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 11 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
address, and telephone number as well as his or her intention to obtain a new 1
title or salvage title, as applicable, clear of all prior liens, unless the owner or 2
a lienholder objects in writing; 3
(d) More than fourteen (14) days before presenting the affidavit to the county 4
clerk, the affiant had published a legal notice stating his or her intention to 5
obtain title to the vehicle. The legal notice appeared at least twice in a seven 6
(7) day period in a new spaper with circulation in the county. The legal notice 7
stated: 8
1. The affiant's name, address, and telephone number; 9
2. The owner's name; 10
3. The names of all known lienholders, including those noted on the title; 11
4. The vehicle's make, model, and year; and 12
5. The affiant's intention to obtain title to the vehicle unless the owner or a 13
lienholder objects in writing within fourteen (14) days after the last 14
publication of the legal notice; and 15
(e) Neither the owner nor a lienholder has objected in writing to the affiant's right 16
to obtain title to the vehicle. 17
(7) (a) If subsection (6)(b)1. of this section applies, the new ownership document 18
shall be a title. 19
(b) If subsection (6)(b)2. or 3. of this section applies, the new ownership 20
document shall be a salvage title if the vehicle meets the requirements for a 21
salvage title as stated in KRS 186A.520[(1)(a)]. 22
(c) If subsection (6)(b)2. or 3. of this section applies and the vehicle does not 23
meet the requirements for a salvage title as stated in KRS 186A.520 [(1)(a)], 24
the new ownership document shall be a title. 25
(8) No more than two (2) active security interests may be noted upon a certificate of 26
title. 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 12 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
(9) In noting a security interest upon a certificate of title, the county clerk shall ensure 1
that the certificate of title bears the lienholder's name, mailing address and zip code, 2
the date the lien was noted, the notation number, and the county in which the 3
security interest was noted. The clerk shall obtain the information required by this 4
subsection for notation up on the certificate of title from the title lien statement 5
described in KRS 186A.195. 6
(10) For all the costs incurred in the notation and discharge of a security interest on the 7
certificate of title, the county clerk shall receive the fee prescribed by KRS 64.012. 8
The fee prescribed by this subsection shall be paid at the time of submittal of the 9
title lien statement described in KRS 186A.195. 10
(11) A copy of the application, certified by the county clerk, indicating the lien will be 11
noted on the certificate of title shall be forwarded to the lienholder. 12
(12) (a) Any lien or security interest filed under this chapter may be electronically 13
transmitted to the cabinet through the electronic title application and 14
registration system. 15
(b) Notwithstanding the provis ions of this section and KRS 186A.015 and 16
186A.074 that require a lien to be noted on the face of the title, if there are 17
one (1) or more liens on a motor vehicle, the cabinet may electronically notify 18
the first lienholder of any additional liens. 19
(c) Subsequent lien satisfactions may be electronically transmitted to the cabinet 20
and shall include the name and address of the person satisfying the lien. 21
(d) When liens and lien satisfactions are electronically transmitted, a clean 22
certificate of title shall not be issued until the last lien is satisfied. 23
(e) A duly certified copy of the cabinet's electronic record of the lien shall be 24
admissible in any civil, criminal, or administrative proceedings in this state as 25
evidence of the existence of the lien. 26
(13) If a security interest expires without being renewed , the cabinet shall remove the 27
UNOFFICIAL COPY 26 RS HB 144/EN
Page 13 of 13
HB014420.100 - 279 - XXXX 3/31/2026 7:32 PM Engrossed
lien from the certificate of title in the AVIS system. 1