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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026
By: Senator(s) Seymour, Younger, England,
Carter
SENATE BILL NO. 2856
AN ACT TO AMEND SECTION 63-21-43, MISSISSIPPI CODE OF 1972, 1
TO PROVIDE THAT A SECURITY INTEREST IN A MOTOR VEHICLE MAY NOT BE 2
PERFECTED WHILE THE VEHICLE IS SUBJECT TO A VALID STATUTORY 3
POSSESSORY LIEN; TO REQUIRE A SECURED PARTY SEEKING TO PERFECT A 4
SECURITY INTEREST TO CERTIFY TO THE DEPARTMENT OF REVENUE THAT NO 5
SUCH POSSESSORY LIEN EXISTS OR OBTAIN WRITTEN CONSENT FROM THE 6
HOLDER OF SUCH A LIEN; TO PROVIDE THAT ANY SECURITY INTEREST FILED 7
IN VIOLATION OF THIS ACT SHALL BE UNPERFECTED AGAINST THE HOLDER 8
OF THE POSSESSORY LIEN AND SUBORDINATE IN PRIORITY TO THAT LIEN; 9
TO BRING FORWARD SECTIONS 63-21-16, 75-9-333, 85-7-107 AND 10
85-7-251, MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE 11
AMENDMENT; AND FOR RELATED PURPOSES. 12
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 13
SECTION 1. Section 63-21-43, Mississippi Code of 1972, is 14
amended as follows: 15
63-21-43. (1) Unless excepted by Section 63-21-41, a 16
security interest in a vehicle, manufactured home or mobile home 17
of a type which a certificate of title is required is not valid 18
against creditors of the owner or subsequent transferees or 19
lienholders of the vehicle, manufactured home or mobile home 20
unless perfected as provided in this chapter. 21
(2) (a) A security interest is perfected at the time the 22
owner signs a security agreement describing the vehicle, 23
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manufactured home or mobile home, the secured party gives value, 24
the owner has rights in the vehicle, manufactured home or mobile 25
home, and an application for certificate of title signed by the 26
owner is presented to a designated agent; provided, however, that 27
a purchase money security interest under Chapter 9, Title 75 28
(Uniform Commercial Code - secured transactions) in a mobile home 29
or a manufactured home is perfected against the rights of judicial 30
lien creditors and execution creditors on and after the date such 31
purchase money security interest attaches. 32
(b) The designated agent shall deliver to the 33
department * * * the existing certificate of title, if any, an 34
application for a certificate of title containing the name and 35
address of the lienholder and the date of his security agreement, 36
and the required fee, but the security interest will perfect at 37
the time the requirements of subsection (2)(a) of this section are 38
met. 39
(3) If a vehicle, manufactured home or mobile home is 40
subject to a security interest when brought into this state, the 41
validity of the security interest is determined by the law of the 42
jurisdiction where the vehicle, manufactured home or mobile home 43
was when the security interest attached, subject to the following: 44
(a) If the parties understood at the time the security 45
interest attached that the vehicle, manufactured home or mobile 46
home would be kept in this state and it was brought into this 47
state within thirty (30) days thereafter for purposes other than 48
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transportation through this state, the validity of the security 49
interest in this state is determined by the law of this state. 50
(b) If the security interest was perfected under the 51
law of the jurisdiction where the vehicle, manufactured home or 52
mobile home was when the security interest attached, the following 53
rules apply: 54
(i) If the name of the lienholder is shown on an 55
existing certificate of title issued by that jurisdiction, his 56
security interest continues perfected in this state. 57
(ii) If the name of the lienholder is not shown on 58
an existing certificate of title issued by that jurisdiction the 59
security interest continues perfected in this state for four (4) 60
months after a first certificate of title of the vehicle, 61
manufactured home or mobile home is issued in this state, and also 62
thereafter if, within the period of four (4) months, it is 63
perfected in this state. The security interest may also be 64
perfected in this state after the expiration of the period of four 65
(4) months, in which case perfection dates from the time of 66
perfection in this state. 67
(c) If the security interest was not perfected under 68
the law of the jurisdiction where the vehicle, manufactured home 69
or mobile home was when the security interest attached, it may be 70
perfected in this state, in which case perfection dates from the 71
time of perfection in this state. 72
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(d) A security interest may be perfected under 73
paragraph (b)(ii) or paragraph (c) of this subsection, either as 74
provided in subsection (2), or by the holder of the lien created 75
out of this state delivering to a county tax collector or a 76
designated agent a notice of security interest in the form the 77
department * * * prescribes, together with documents to support 78
the security interest as required by the department * * * and the 79
required fee. The county tax collector or a designated agent 80
shall process said notice in the manner prescribed by the 81
department * * *. 82
(4) Notwithstanding any other provision of this section, a 83
security interest in a motor vehicle may not be perfected while 84
the vehicle is subject to a valid statutory possessory lien, 85
including a lien arising under Section 85-7-107 or 85-7-251. A 86
secured party seeking to perfect a security interest in a motor 87
vehicle must certify to the department that no such possessory 88
lien exists or obtain written consent from the holder of such a 89
lien. Any security interest filed in violation of this subsection 90
shall be unperfected against the holder of the possessory lien and 91
subordinate in priority to that lien. 92
SECTION 2. Section 63-21-16, Mississippi Code of 1972, is 93
brought forward as follows: 94
63-21-16. (1) All designated agents appointed by the 95
department under Section 63-21-13 may electronically transmit to 96
the department information entered by them on applications for a 97
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certificate of title given in connection with the sale or transfer 98
of a motor vehicle, manufactured home or mobile home or a loan for 99
which the owner's motor vehicle, manufactured home or mobile home 100
is pledged to that institution as collateral for the loan. The 101
format and the data required to be transmitted shall be 102
established by the department. Transmission of data shall meet 103
minimum criteria and edits established by the department equal to 104
any edit presently existing in the statewide title registration 105
system, or as may be established, to which the county tax 106
collectors shall also conform. All data transmitted must 107
successfully pass edits established by the department, including 108
lienholder name, mailing address and lienholder account number 109
assigned to a lienholder by the department to identify the 110
lienholder, for the purpose of causing the data to appear in the 111
certificate of title for which the application is made. 112
(2) It shall be the responsibility of the designated agent 113
to verify all data before it is electronically transmitted. It 114
shall also be the responsibility of the designated agent to ensure 115
that the required certification of designated agent and the 116
certification of statement of facts that are contained on the 117
application for certificate of title appear above the signatures 118
of both the owner and the authorized representative of the 119
designated agent. Data which cannot be transmitted because of 120
error shall be corrected by the designated agent when the 121
statewide title registration system indicates that the data is 122
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erroneous or is not valid for the purposes of titling the motor 123
vehicle, manufactured home or mobile home or for transfer of the 124
data. 125
(3) When an institution has agreed to loan money for the 126
purchase of a motor vehicle, manufactured home or mobile home, the 127
institution shall complete an application for certificate of title 128
or require the borrower to provide to the institution the copy of 129
the application for certificate of title contained in the 130
application packet which is designated "Lienholder's Copy" 131
according to provisions of the Motor Vehicle and Manufactured 132
Housing Title Law, which the owner will receive from the county 133
tax collector or any designated agent upon completion of the 134
application for title and registration process. 135
(4) An application for certificate of title originating from 136
a designated agent shall be entered on the statewide title 137
registration system by the originating lending institution when 138
the transaction is for the purpose of perfecting the institution's 139
interest in a vehicle, manufactured home or mobile home currently 140
owned or purchased by the applicant, in connection with 141
application for certificate of title or the purchase of a license 142
tag or both. 143
(5) When an institution in this state adds a second lien on 144
a certificate of title in possession of a first lienholder 145
institution in this state, the second lienholder institution 146
seeking to be shown on the certificate of title shall: 147
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(a) Prepare the application for certificate of title in 148
accordance with the requirements of Sections 63-21-15 and 149
63-21-45(1)(c); 150
(b) Obtain all required signatures; and 151
(c) Forward the completed application for certificate 152
of title to the first lienholder together with any necessary 153
remittance advice, a check for the title fee payable to the 154
department and a cover letter to the first lienholder requesting 155
that the first lienholder attach the certificate of title to the 156
required documents sent by the second lienholder and then forward 157
the application, certificate of title and required documents to 158
the department. 159
(6) Upon receipt of the application for certificate of title 160
from the second lienholder institution to record the second lien, 161
the first lienholder institution shall compare the data contained 162
in the application for certificate of title to the information 163
contained in the original certificate of title. If the first 164
lienholder institution is satisfied as to the ownership, accuracy 165
and order of priority of liens as shown in the application, it 166
shall enter the data contained on the application for certificate 167
of title prepared by the second lienholder on the statewide title 168
registration system, including the designated agent number of the 169
second lienholder. After entering the data from the application 170
for certificate of title, the first lienholder institution shall 171
immediately forward the application for certificate of title with 172
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the certificate of title attached to the application, the 173
remittance advice and the second lienholder's check for the title 174
fee to the department within three (3) working days. 175
(7) In an assignment of lien pursuant to Section 63-21-47, 176
the assignee shall receive the notice of assignment along with the 177
current title attached and with the assignors interest open. The 178
assignee lienholder shall prepare an application for certificate 179
of title according to the notice of assignment, showing the 180
assignee institution as the lienholder, and then shall 181
electronically transmit the data to the department. The completed 182
application shall be forwarded to the department within three (3) 183
working days. 184
(8) The department, upon receipt of applications for 185
certificate of title, shall verify the data by accessing it on the 186
statewide title registration system by the title application 187
control number appearing on the application for title. After 188
receiving verification that is satisfactory to the department that 189
the data necessary for the issuance of a new certificate of title 190
exists, the department shall issue a new certificate of title that 191
records the interests of all the parties named in the application 192
for certificate of title. 193
(9) Designated agents shall be connected to the statewide 194
title registration system for the purpose of electronic transfer 195
of applications for certificate of title data in the order of 196
priority established by the department. 197
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(10) If a participating designated agent fails to comply 198
with the provisions of this section or the rules adopted by the 199
department to implement this section, the department may impose a 200
penalty of Twenty-five Dollars ($25.00) for each instance of 201
noncompliance. Any penalty imposed under this section not paid 202
within thirty (30) days after a notice is given shall be subject 203
to collection from the bond of the designated agent that is 204
required to be provided under the provisions of Section 205
63-21-13(3). The penalty provided shall also be assessable, due 206
and collectible from any licensed motor vehicle dealer or 207
manufactured home or mobile home dealer for failure to accept an 208
application for certificate of title for each and every vehicle, 209
manufactured home or mobile home he sells to a consumer. These 210
penalties shall be cumulative, supplemental and in addition to the 211
penalties provided by any other law. 212
(11) This section shall apply to all designated agents 213
appointed by the department under Section 63-21-13, that choose to 214
electronically transmit information on applications for 215
certificates of title to the department. This section shall not 216
apply to other designated agents. 217
(12) Notwithstanding the foregoing, the department shall not 218
issue a certificate of title to a manufactured home or mobile home 219
with respect to which title has been retired to real property 220
under Section 63-21-30 unless with respect to the same 221
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manufactured home or mobile home title has been severed from real 222
property pursuant to Section 63-21-30. 223
(13) Notwithstanding any requirement in this chapter that a 224
lien on a motor vehicle or manufactured home shall be noted on the 225
face of the certificate of title, if there are one or more liens 226
or encumbrances on the motor vehicle or manufactured home, the 227
department may electronically transmit the lien to the first 228
lienholder and notify the first lienholder of any additional 229
liens. Subsequent lien satisfactions may be electronically 230
transmitted to the department and shall include the name and 231
address of the person satisfying the lien. When electronic 232
transmission of liens and lien satisfactions is used, a 233
certificate of title need not be issued until the last lien is 234
satisfied and a clear certificate of title is issued to the owner 235
of the motor vehicle or manufactured home. When a motor vehicle 236
is subject to an electronic lien, the certificate of title for the 237
motor vehicle shall be considered to be physically held by the 238
lienholder for purposes of compliance with state or federal 239
odometer disclosure requirements. A duly certified copy of the 240
department's electronic record of the lien shall be admissible in 241
any civil, criminal, or administrative proceeding in this state as 242
evidence of the existence of the lien. 243
(14) Any lienholder with a federal Employer Identification 244
Number (EIN) must electronically transmit the satisfaction and 245
release and discharge of a lien on a motor vehicle to the 246
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department not later than fourteen (14) days after the date of 247
satisfaction of the lien. The failure of any such lienholder to 248
comply with the requirements of this subsection shall be a 249
violation of this chapter. Any such lienholder who knowingly and 250
willfully fails to transmit the satisfaction and release and 251
discharge of a lien on a motor vehicle within fourteen (14) days 252
after the date of the satisfaction of the lien shall be in 253
violation of this section, and subject to a civil penalty of up to 254
Two Hundred Fifty Dollars ($250.00) per violation, which shall be 255
in addition to any other penalty provided in this chapter. In 256
addition, the lienholder shall be liable for any attorney's fees, 257
legal fees and/or other fees and costs incurred by a person in any 258
action necessary to discharge and/or release a lien or otherwise 259
affecting a lien for which the lienholder failed to transmit the 260
required information. 261
(15) Notwithstanding any other provision of this chapter to 262
the contrary, if a lien on a motor vehicle is older than eight (8) 263
years from the date the lien was placed on the motor vehicle, the 264
lien shall be recorded by the department in the automated 265
statewide motor vehicle registration system as having been 266
satisfied and released and discharged, unless annually recertified 267
by the lienholder by utilizing the format and transmitting the 268
data required by the department. 269
SECTION 3. Section 75-9-333, Mississippi Code of 1972, is 270
brought forward as follows: 271
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75-9-333. (a) In this section, "possessory lien" means an 272
interest, other than a security interest or an agricultural lien: 273
(1) Which secures payment or performance of an 274
obligation for services or materials furnished with respect to 275
goods by a person in the ordinary course of the person's business; 276
(2) Which is created by statute or rule of law in favor 277
of the person; and 278
(3) Whose effectiveness depends on the person's 279
possession of the goods. 280
(b) A possessory lien on goods has priority over a security 281
interest in the goods unless the lien is created by a statute that 282
expressly provides otherwise. 283
SECTION 4. Section 85-7-107, Mississippi Code of 1972, is 284
brought forward as follows: 285
85-7-107. All motor vehicles repaired for any person, and at 286
his instance, shall be liable for the price of the labor and 287
material employed in constructing, manufacturing or repairing the 288
same; and the mechanic to whom the price of said labor and 289
material may be due shall have the right to retain possession of 290
such motor vehicles so repaired until the price be paid. If such 291
price shall not be paid within thirty (30) days, and the person to 292
whom such charges are payable and owing intends to commence suit 293
as provided in this section, such person shall notify, by 294
certified mail, the legal owner and the holder of any lien of the 295
amount of charges due thereon and provide an opportunity for 296
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redemption. If such property has not been redeemed within five 297
(5) days after the mailing of such certified letter, the person to 298
whom such charges are payable and owing may commence suit in any 299
court of competent jurisdiction, and upon proof of the value of 300
the labor and materials employed in such repairs, manufacture or 301
construction, and that such labor and materials furnished were 302
reasonably necessary to prevent deterioration, permit operation 303
and preserve the property, shall be entitled to judgment against 304
the party for whom such labor was done or materials furnished, 305
with costs, as in other cases, and to a special order for the sale 306
of the property retained in his possession for the payment 307
thereof, with costs, and to an execution, as in other cases, for 308
the residue of what remains unpaid after sale of the property. 309
The proceeds of the sale of such property in excess of the amount 310
needed to pay the judgment and necessary expenses of the procedure 311
required by this section shall be held by the person for a period 312
of six (6) months, and if not reclaimed by the owner thereof 313
within that time shall become the property of the county and be 314
paid over to the chancery clerk of the county in which the sale 315
was held to be deposited into the county general fund, subject 316
however to any rights of recorded lienholders. 317
SECTION 5. Section 85-7-251, Mississippi Code of 1972, is 318
brought forward as follows: 319
85-7-251. (1) The owner of a motor vehicle that has been 320
towed at his request or at the direction of a law enforcement 321
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officer, or towed upon request of a real property owner upon whose 322
property a vehicle has been left without permission of the real 323
property owner, shall be liable for the reasonable price of towing 324
and storage of such vehicle; and the towing company to whom the 325
price of such labor and storage costs may be due shall have the 326
right to retain possession of such motor vehicle until the price 327
is paid. 328
(2) Within twenty-four (24) hours, the towing company shall 329
report to the local law enforcement agency having jurisdiction any 330
vehicle that has been towed unless the vehicle was towed at the 331
request of the owner of the vehicle. If the owner of a towed 332
vehicle has not contacted the towing company within five (5) 333
business days of the initial tow, the towing company shall obtain 334
from the appropriate authority the names and addresses of any 335
owner and lienholder. If the information from the appropriate 336
authority fails to disclose the owner or lienholder, a good faith 337
effort shall be made by the towing company to locate ownership, 338
including a check for tag information, inspection sticker, or any 339
papers in the vehicle that may indicate ownership. Upon location 340
of the owner and lienholder, the towing company shall notify them 341
by registered mail of the amount due for towing, postmarked no 342
later than the tenth day following the initial tow. If such 343
amount shall not be paid within thirty (30) days from the initial 344
tow, the towing company to whom such charges are payable shall 345
notify by certified mail any legal owner and holder of any lien, 346
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ST: Motor vehicles; prevent perfection of
security interest in when subject to statutory
possessory lien.
as disclosed by the motor vehicle title records or other 347
investigation, of notice of sale of the property. If such 348
property has not been redeemed within ten (10) days after the 349
mailing of the certified letter, the towing company may commence 350
sale of the property at public auction. The towing company shall 351
publish for two (2) consecutive weeks a notice of sale in the 352
newspaper having circulation in the county where the vehicle was 353
initially towed. The proceeds of the sale of such property in 354
excess of the amount needed to pay the towing, reasonable storage 355
and necessary expenses of the procedures required by this section 356
shall be held by the towing company for a period of six (6) 357
months, and, if not reclaimed by the owner thereof within such 358
time, shall become the property of the county and be paid to the 359
chancery clerk of the county in which the sale was held to be 360
deposited into the county general fund, subject, however, to any 361
rights of the recorded lienholder. 362
(3) The failure to make a good faith effort to comply with 363
the requirements of this section shall preclude the imposition of 364
any storage charges or towing charges against the towed vehicle. 365
(4) Every towing company shall maintain accurate records for 366
a period of three (3) years, which records shall identify the 367
vehicles it has towed and stored and all procedures that it has 368
taken to comply with the provisions of this chapter. 369
SECTION 6. This act shall take effect and be in force from 370
and after July 1, 2026. 371