State of South Dakota
LEGISLATIVE ASSEMBLY, 2012
SENATE BILL NO. 64
Introduced by: Senators Fryslie, Cutler, Gray, and Nelson (Tom) and Representatives Street,
Novstrup (David), Solum, and Verchio
FOR AN ACT ENTITLED, An Act to revise provisions regulating the perfection of security
interest liens filed on-line.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 32-3-41 be amended to read as follows:
32-3-41. A security interest, mechanic's lien, or similar instrument other than a financing
statement covering a motor vehicle, trailer, or semitrailer, or any vehicle required to be titled
under the provisions of this chapter, if notation of same has been made by the seller, buyer,
owner, holder of the instrument, or an agent of the secretary on the manufacturer's statement of
origin or the manufacturer's certificate of origin, or in the case of the certificate of title, if a
notation of same has been made by the secretary, an agent of the secretary, or a county treasurer
on the face thereof or if notation of same has been made by the seller, buyer, owner, holder of
the instrument, or agent of the secretary on the reverse thereof,
shall be is valid against the
creditors of the debtor, whether armed with process or not, and subsequent purchasers and other
lien holders or claimants, but otherwise is not valid against them. A lien is perfected if it has
been noted on the title as provided by law and entered into the electronic title file system.
Section 2. That § 32-3-70 be amended to read as follows:
32-3-70. Notwithstanding any other provision of this title, the department may provide for
an electronic certificate of title. If the application for title or the title has a lien noted, no paper
title may be issued to the owner of record or the lienholder. A paper title shall be issued under
the following circumstances:
(1) The lien has been satisfied and the owner requests a title; or
(2) The owner is relocating to another state and the lienholder authorizes the issuance of
a title with the lien noted.
A lien shall be noted or cancelled on-line if an electronic certificate of title exists and the
lienholder has access to the electronic title file system pursuant to § 32-3-38.1. A lien noted on-line is considered perfected as if a paper title were issued and a lien noted on it pursuant to § 32-3-41.
A lienholder is liable for noting or canceling a lien in error.