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HB 5109

AN ACT RELATING TO THE UNIFORM COMMERCIAL CODE -- TRANSITIONAL PROVISIONS FOR UNIFORM COMMERCIAL CODE AMENDMENTS

2025 Regular Session Introduced by Grace Diaz and 4 co-sponsors

HB 5109 updates Michigan law to recognize electronic titles, exempting paper title endorsements/presentations, streamlining vehicle transfers for buyers, sellers, and SOS.

02/04/2025 Committee recommended measure be held for further study
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Bill Summary · HB 5109

HB 5109 — Vehicles: update references to electronic title transfers (MCL 257.233 et seq.)

Sponsor: Rep. Pat Outman
Introduced: March 13, 2025 (House introduced version dated Oct. 22, 2025)
Status: Reported favorably; referred to second reading (11/04/2025)
Related: SB 783; HB 1360; companion package: HBs 5110–5112

Purpose / Intent

HB 5109 updates the Michigan Vehicle Code to recognize and accommodate electronic certificates of title. It creates explicit statutory exemptions to avoid requiring paper title certificates or physical endorsements in transactions where the vehicle title has been issued or transferred electronically. The change is intended to modernize title-transfer procedures and reduce unnecessary paper-processing and in-person requirements.

Key provisions (by statutory section)

  • Amends sections 233, 234, 239, and 240 of the Michigan Vehicle Code (MCL 257.233, 257.234, 257.239, 257.240).
  • Adds an explicit exception "except for a title issued electronically under section 222" throughout these sections so that:
    • Sellers and buyers are not required to endorse a paper certificate of title in certain transfers when the title is electronic (sec. 233).
    • Purchasers/transferees are not required to present a physical certificate of title or registration certificate to the Secretary of State when the title is electronic (sec. 234).
    • The civil-infraction provision for failure to endorse/deliver a paper title does not apply to electronically issued titles (sec. 239).
    • The seller’s liability safe-harbor provisions that depend on delivery of a properly endorsed paper title are modified to account for electronic titles (sec. 240; text in bill continues these mechanics).
  • Retains existing rules about plate transfer, effective date of title transfer (date of signature on application/assignment), secured receipts in lieu of title when appropriate, and requirements when security interests exist.

Who is affected

  • Private buyers and sellers of motor vehicles and dealers (reducing need to exchange paper titles).
  • Secretary of State operations (administrative systems and processes for electronic title issuance and transfers).
  • Enforcement/penalty application where endorsement/delivery of paper certificates is currently required (those penalties would not apply when title is electronic).

Procedural / timeline notes

  • Reported favorably by committee and moved to Calendars; referred to second reading on 11/04/2025.
  • The bill is part of follow-up legislation to 2023 PA 240 (which authorized electronic vehicle titles) and complements related bills (HBs 5110–5112) that address temporary permits and electronic transfers for ORVs and watercraft.

Fiscal impact

  • House Fiscal Agency: no fiscal impact to the state or local units. The Department of State may incur marginal administrative costs to expand electronic-transfer capabilities; those costs can be covered with existing resources.

Bottom line

HB 5109 modernizes Michigan’s vehicle-title statutes by removing or altering paper-title requirements where an electronic title exists, streamlining transfers, and aligning statutory language with the electronic-title framework established in prior law.

Compiled from official sources — confirm details with the bill’s official record.

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