(a) A secured party indicated in the files of the Department of Motor Vehicles as having a security interest in a vessel shall deliver a termination statement to the department in such form as the department prescribes and, on the debtor's request, to the debtor, by the earlier of:

(1) Twenty days after the secured party receives a signed demand from an owner for a termination statement and there is no obligation secured by the vessel subject to the security interest and no commitment to make an advance, incur an obligation or otherwise give value secured by the vessel; or

(2) If the vessel is consumer goods, thirty days after there is no obligation secured by the vessel and no commitment to make an advance, incur an obligation or otherwise give value secured by the vessel.

(b) If the department has created a written certificate of title and delivered such certificate of title to a secured party and a termination statement is required under subsection (a) of this section, the secured party shall, not later than the date required by subsection (a) of this section, deliver the certificate of title to the debtor or to the department with the statement. If the certificate of title is lost, stolen, mutilated, destroyed or otherwise unavailable or illegible, the secured party shall, not later than the date required by subsection (a) of this section, deliver with the statement an application for a replacement certificate of title meeting the requirements of section 15-221.

(c) On delivery to the department of a termination statement authorized by the secured party, the security interest to which the statement relates ceases to be perfected. If the security interest to which the statement relates was indicated on the certificate of title, the department shall create a new certificate of title and deliver such new certificate of title or a record evidencing an electronic certificate of title. The department shall maintain in its files the date and time of delivery to the department of the statement.

(d) A secured party that fails to comply with this section shall be liable for any loss that the secured party had reason to know might result from its failure to comply and that could not reasonably have been prevented and for the cost of an application for a certificate of title under section 15-207 or 15-221.

(e) The Commissioner of Motor Vehicles may require a secured party indicated in the files of the department as having a security interest in a vessel to electronically transmit to the department a termination statement evidencing release of its security interest in a vessel.

(P.A. 14-63, S. 15.)

History: P.A. 14-63 effective January 1, 2016.