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Committee Substitute House Bill 2986 History

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HB2986 SUB
COMMITTEE SUBSTITUTE

FOR

H. B. 2986

(By Delegates Boggs, Kominar, G. White, Craig, Michael and Cann)


(Originating in the House Committee on Finance)


[March 25, 2005]


A BILL to amend and reenact §17A-6-6 and §17A-6-18 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new article, designated §17A-6E-1, §17A-6E-2, §17A-6E-3, §17A-6E-4, §17A-6E-5, §17A-6E-6, §17A-6E-7, §17A-6E-8, §17A-6E-9, §17A-6E-10, §17A-6E-11, §17A-6E-12 and §17A-6E-13, all relating generally to the regulation of selling new or used vehicles; providing for the comprehensive regulation and licensing of persons who sell new or used vehicles by requiring these persons to obtain licenses as salespersons; authorizing fees; authorizing the Commissioner to propose legislative rules; prohibiting the employment by dealers of unlicensed salespersons; authorizing the Commissioner to conduct investigations and petition for injunctions under certain circumstances.

Be it enacted by the Legislature of West Virginia:

That §17A-6-6 and §17A-6-18 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto a new article, designated §17A-6E-1, §17A-6E-2, §17A-6E-3, §17A-6E-4, §17A-6E-5, §17A-6E-6, §17A-6E-7, §17A-6E-8, §17A-6E-9, §17A-6E-10, §17A-6E-11, §17A-6E-12 and §17A- 6E-13, all to read as follows:
ARTICLE 6. LICENSING OF DEALERS AND WRECKERS OR DISMANTLERS;
SPECIAL PLATES; TEMPORARY PLATES OR MARKERS, ETC.

§17A-6-6. Refusal or issuance of license certificate; license certificate not transferable.
(a) Upon the basis review of the application and all other information before him or her, the Commissioner shall may make and enter an order denying the an application for a license certificate and refusing refuse the license certificate sought. which A denial and refusal are final and conclusive unless an appeal is taken made in accordance with the provisions of section twenty-one of this article rules proposed for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code. The Commissioner shall make and enter an order denying or refusing a license, if the Commissioner finds that the applicant (individually, if an individual, or the partners, if a copartnership, or the officers and directors, if a corporation):
(1) Has failed to furnish the required bond unless otherwise exempt under the provisions of section two-a of this article;
(2) Has failed to furnish the required certificate of insurance;
(3) Has knowingly made false statement of a material fact in his or her application;
(4) Has habitually defaulted on financial obligations in this state or any other state or jurisdiction;
(5) Has been convicted of a felony: Provided, That upon appeal, the Motor Vehicle Dealers Advisory Board established pursuant to the provisions of section eighteen-a of this article may grant as an exemption of this restriction if the felony did not involve financial matters, the motor vehicle industry or matters of moral turpitude;
(6) So far as can be ascertained, has not complied with and will not comply with the registration and title laws of this state or any other state or jurisdiction;
(7) Does not or will not have or maintain at each place of business, subject to the qualification contained in subdivision (17), subsection (a), section one of this article with respect to a new motor vehicle dealer (an established place of business as defined for the business in question) in that section;
(8) Has been convicted of any fraudulent act in connection with the business of new motor vehicle dealer, used motor vehicle dealer, house trailer dealer, trailer dealer, recreational vehicle dealer, motorcycle dealer, used parts dealer, or wrecker or dismantler in this state or any other state or jurisdiction;
(9) Has done any act or has failed or refused to perform any duty for which the license certificate sought could be suspended or revoked were it then issued and outstanding;
(10) Is not age eighteen years or older;
(11) Is delinquent in the payment of any taxes owed to the United States, the State of West Virginia or any political subdivision thereof of the state;
(12) Has been denied a license in another state or has been the subject of license revocation or suspension in another state;
(13) Has committed any action in another state which, if it had been committed in this state, would be grounds for denial and refusal of the application for a license certificate;
(14) Has failed to pay any civil penalty assessed by this state or any other state; or
(15) Has failed to reimburse when ordered, any claim against the dealer recovery fund as prescribed in section two-a of this article; or
(16) Has failed to comply with the provisions of article six-e of this chapter, pertaining to the employment of licensed salespersons.
Otherwise, the Commissioner shall issue to the applicant the appropriate license certificate which entitles the licensee to engage in the business of new motor vehicle dealer, used motor vehicle dealer, house trailer dealer, trailer dealer, recreational vehicle dealer, motorcycle dealer, used parts dealer, or wrecker or dismantler, as the case may be. during the period, unless sooner suspended or revoked, for which the license certificate is issued
(b) A license certificate issued in accordance with the provisions of this article is not transferable.
PART V. SUSPENSION OR REVOCATION OF LICENSE

CERTIFICATES; SURRENDER OF PLATES, ETC.

§17A-6-18. Investigation; matters confidential; grounds for suspending or revoking license or imposing fine; suspension and revocation generally.
(a) The Commissioner may conduct an investigation to determine whether any provisions of this chapter have been or are about to be violated by a licensee. Any investigation shall be kept in strictest confidence confidential by the Commissioner and the Division, the licensee, any complainant and all other persons, unless and until the Commissioner suspends or revokes the license certificate of the licensee involved or fines the licensee: Provided, That the Commissioner may advise the Motor Vehicle Dealers Advisory Board of pending actions and may disclose to the Motor Vehicle Dealers Advisory Board any information that enables it to perform its advisory function in imposing penalties. The Commissioner may suspend or revoke a license certificate, suspend a special dealer plate or plates, impose a fine or take any combination of these actions if the Commissioner finds that the licensee:
(1) Has failed or refused to comply with the laws of this state relating to the registration and titling of vehicles and the giving of notices of transfers, the provisions and requirements of this article, or any reasonable rules authorized in section nine, article two of this chapter and promulgated to implement the provisions of this article by the Commissioner in accordance with the provisions of article three, chapter twenty-nine-a of this code;
(2) Has given any check in the payment of any fee required under the provisions of this chapter which is dishonored;
(3) In the case of a dealer, has knowingly made or permitted any unlawful use of any dealer special plate or plates issued to him or her;
(4) In the case of a dealer, has a dealer special plate or plates to which he or she is not lawfully entitled;
(5) Has knowingly made false statement of a material fact in his or her application for the license certificate then issued and outstanding;
(6) Has habitually defaulted on financial obligations;
(7) Does not have and maintain at each place of business (subject to the qualification contained in subdivision (17), subsection (a), section one of this article with respect to a new motor vehicle dealer) an established place of business as defined for the business in question in section one of this article;
(8) Has been guilty of any fraudulent act in connection with the business of new motor vehicle dealer, used motor vehicle dealer, house trailer dealer, trailer dealer, motorcycle dealer, used parts dealer or wrecker or dismantler;
(9) Has defrauded or is attempting to defraud any buyer or any other person, to the damage of the buyer or other person, in the conduct of the licensee's business;
(10) Has defrauded or is attempting to defraud the state or any political subdivision of the state of any taxes or fees in connection with the sale or transfer of any vehicle;
(11) Has committed fraud in the registration of a vehicle;
(12) Has knowingly purchased, sold or otherwise dealt in a stolen vehicle or vehicles;
(13) Has advertised by any means, with intent to defraud, any material representation or statement of fact which is untrue, misleading or deceptive in any particular relating to the conduct of the licensed business;
(14) Has willfully failed or refused to perform any legally binding written agreement with any buyer;
(15) Has made a fraudulent sale or purchase;
(16) Has failed or refused to assign, reassign or transfer a proper certificate of title;
(17) Has a license certificate to which he or she is not lawfully entitled;
(18) Has misrepresented a customer's credit or financial status to obtain financing; or
(19) Has failed to reimburse, when ordered, any claim against the dealer recovery fund as prescribed in section two-a of this article or
(20) Has employed unlicensed salespersons in violation of article six-e of this chapter on or after the first day of January, two thousand seven.
The Commissioner shall also suspend or revoke the license certificate of a licensee if he or she finds the existence of any ground upon which the license certificate could have been refused or any ground which would be cause for refusing a license certificate to the licensee were he or she then applying for the license certificate.
(b) Whenever a licensee fails to keep the bond, unless exempt from the requirement pursuant to section two-a of this article or liability insurance required by section four of this article, in full force and effect, or fails to provide evidence of the bond or liability insurance, the Commissioner shall automatically suspend the license certificate of the licensee unless and until a bond or certificate of insurance as required by section four of this article is furnished to the Commissioner. When the licensee furnishes the bond or certificate of insurance to the Commissioner and pays all reinstatement fees, the Commissioner shall vacate the suspension.
(c) Suspensions under this section shall continue until the cause for the suspension has been eliminated or corrected. Revocation of a license certificate shall does not preclude application for a new license certificate. The Commissioner shall process the application for a new license certificate in the same manner and issue or refuse to issue the license certificate on the same grounds as any other application for a license certificate is processed, considered and passed upon, except that the Commissioner may give any previous suspension and the revocation such weight in deciding whether to issue or refuse the license certificate as is correct and proper under all of the circumstances.
ARTICLE 6E. MOTOR VEHICLE SALESPERSON LICENSE.
§17A-6E-1. Findings and purpose.
It is the purpose of this article to protect retail motor vehicle customers, motor vehicle dealers, banks and the state from sustaining losses due to the fraudulent activity of persons engaged in the business of selling vehicles. Some persons engaged in this business lack the knowledge or aptitude to properly prepare documents related to vehicle purchases, make false and deceptive claims concerning motor vehicles to customers and have engaged in fraud and other illegal conduct which has resulted in customers, motor vehicle dealers, banks and the state sustaining financial losses. This article establishes minimum competency and ethical standards for persons engaged in the business of selling motor vehicles to the general public.
§17A-6E-2. Definitions.
The following words as used in this article, unless the context otherwise requires, have the following meanings:
(1) "Applicant" means any person making application for an original or renewal of a salesperson license;
(2) "Dealer" means any motor vehicle or auction business regulated under the provisions of articles six or six-c of this chapter;
(3) "Licensee" means any person holding a license issued under the provisions of this article;
(4) "Motor vehicle salesperson" or "salesperson" means any person employed by a dealer to sell, buy, display and offer for sale or deal in motor vehicles, recreational vehicles or trailers for a commission or other valuable consideration, but does not mean any public officer performing his or her official duties or the dealer licensee. A person employed by a dealer as a finance and insurance representative is for the purposes of this article a salesperson.
§17A-6E-3. License required.
(a) Except as provided in section six of this article, no person may engage in business in this state as a motor vehicle salesperson on and after the first day of January, two thousand seven, without first obtaining a license as provided in this article.
(b) No class of vehicle dealer as defined in article six or six-c of this chapter may employ an unlicenced motor vehicle salesperson on or after the first day of January, two thousand seven. No person may sell vehicles for more than one vehicle dealer unless the Commissioner grants a written waiver.
(c) Any person employed by a licensed dealer as a salesperson for at least a period of five years immediately preceding the effective date of this section is exempt from the requirements of the background investigation and the written test and payment of the fee for the background investigation provided in section four of this article.
§17A-6E-4. Eligibility and issuance of license.
(a) The Division may not issue any person a motor vehicle salesperson license unless the person:
(1) Is endorsed for employment by a West Virginia dealer; (2) Completes the application for a license on the form prescribed by the Division, fully completed, signed and attested to by the applicant, including, but not limited to, the applicant's:
(A) Full name;
(B) Social security number;
(C) Residence and mailing address;
(D) Name of employing dealership;
(E) Statement as to whether the applicant has ever had any previous application for a dealer or salesperson license refused in this or any other state or jurisdiction;
(F) Statement as to whether the applicant has been previously licensed as a salesperson in this state or any other state or jurisdiction;
(G) Statement as to whether the applicant has ever had his or her salesperson license or a dealer license suspended or revoked in this state or any other state or jurisdiction;
(H) Statement as to whether the applicant has ever held a dealer license which has been suspended or revoked or has been employed by a dealer which has had its license suspended or revoked;
(I) Statement as to whether the applicant has ever been convicted of a felony or whether the applicant individually or as an owner, partner, officer or director of a business entity has been convicted of, or pleaded guilty or nolo contendere to a criminal action, and if so, a written explanation of the conviction;
(J) Statement as to whether or not the applicant owes a child support obligation, owes a child support obligation that is more than six months in arrears, is the subject of a child support related warrant, subpoena or court order; and
(K) Statement that the applicant has not been found to have done any of the acts which would justify suspension or revocation of a salesperson's license under section nine of this article;
(3) Submits an employing salesperson notification form completed and endorsed by the employing dealer;
(4) Furnishes a full set of fingerprints to facilitate a background check and other investigation considered necessary by the Commissioner;
(5) Pays an initial nonrefundable application fee of five dollars for each year the license is valid. Payment of the fee entitles the applicant to one attempt at a written test prescribed by the Division. Successful completion of at least seventy percent of the written test is a passing score;
(6) Pays a nonrefundable background investigation fee of twenty-five dollars; and
(7) Successfully passes a background investigation conducted by the Division.
(b) The Division may, upon successful completion of all the requirements contained in subsection (a) of this section, with the exception of the background investigation, issue the applicant a temporary motor vehicle salesperson license. The temporary license is valid for a maximum of ninety days pending issuance of the permanent license endorsement or receipt of an unfavorable background investigation, whichever occurs first.
(c) The Division shall refuse to issue the license if the applicant:
(1) Does not provide the necessary documents as determined by the Division to establish his or her identity or legal presence in this country;
(2) Has made any false statements of material fact in the application;
(3) Has had his or her privilege to sell vehicles denied, suspended or revoked by this state or any other state or jurisdiction: Provided, That upon the applicant's appeal, the Commissioner may grant an exemption of this restriction if the applicant can show that he or she is eligible for reinstatement in his or her previous jurisdiction of licensure;
(4) Has committed a fraudulent act or omission or repeatedly defaulted in financial obligations in connection with the buying, selling, leasing, rental or otherwise dealing in motor vehicles, recreational vehicles or trailers;
(5) Has been convicted of a felony: Provided, That upon the applicant's appeal the Commissioner may grant an exemption to this restriction if the felony did not involve financial matters or the motor vehicle industry;
(6) Has not been designated to act as a salesperson for a motor vehicle dealer licensed in accordance with article six or six-c of this chapter;
(7) Has acted as a salesperson for more than one motor vehicle dealer at the same time unless granted a waiver by the Commissioner; or
(8) Has an unfavorable background investigation.
(d) Any dealer who employs a salesperson shall notify the Division within ten days of the employment.
(e) Willful misrepresentation of any fact in any application or any document in support of the application is a violation of this chapter.
§17A-6E-5. Expiration of license, renewal and expired license.
(a) An initial license issued under the provisions of this article shall be valid for no less than three years nor more than seven years as determined by the Division to establish set license expiration date on the applicant's birthday in a year in which the applicant's age is evenly divisible by five.
(b) A salesperson may renew a salesperson license in the manner prescribed by the Division upon completion of the application for renewal, endorsement by the employing dealer and payment of a renewal fee of ten dollars. The license shall be valid for a period of five years.
(1) Any licensee who fails to renew his or her salesperson license before the date of expiration shall pay an additional fee of five dollars.
(2) Any licensee who fails to renew his or her salesperson license within six months of expiration is not eligible for renewal and is required to complete the application process required of all new applicants, including the payment of all initial fees, completion of the written test and background investigation as if he or she never held a license.
§17A-6E-6. Change of employer.
(a) The dealer shall notify the Division in the manner prescribed by the Division within ten days upon the termination or cessation of employment of a salesperson for any reason. Upon termination or cessation of employment, the license of the salesperson becomes inactive. The person shall cease the selling of vehicles until the person becomes relicensed as a salesperson for the same dealer or another dealer.
(b) The dealer shall notify the Division in the manner prescribed by the Division within ten days upon hiring any person who possesses a valid salesperson license. The dealer shall complete an application for transfer of a salesperson license.
(c) The salesperson shall submit the completed transfer application, a fee of five dollars and obtain a new salesperson license in the name of the new employer within thirty days of employment. No transfer application or fee is required if the salesperson is reemployed by the previous employer, within six months of cessation of employment. However, the dealer shall notify the Division of the reemployment.
§17A-6E-7. Change of address, lost or stolen license, duplicate license.

A salesperson shall notify the Division in the manner prescribed by the Division of the loss of any license and obtain a new license within twenty days of loss. The Division shall charge a fee of five dollars for issuing any duplicate license.
§17A-6E-8. Display of license.
(a) Every salesperson licensee must have his or her salesperson license in his or her possession at all times when engaged in the business of selling vehicles, and shall display the license upon demand of any customer, law-enforcement official or Division employee.
(b) Every dealer shall conspicuously display a list of all employees currently licensed as salespersons.
§17A-6E-9. Revocation, suspension or refusal to renew license.
(a) The Commissioner may revoke or suspend the license of any salesperson if he or she determines that the licensee has:
(1) Violated any motor vehicle dealer law, any dealer rule or order of the Division;
(2) Improperly withheld, misappropriated or converted to his or her own use any money received from customers;
(3) Misrepresented the terms of any existing or proposed vehicle sale, purchase, lease, rental, finance, warranty or insurance agreement;
(4) Engaged in any pattern of unfair competition or unfair or deceptive acts or practices in the business of buying, selling, renting or leasing vehicles;
(5) Forged another person's name to any application or form required for the titling, leasing, rental, registration, financing or insuring of a vehicle;
(6) Knowingly and willfully made or permitted a false or fraudulent application or form required for the titling, leasing, rental, registration, financing or insuring of a vehicle;
(7) Been convicted of or pleaded nolo contendere to any felony: Provided, That upon the applicant's appeal the Commissioner may grant an exemption to this subdivision if the felony did not involve financial matters or the motor vehicle industry;
(8) Been convicted of or pleaded nolo contendere to a misdemeanor in connection with his or her activities in the business of selling, renting or leasing vehicles;
(9) Been refused a dealer or salesperson license or had a dealer or salesperson license suspended, revoked, restricted or otherwise canceled in another state or jurisdiction: Provided, That upon the applicant's appeal, the Commissioner may grant an exemption of this restriction if the applicant can show that he or she is eligible for reinstatement in his or her previous jurisdiction of licensure; or
(10) Obtained the license through misrepresentation, fraud or any other act for which the issuance of the license could have been refused had it been known to the Commissioner at the time of issuance.
(b) For the purposes of this section:
(1) "Suspension" means the privilege to sell vehicles is temporarily withdrawn for a fixed period and is reinstatable without retesting; and
(2) "Revocation" means the privilege to sell vehicles is withdrawn permanently. However, the person retains the right to reapply for an original license with an explanation as to why the Commissioner should consider the applicant for relicensing.
§17A-6E-10. Administrative due process.
(a) Any person may appeal an order of the Commissioner suspending, revoking, denying or otherwise canceling his or her salesperson license in accordance with the prescribed procedures of the Division.
(b) The appeal serves to stay the suspension or revocation of a salesperson license but does not serve to require the Commissioner to issue or renew a salesperson license.
(c) Any final order entered pursuant to this article is subject to judicial review as provided in article five, chapter twenty-nine-a of this code.
§17A-6E-11. Investigation, matters confidential.
The Commissioner may conduct any investigation necessary to determine whether any provision of this chapter has been violated or is about to be violated by a licensee or applicant. Any investigation shall be kept confidential by the Commissioner and the Division unless and until the Commissioner suspends, revokes or otherwise denies a license. However, the Commissioner may advise the Motor Vehicle Dealers Advisory Board of information that may enable it to perform its advisory functions.
§17A-6E-12. Injunctive relief.
(a) Whenever it appears to the Commissioner that any person or licensee has violated any provision of this article or any final order of the Commissioner, the Commissioner may petition, in the name of the state, in the circuit court of Kanawha County or in the circuit court of the county in which the violation occurred, for an injunction against the person or licensee. A violation or violations resulting in the prosecution or conviction under the provisions of article eleven of this chapter do not prohibit injunctive relief.
(b) The circuit court may, by mandatory or prohibitory injunction, compel compliance with the provisions of this article and all final orders of the Commissioner. The court may also issue temporary injunctions.
(c) The judgment by the circuit court is final unless reversed, vacated or modified on appeal to the Supreme Court of Appeals of West Virginia. An appeal shall be sought in the manner and within the time provided by law for appeals from circuit courts in other civil cases.
§17A-6E-13. Authority for rules.
The Commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code, in order to effectuate the provisions of this article.
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