West Virginia
Legislature
2017 Regular Session
Introduced
House Bill 2008
(By Delegates Gearheart and
Hamrick)
to the Committee on Roads and Transportation then Finance]
A BILL to amend and
reenact §17A-6-2a of the Code of West Virginia, 1931, as amended, relating
generally to the Dealer Recovery Fund; specifying that the Dealer Recovery Fund
Control Board has discretionary jurisdiction to hear claims; and providing the
types of claims for damages that may be awarded from the Dealer Recovery Fund.
Be it enacted by the
Legislature of West Virginia:
That §17A-6-2a of the
Code of West Virginia, 1931, as amended, be amended and reenacted to read as
follows:
ARTICLE 6. LICENSING OF DEALERS AND WRECKERS OR
DISMANTLERS; SPECIAL PLATES; TEMPORARY PLATES OR MARKERS.
§17A-6-2a. Dealer recovery fund created.
(a) There is hereby created
a special fund in the State Treasury which is to be designated the "Dealer
Recovery Fund." The fund shall
consist consists of certain moneys received from persons engaged in the
business of selling new or used motor vehicles, new or used motorcycles,
trailers, multitrailers or recreational vehicles or from grants, gifts,
bequests or awards arising out of the settlement or adjudication of a
claim. The fund is not to be treated by
the Auditor and Treasurer as part of the general revenue of the state. The fund is to be a special revolving fund
paid out upon order of the Commissioner of Motor Vehicles based on the
recommendation of the Dealer Recovery Fund control board created in this section,
solely for the purposes specified in this section. The commissioner may use up to one percent of
funds from the Dealer Recovery Fund for the administrative expenses of
operating the dealer recovery fund program.
(b) The Dealer Recovery
Fund control board shall consist consists of the Commissioner of
Motor Vehicles or his or her designee, the Attorney General's designee representing the Office of Consumer
Protection and one representative selected by the Motor Vehicle Dealer's
Advisory Board. The Commissioner of
Motor Vehicles or his or her designee shall serve serves as chair
and the board shall meet at least once a year during the month of July, and as
required by the commissioner. The
board may hear claims consistent with the purposes specified in this section.
The board may recommend rejection or acceptance, in full or in part. The
recommendation of the board requires a majority vote. The commissioner may propose rules for
promulgation in accordance with article three, chapter twenty-nine-a of this
code that are necessary to effectuate the provisions of this section. The commissioner may employ the necessary
staff needed to operate the program. The
board may prorate the amount paid on claims when the amount of valid claims
submitted would exceed thirty-three percent of the fund. However, claims presented by the Division of
Motor Vehicles for taxes and fees shall be paid in full. The board may purchase insurance at a cost
not to exceed one percent of the fund to cover extraordinary or excess claims
from the fund.
(c) Every applicant for
either an original dealer license or renewal of an existing dealer license of
the type enumerated in subsection (a) of this section shall pay, in addition to
any other license fee, an annual Dealer Recovery Fund fee of $150. All dealers shall continue to maintain a
surety bond as required by this article and the Dealer Recovery Fund payment
unless exempt by one of the following requirements:
(1) Any dealer who, for the
three years immediately preceding assessment of the fees, has not had a claim
paid against their bond or against the Dealer Recovery Fund, whose license has
not been suspended or revoked and who has not been assessed any civil penalties
is not required to continue to keep the bond required by this article. However, no dealer can submit a claim against
the fund unless it has contributed to the fund for at least three years.
(2) If the Dealer Recovery
Fund reaches or exceeds the amount of $3,000,000 as of July 1, of any year, a
dealer who meets the requirements of subdivision (1) of this subsection, is
exempt from payment of the annual Dealer Recovery Fund fee. However, if the fund should, as of April 1 of
any year, drop below $3,000,000, all dealers, regardless of any previous
exemption shall pay the annual dealer recovery fee of $150. The exemption prescribed in subdivision (1)
of this subsection remains in effect regardless of the status of the fund.
(d) The Dealer Recovery
Fund control board may consider payment only after any dealer surety bond
required pursuant to the provisions of section four of this article has been
exhausted.
(e) When the fund reaches
$250,000, the board shall consider claims for payment.
(f) Claims against the fund
are not to be made for any act or omission which occurred prior to July 1,
2002.
(g) Claims for payment
shall be submitted within six months of the date of sale or the date the
division is made aware of the claim.
(h) The board shall pay
claims in the following order:
(1) Claims submitted by the
Division of Motor Vehicles for unpaid taxes and fees;
(2) Claims submitted by a
retail purchaser of a vehicle from a dealer covered by the fund with an
undisclosed lien or a retail purchaser of a vehicle from a dealer covered by
the fund who finds that the lien on the vehicle traded in has not been satisfied
by the selling dealer if the lien satisfaction was a condition of the purchase
agreement;
(3) Claims submitted by a
motor vehicle dealer contributing to the fund, which has purchased a vehicle or
vehicles from another dealer covered by the fund with an undisclosed lien;
(4) Claims submitted by a
retail purchaser of third party goods or services from a dealer covered by the
fund for the unpaid charges when the dealer fails to pay the third party for
the goods or services; or
(5) Claims submitted by the
Division of Motor Vehicles, a retail purchaser or a motor vehicle dealer
contributing to the fund, not authorized by subdivisions (1) through (4) of
this subsection, but otherwise payable under the bond described in section four
of this article, may be considered for payment by the board up to the amount of
$50,000 for each licensing year the West Virginia dealer that is the subject of
the complaint did not maintain the bond:
Provided, That the board may not consider claims submitted by or
on behalf of a financial institution for money owed by a dealer upon a loan to
a dealer or credit extended to a dealer that is secured by a lien upon the
inventory of the dealer, commonly referred to as a floor planner: Provided, however, That
payments under this section may not include punitive or exemplary damages,
compensation for property damage other than to the vehicle, recompense for any
personal injury or inconvenience, reimbursement for alternate transportation or
payment for attorney fees, legal expenses, court costs or accrued interest.
(i) The maximum claim
against the fund for any unpaid lien of a used vehicle is the unpaid balance of
the lien up to the loan value of the vehicle as of the date of the sale or
other transaction as shown by a generally accepted motor vehicle value
guide. The maximum claim against the
fund for any new or unused vehicle is the amount of the invoice less any
amounts rebated or to be rebated to the dealer from the manufacturer. Payment is only to be made to a secured party
who agrees to accept payment from the Dealer Recovery Fund and who accepts the
payment in full settlement of any claims, and who releases the lien and the
title, if applicable, prior to receiving payment. Any dealer who agrees to accept payment from
the Dealer Recovery Fund shall release the title prior to receiving payment.
(j) On payment by the board
to a claimant from the fund, the board shall immediately notify the licensee
against whom a claim was paid and request full reimbursement within thirty days
of notification. If a dealer fails to
fully reimburse the board within the specified period of time, the commissioner
shall immediately and without prior hearing revoke the dealer license of dealer
against whom the claim was paid. No
applicant with an unpaid claim is eligible for renewal or relicensure until the
full amount of the reimbursement plus interest as determined by the board is
paid to the fund. Nothing in This
section shall does not limit the authority of the commissioner to
suspend, revoke or levy civil penalties against a dealer, nor shall does
full repayment of the amount owed to the fund necessarily nullify or modify the
effect of any action by the commissioner.
(k) Nothing in This
section shall does not limit the right for of any
person to seek relief though civil action against any other person.
(l) The provisions of this
section do not apply to those class DTR dealers in the business of selling
manufactured housing and covered by the state manufactured housing recovery
fund established by the Division of Labor pursuant to a legislative rule.
NOTE: The purpose of this bill is to clarify the
authority and discretion of the Dealer Recovery Board to hear claims. The bill
further clarifies the types of payments which the Dealer Recovery Board may or
may not disburse in the execution of their duties.
Strike-throughs indicate language
that would be stricken from a heading or the present law, and underscoring
indicates new language that would be added.