H. B. 2486
(By Delegates Warner and Carper)
[Introduced March 5, 1993; referred to the
Committee on Roads and Transportation then the
Judiciary.]
A BILL to amend chapter seventeen-a of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
by adding thereto a new article, designated article six-c,
relating to the automobile auction business; definitions;
license certificate required; bonds and insurance;
requirements for established place of business; license
certificate fee; investigation and confidentiality; refusal
to issue license certificate; licensing period, renewal and
expiration; form and display of license certificate,
certified copies; changes in business and requirements;
investigation and suspension or revocation of license
procedures; temporary registration plates or markers;
special plates use and procedures; record requirements;
inspections, violations and criminal penalties; injunctive
relief and promulgation of rules.
Be it enacted by the Legislature of West Virginia:
That chapter seventeen-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article six-c to read as
follows:
ARTICLE 6C. AUTOMOBILE AUCTION BUSINESSES.
§17A-6C-1. Definitions.
In this article, unless another meaning plainly is required:
(1) "Automobile Auction" means an auction or other sale
where twenty or more used motor vehicles are offered for sale by
auction within a license year. The vehicles sold may be owned by
the automobile auction or by others.
(2) "Commissioner" means the commissioner of motor vehicles.
(3) "Salvage Certificate" means a certificate issued in lieu
of a title for a vehicle on which a total claim has been paid by
an insurer, pursuant to section ten, article four, chapter
seventeen-a.
§17A-6C-2. License certificate required.
(a) A person may not engage in, or represent or advertise
that he or she is in the business of conducting automobile
auctions, without first obtaining a license certificate from the
office of the commissioner. The commissioner shall provide an
application form for applicants seeking a license certificate.
The applicant shall provide full information required by the
commissioner on the application form. The applicant, if a
person, shall verify the information on the form by oath or
affirmation. If the applicant is a partnership or corporationthe oath or affirmation shall be made by a partner or an officer
of the corporation.
(b) Automobile auction businesses may auction or sell
vehicles only at their licensed location.
(c) If a motor vehicle's ownership is evidenced by a salvage
certificate such motor vehicle is deemed to be a salvage vehicle
and may not be sold at an automobile auction.
(d) An automobile auction may auction vehicles owned by
others or by the automobile auction itself.
§17A-6C-3. Bonds and insurance.
(a) An application for a license certificate must be
accompanied by a bond, issued by a surety corporation authorized
to issue bonds in this state, in the penal sum of twenty-five
thousand dollars, to ensure that the licensee will not make
fraudulent representations to the detriment of any purchaser,
seller, financial institution or the state of West Virginia. The
bond shall be effective on the date the license certificate is
issued. A licensee shall keep the bond in full force and effect
at all times. The aggregate liability of the surety in no event
shall exceed the principal sum of the bond. The surety of the
bond may cancel upon giving thirty days' notice to the
commissioner and be relieved of liability for any breach of
condition occurring after the effective date of the cancellation.
(b) An application for a license certificate must also be
accompanied by a certificate of insurance certifying that the
applicant has in force an insurance policy, issued by aninsurance company authorized to do business in this state,
insuring the applicant and any other person, as insured, using
any vehicle or vehicles owned by, or in the possession of, the
applicant with the expressed or implied permission of such
insured, against loss from the liability imposed by law for
damages arising out of the ownership, possession, operation,
maintenance or use of such vehicles, subject to minimum limits,
exclusive of interest and costs, with respect to each vehicle, as
follows: Twenty thousand dollars because of bodily injury to or
death of one person in any one accident and, subject to said
limit for one person, forty thousand dollars because of bodily
injury to or death of two or more persons in any one accident,
and ten thousand dollars because of injury to or destruction of
property of others in any one accident.
(c) The liability insurance policy shall run concurrently
with the license year and shall remain in full force and effect
at all times.
17A-6C-4. Established place of business requirements.
Each automobile auction shall:
(a) Be located at a permanent site which is owned or leased
by the licensee.
(b) Have no other class of dealership operating from
automobile auction location.
(c) Have office space of at least one thousand five hundred
square feet, with necessary office furniture, heating and
lighting facilities, restroom facilities and a telephone listedin the name of the automobile auction.
(d) Maintain parking space for at least five hundred
vehicles.
(e) Display at least one permanent sign that is clearly
visible from the nearest street or highway. Sign shall state
that automobile auctions are conducted at the site.
§17A-6C-5. Fee required for license certificate.
(a) The initial application fee for a certificate to engage
in the automobile auction business is five hundred dollars. The
renewal fee is two hundred fifty dollars.
(b) The fee entitles the licensee to one special plate known
as the Class AA special plate.
(c) A licensee is also entitled to additional Class AA
special plates for a fee of twenty-five dollars each based on the
following formula:
ANNUAL VEHICLE SALES ADDITIONAL AA PLATES
0 - 240 2
240 - 499 4 (Additional)
500 - 999 4 (Additional)
900 - More 4 Plates per 500
vehicles sold.
§17A-6C-6. Investigation prior to issuance of license
certificate; information confidential.
(a) Upon receipt of a completed application, the required
bond, a certificate of insurance and the application fee, thecommissioner may investigate to determine accuracy of the
application and any facts relevant to the application. The
commissioner may withhold issuance of a license for up to twenty
days after an application is received.
(b) An application for a license certificate under the
provisions of this article and any information submitted are
confidential. No one may divulge any information in an
application or information submitted except in response to a
valid subpoena or subpoena duces tecum.
§17A-6C-7. Refusal of license certificate.
The commissioner shall deny an application if he or she
finds that the applicant:
(a) Has failed to furnish the required bond;
(b) Has failed to furnish the required certificate of
insurance;
(c) Has knowingly made a false statement of a material fact
in the application;
(d) Has habitually defaulted on financial obligations;
(e) Has been convicted of a felony within five years
immediately preceding receipt of the application by the
commissioner;
(f) Has been refused, or has had revoked, an automobile
auction license in any other state or jurisdiction, within five
years immediately preceding receipt of the application by the
commissioner;
(g) So far as can be ascertained, has not complied with andwill not comply with the registration and title laws of this
state;
(h) Has been convicted of any fraudulent act in connection
with the business of an automobile auction; or
(i) Has committed any act or has failed, or refused to
perform any duty for which the license certificate, if issued,
could be suspended or revoked.
§17A-6C-8. Licensing period, renewal and expiration.
(a) No license certificate may be issued before the first
day of July, one thousand nine hundred ninety-two. Applicants
shall apply at least thirty days in advance. License
certificates expire on the thirtieth day of June of each year.
(b) License certificates are renewable by the payment of
fees if the licensee is in good standing with the commissioner.
A license certificate may not be transferred, except as provided
in section ten of this article.
§17A-6C-9. Form and display of license certificate; certified
copies of license.
(a) The commissioner shall prescribe the form of the license
certificate for an automobile auction business. Each license
certificate shall have the seal of the division, the location of
each place of business of the licensee, the year for which the
license is issued, the serial number and other information the
commissioner may prescribe printed on it. The license
certificate shall be delivered or mailed to the licensee.
(b) When a licensee conducts business at more than onelocation, he or she shall obtain from the commissioner one
certified copy of the license certificate for each place of
business for a fee of one dollar each. Each licensee shall keep
either his or her license certificate or a certified copy
conspicuously posted at each place of business.
(c) In the event of the loss or destruction of a license
certificate or a certified copy, the licensee shall immediately
make application for a certified copy of the lost license
certificate. The fee for a replacement copy is three dollars.
§17A-6C-10. Changes in business; action required.
Every automobile auction business shall notify the
commissioner immediately when any of the following changes in
business occur:
(a) A change of location of any place of business;
(b) A change of name or trade name under which the licensee
engages or will engage in the business;
(c) The death of the licensee or any partner, or partners
thereof;
(d) A change in any partners, officers or directors;
(e) A change in ownership of the business;
(f) A change in the type of legal entity by and through
which the licensee engages or will engage in the business; or
(g) The appointment of any trustee in bankruptcy, trustee
under an assignment for the benefit of creditors, master or
receiver.
When any change specified in subdivisions (a), (b), (c),(d), (e) or (f) of this section occurs, an application for a new
license certificate shall immediately be filed with the
commissioner:
Provided,
That when a subdivision (c) change is
involved, an application for a new license certificate need not
be filed during the balance of the license year if a member of
the family of the deceased person succeeds to the interest in the
business.
Upon receipt and review of the application, the commissioner
shall issue a new license certificate incorporating the changes.
No additional fee for the balance of the license year is required
for the issuance of any new license certificate issued as a
result of any change specified in subdivisions (a), (b), (c),
(d), (e) or (f) of this section.
No new license certificate is required for any trustee in
bankruptcy, trustee under an assignment for the benefit of
creditors, receiver or master, appointed pursuant to law, who
takes charge of or operates such business for the purpose of
winding up the affairs of such business or protecting the
interests of the creditors of such business.
§17A-6C-11. Investigation; grounds for suspending or revoking
license certificate; notice of refusal,
suspension or revocation of license certificate;
relinquishing license certificate and temporary
plates or markers.
(a) The commissioner may investigate whether any provisions
of this article have been violated by a licensee. Anyinvestigation conducted by the commissioner is confidential and
the confidentiality of the investigation shall be maintained by
the commissioner, the division, the licensee, any complainant and
all other persons, until the commissioner suspends or revokes the
license certificate of the licensee involved.
The commissioner may suspend or revoke a license certificate
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
requiring notices of transfers; or
(2) Has failed or refused to comply with the provisions and
requirements of this article, and the promulgated rules under
section nine, article two of this chapter which were implemented
by the commissioner, in accordance with the provisions of article
three, chapter twenty-nine-a of this code.
(b) The commissioner shall suspend or revoke a license
certificate if the commissioner finds that the licensee:
(1) Has knowingly made a false statement of a material fact
in his or her application for the license certificate then issued
and outstanding;
(2) Has habitually defaulted on financial obligations;
(3) Has been convicted of any fraudulent act in connection
with the automobile auction business;
(4) 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;
(5) Has committed fraud in the registration of a vehicle;
(6) Has knowingly purchased, sold or otherwise dealt in
stolen vehicle or vehicles;
(7) Has advertised by any means, with intent to defraud, any
material misleading or deceptive misrepresentation or falsehood
relating to the conduct of the licensed business;
(8) Has a license certificate to which he or she is not
lawfully entitled; or
(9) Has committed an act for which a certificate could have
been refused.
(c) If a licensee fails or refuses to keep the bond or
liability insurance required by section two of this article in
effect, the license certificate for the licensee shall
automatically be suspended unless the required bond and
certificate of insurance is furnished to the commissioner, in
which event the suspension shall be vacated.
(d) If the commissioner refuses to issue a license
certificate, or suspends or revokes a license certificate, or
suspends the right of a licensee to issue temporary plates or
markers under the provisions of section eleven, article six of
this chapter, he or she shall make and enter an order to that
effect and shall cause a copy of this order to be served in
person or by certified mail, return receipt requested, on the
applicant or licensee.
(e) Suspensions continue until the cause of suspension is
eliminated or corrected. If a license certificate and the rightof a licensee to issue temporary registration plates or markers
is suspended or revoked, the commissioner shall, in the order of
suspension or revocation, direct the licensee to return to the
division his or her license certificate and any temporary
registration plates or markers in the licensee's possession and
issued in conjunction with the issuance of an automobile auction
certificate. If a licensee fails or refuses to comply with any
order of the commissioner, the commissioner shall proceed as
provided in section seven, article nine of this chapter.
(f) Any applicant whose request for a license certificate is
refused, and any licensee whose license certificate is suspended
or revoked, may appeal the suspension or revocation in accordance
with procedures developed by the commissioner, pursuant to this
article.
(g) Revocation of a license certificate does not preclude
application for a new license certificate, which shall be
processed in the same manner. The license certificate shall be
issued or denied on the same grounds as any other application for
a license certificate, except that any previous suspension and
revocation may be considered in deciding whether to issue or
refuse the license certificate.
§17A-6C-12. Temporary registration plates or markers.
(a) In order to permit a vehicle which is to be titled and
registered to be operated on the streets and highways pending
receipt of the annual registration plate the commissioner may,
subject to the following limitations, deliver temporary vehicleregistration plates or markers to persons engaged in the
automobile auction business for issuance to applicants for title
and registration of vehicles.
(b) An application by an automobile auction business to the
commissioner for temporary registration plates or markers shall
be made on the form prescribed and furnished by the commissioner
and shall be accompanied by a fee of three dollars for each
temporary registration plate or marker. No refund or credit of
fees paid by automobile auction businesses to the commissioner
for temporary registration plates or markers shall be allowed,
except in the event the commissioner discontinues the issuance of
temporary plates or markers in which case automobile auction
businesses returning temporary registration plates or markers to
the commissioner may petition for and be entitled to a refund or
a credit.
(c) Every automobile auction business applying for and
receiving temporary registration plates or markers shall maintain
in permanent form a record of all temporary registration plates
or markers delivered to the licensee, a record of all temporary
registration plates or markers issued, and a record of any other
information pertaining to the receipt or the issuance of
temporary registration plates or markers which the commissioner
may require. Each record shall be kept for a period of at least
three years from the date issued. Every automobile auction
business issuing a temporary registration plate or marker shall
send to the division a copy of the temporary registration plateor marker certificate properly executed by the automobile auction
business and the purchaser within five working days after the
issuance of the plate or marker. No temporary registration
plates or markers may be delivered to any automobile auction
business until the business has fully accounted to the
commissioner for the temporary registration plates or markers
last delivered by showing the number issued to purchasers and the
number remaining to be issued.
(d) An automobile auction business may not issue, assign or
deliver a temporary registration plate or marker to anyone other
than the bona fide applicant for title and registration of the
vehicle to be registered. Not more than one temporary
registration plate or marker shall be issued to the same bona
fide applicant for the same vehicle. An automobile auction
business shall not issue a temporary registration or marker to
anyone possessing an annual registration plate for a vehicle
which has been sold or exchanged, except an automobile auction
business may issue a temporary registration plate or marker to
the bona fide applicant, who possesses an annual registration
plate of a different class and it may make application to the
division to exchange the annual registration plate of a different
class in accordance with the provisions of section one, article
four of this chapter. An automobile auction business shall not
lend to anyone or use on any vehicle which it may own, a
temporary registration plate or marker. It is unlawful for any
automobile auction business to issue any temporary registrationplate or marker which contains a misstatement of fact or false
information.
(e) Every automobile auction business issuing temporary
registration plates or markers shall affix or insert clearly and
indelibly on the face of each temporary registration plate or
marker the date of issuance, the date of expiration and the make,
model and serial number of the vehicle.
(f) If the commissioner finds that the provisions of this
section or his or her directions are not being complied with by
an automobile auction business, the commissioner may suspend the
right of the automobile auction business to issue temporary
registration plates or markers.
(g) A temporary registration plate or marker expires upon
the receipt of the annual registration plate from the division,
or upon the rescission of the contract to purchase the vehicle in
question, or upon the expiration of sixty days from the date of
issuance depending upon which event occurs first.
§17A-6C-13. Use of special plates; records to be maintained by
automobile auction business; operation of
vehicles under special plates; expiration of
special plate.
(a) Class AA special plates may be used by the automobile
auction business receiving them only for the purpose of
transporting or moving consigned or owned motor vehicles to and
from the automobile auction in the normal course of business:
Provided, That under no circumstances shall a Class AA specialplate be used on any work or service vehicle owned by the
automobile auction business, or any vehicle being operated for
personnel reasons or on any vehicle sold by or through it to a
purchaser.
(b) Every automobile auction business entitled to and issued
a special plate or plates under the provisions of this article
shall keep a written record of the location of each plate. Every
record shall be open to inspection by the commissioner, his or
her representative or any law-enforcement officer, when acting in
an official capacity.
(c) An automobile auction business holding a valid license
certificate who holds on consignment a vehicle or vehicles of the
type required to be registered under this chapter may operate or
move the same upon the streets and highways without registering
each vehicle if such vehicle displays a special plate issued as
provided in this article.
(d) Every special plate or plates shall expire at midnight
on the thirtieth day of June. A new plate or plates for the
ensuing year may be obtained as specified in section four of this
article.
§17A-6C-14. Records must be kept and maintained.
In addition to all other records required to be kept and
maintained, the licensee shall keep and maintain a record of the
following, on forms and for the period of time proscribed by the
commissioner:
(a) Every vehicle which is sold at auction by a licensee orreceived or accepted by the licensee for sale at auction;
(b) The name and address of the person from whom the vehicle
was acquired and the date thereof, the name and address of the
person to whom the vehicle was sold or auctioned, the date
thereof, and a description of each vehicle, with name and
identifying numbers sufficient to identify it; and
(c) Records as the commissioner may require by reasonable
rules promulgated in accordance with the provisions of article
three, chapter twenty-nine-a of this code.
All records required to be kept and maintained shall be kept
for a period of at least three years from the date of the making
and shall be open to inspection by the commissioner, his or her
representative or any law-enforcement officer while acting in an
official capacity.
§17A-6C-15. Notice of refusal, or suspension or revocation, of
license certificate or of suspension of right to
issue temporary registration plates or markers or
of suspension of an automobile auction special
plate or plates; relinquishing license
certificate, dealer special plate or plates and
temporary plates or markers.
(a) If the commissioner refuses to issue a license
certificate, or suspends or revokes a license certificate, or
suspends the right of an automobile auction business to issue
temporary plates or markers under the provisions of section
fifteen of this article, or suspends a Class AA special plate orplates, he or she shall make and enter an order to that effect
and shall cause a copy of the order to be served in person or by
certified mail, return receipt requested, on the applicant or
licensee.
(b) If a license certificate is suspended or revoked, the
commissioner shall, in the order of suspension or revocation,
direct the licensee to return to the department his license
certificate and any special Class AA plates and temporary
registration plates or markers issued in conjunction with the
issuance of the license certificate of the business. If the
right of an automobile auction business to issue temporary
registration plates or markers is suspended or a Class AA special
plate or plates are suspended, the commissioner shall in the
order of suspension direct the licensee to return to the
department all temporary registration plates or markers issued in
conjunction with the business. It is the duty of the licensee to
comply with an order. If a licensee fails or refuses to comply
with any order, the commissioner shall proceed as provided in
section seven, article nine of this chapter.
§17A-6C-16. Inspections; violations and penalties.
(a) The commissioner and law-enforcement officers of the
state, acting at the commissioner's request, are hereby
authorized to inspect the place of business and pertinent
records, documents and papers of any person required to be
licensed under the provisions of this article to the extent
deemed reasonably necessary to determine compliance with theprovisions of this article. For the purpose of making an
inspection, the commissioner and law-enforcement officers are
authorized, at reasonable times, to enter the place of business.
(b) Any person who violates any provision of this article or
any final order of the commissioner or board shall, upon
conviction, be guilty of a misdemeanor, and the provisions of
article eleven of this chapter governing violations of this
chapter generally apply.
§17A-6C-17. Injunctive relief.
(a) If 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, the circuit court of the county in which the
violation or violations occurred, for an injunction against such
person or licensee. A violation or violations resulting in
prosecution or conviction under the provisions of article eleven
of this chapter shall not prohibit injunctive relief.
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.
(b) The judgment by the circuit court shall be final unless
reversed, vacated or modified on appeal to the supreme court of
appeals. Any such appeal shall be sought in the manner and
within the time provided by law for appeals from circuit courts
in other civil cases.
§17A-6C-18. Promulgation of rules.
The commissioner shall promulgate rules in accordance with
chapter twenty-nine-a of this code in order to effect the
provisions of this article.
NOTE: The purpose of this bill is to establish legislation
creating and regulating the automobile auction business.
This article is new; therefore, strike-throughs and
underscoring have been omitted.