H. B. 4364
(By Delegates Schadler and Hrutkay)
[Introduced January 31, 2008; referred to the
Committee on Roads and Transportation then the
Judiciary.]
A BILL to amend and reenact §17A-6-1b, §17A-6-2a, §17A-6-4,
§17A-6-7 and §17A-6-15 of the Code of West Virginia, 1931, as
amended; and to amend and reenact §17A-6E-2 of said code, all
relating to the licensing of dealers, extending authority to
out of state dealers to issue vehicle registrations; expanding
authority of dealer recovery fund control board to consider
claims against the fund; increasing minimum bond requirement
from ten thousand dollars to twenty-five thousand dollars;
establishing minimum number of sales prior to renewal and
opportunity for appeal; exempting salespersons employed by
dealers selling commercial vehicles, financial institutions
and auctions from the requirement to obtain a salesperson
license and authorizing the commissioner to require
participation in an electronic temporary plates or markers
program as a precondition for issuance of temporary plates.
Be it enacted by the Legislature of West Virginia:
That §17A-6-1b, §17A-6-2a, §17A-6-4, §17A-6-7 and §17A-6-15 of
the Code of West Virginia, 1931, as amended, be amended and
reenacted; and that §17A-6E-2 of said code be amended and
reenacted, all to read as follows:
ARTICLE 6. LICENSING OF DEALERS AND WRECKERS OR DISMANTLERS;
SPECIAL PLATES; TEMPORARY PLATES OR MARKERS.
§17A-6-1b. Dealers authorized to issue motor vehicle registration.
(a) Notwithstanding any other provision in this chapter, the
division may allow a licensed motor vehicle dealer as defined in
section one of this article, authority to issue or transfer motor
vehicle registrations for vehicles sold by the dealer. The
authority to issue and transfer motor vehicle registrations shall
be contingent upon the dealer collecting all fees and taxes
required for the titling and registration of vehicles, receiving
proof of insurance as described in subsection (e), section three,
article three of this chapter, and if applicable receiving the
receipt showing full payment of personal property taxes in
accordance with section three-a, article three of this chapter.
(b) Authorization to issue and transfer motor vehicle
registrations shall be contingent on the dealer completing an
application provided by the division and meeting all criteria
established by the division. The authority shall also be
contingent upon the dealer agreeing to participate fully in a computerized system of electronic submission of registration,
titling and lien information and all fees and taxes required under
the provisions of this chapter, either directly to the division or
through an authorized service provider selected and approved by the
division. Any transaction conducted under the provisions of this
section shall be conditional pending the determination by the
division that the application for title, registration and lien
recordation is complete, accurate and in accordance with the
provisions of this chapter.
(c) The authority to participate in the electronic
transmission of title, registration and lien information shall be
immediately revoked upon revocation or cancellation of a dealer's
license issued under the provisions of this chapter: Provided,
That the authority to issue and transfer motor vehicle
registrations may be revoked by the division immediately and
separately from any other action against the dealer's license if
the division determines that the terms of the agreement or
agreements authorizing issuance, transfer or renewal of a vehicle
registration or the electronic transmission of information have
been violated.
(d) A fee established by the motor vehicle dealer advisory
board may be charged by a motor vehicle dealer for its services
required under this section.
(e) Only motor vehicle registrations of a type specified by the division may be issued, transferred or renewed by the
authorized dealer.
(f) All fees and taxes collected by an authorized dealer under
the provisions of this section shall be deposited in a financial
institution designated by the division or the service provider in
the manner prescribed by the division.
(g) The division may authorize a service provider to supply an
authorized dealer with the necessary forms, supplies, registration
plates and registration renewal decals necessary to enable the
authorized dealer to perform the duties and functions specified in
this section.
(1) Any service provider authorized to perform services under
the provisions of this section shall post a bond of the applicant
in the penal sum of one million dollars, in the form prescribed by
the commissioner, conditioned that the applicant will not in the
conduct of business practice any fraud which, or make any
fraudulent representation which, shall cause a financial loss to
any dealer, financial institution or agency, or the State of West
Virginia, with a corporate surety thereon authorized to do business
in this state, which bond shall be effective as of the date on
which the authorization to provide services commences.
(2) The service provider is solely responsible for the
inventory, tracking, safety and reconciliation of all supplies,
registration plates, registration decals or other motor vehicle credentialing items in accordance with procedures established by
the division and subject to audits by the division.
(3) The division may rescind without notice the authority of
a service provider to perform services when the division has cause
to believe that any state or federal law has been violated or that
the service provider is not adhering to the terms and conditions of
the authorization agreement.
(h) The service provider and the authorized dealer assume full
responsibility for the care, custody, control, disclosure and use
of any information provided by the division in order to execute the
duties and responsibilities required by this section. Each service
provider and each authorized dealer agrees to ensure that the
disclosure of information to it and its handling of information
received from the division complies with all federal and state
statutes and division directives governing the disclosure and
protection of such information.
(i) The commissioner may enter into agreements with other
states and jurisdictions granting licensed dealers regulated by
other states and jurisdictions the authority to issue or transfer
motor vehicle registrations for vehicles sold by the dealer in the
same manner as dealers licensed by this state.
§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 of certain moneys received from persons engaged
in the business of selling new or used motor vehicles, new or used
motorcycles, trailers, semi-trailers 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 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 as chair and the board shall meet at
least once a year during the month of July, and as required by the
commissioner. 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 one hundred
fifty dollars. 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 three million dollars as of the first day of July 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 the first day of
April of any year, drop below three million dollars, all dealers,
regardless of any previous exemption shall pay the annual dealer
recovery fee of one hundred fifty dollars. 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 two hundred fifty thousand dollars,
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 the first day of July, two
thousand two.
(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; or
(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 fifty thousand dollars for each licensing
year the West Virginia dealer that is the subject of the complaint
did not maintain the bond. The board may not consider claims
submitted by or on behalf of a financial institution that lends
money or credit to a dealer and holds the dealer inventory as
collateral or payment of the loan or credit, commonly referred to
as a floor planner.
(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 limit the
authority of the commissioner to suspend, revoke or levy civil
penalties against a dealer, nor shall 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 limit the right for 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.
§17A-6-4. Application for license certificate; insurance; bonds;
investigation; information confidential
.
(a) Application for any license certificate required by
section three of this article shall be made on a form prescribed by
the commissioner. There shall be attached to the application a
certificate of insurance certifying that the applicant has in force
an insurance policy issued by an insurance company authorized to do
business in this state insuring the applicant and any other person,
as insured, using any vehicle or vehicles owned by the applicant
with the express or implied permission of the named insured,
against loss from the liability imposed by law for damages arising
out of the ownership, operation, maintenance or use of the vehicle
or 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 the 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.
(b) In the case of an application for a license certificate to
engage in the business of new motor vehicle dealer, used motor
vehicle dealer or house trailer dealer, the application shall
disclose, but not be limited to, the following:
(1) The type of business for which a license certificate is
sought;
(2) If the applicant is an individual, the full name and
address of the applicant and any trade name under which he or she
will engage in the business;
(3) If the applicant is a copartnership, the full name and
address of each partner in the copartnership, the name of the
copartnership, its post-office address and any trade name under
which it will engage in the business;
(4) If the applicant is a corporation, its name, the state of
its incorporation, its post-office address and the full name and
address of each officer and director of the corporation;
(5) The location of each place in this state at which the
applicant will engage in the business and whether the business is
owned or leased by the applicant;
(6) Whether the applicant, any partner, officer or director of
the business has previously engaged in the business or any other
business required to be licensed under the provisions of this
article and if so, with or for whom, at what location and for what
periods of time;
(7) Whether the applicant, any partner, officer, director or
employer of the business has previously applied for a license
certificate under the provisions of this article or a similar
license certificate in this or any other state, and if so, whether
the license certificate was issued or refused and, if issued,
whether it was ever suspended or revoked;
(8) A statement of previous general business experience and
the past history of the applicant; and
(9) Any other information that the commissioner may reasonably
require which may include information relating to any contracts,
agreements or understandings between the applicant and other
persons respecting the transaction of the business, and any
criminal record of the applicant if an individual, or of each
partner if a copartnership, or of each officer and director, if a
corporation.
(c) In the case of an application for a license certificate to
engage in the business of new motor vehicle dealer, the application
shall, in addition to the matters outlined in subsection (b) of
this section disclose:
(1) The make or makes of new motor vehicles which the
applicant will offer for sale in this state during the ensuing
fiscal year; and
(2) The exact number of new and used motor vehicles, if any,
sold at retail and wholesale by the applicant or his or her
predecessor, if any, during the preceding fiscal year, and if no
new and used motor vehicles were sold at retail and wholesale by
the applicant or his or her predecessor, if any, during the
preceding fiscal year, the number of new and used motor vehicles
the applicant reasonably expects to sell at retail and wholesale
during the ensuing fiscal year.
(d) In the case of an application for a license certificate to
engage in the business of used motor vehicle dealer, the
application shall in addition to the matters outlined in subsection
(b) of this section, disclose the exact number of used motor
vehicles, if any, sold at retail and wholesale by the applicant or
his or her predecessor, if any, during the preceding fiscal year,
and if no used motor vehicles were sold at retail and wholesale by
the applicant or his or her predecessor, if any, during the
preceding fiscal year, the number of used motor vehicles the
applicant reasonably expects to sell at retail and wholesale during
the ensuing fiscal year.
(e) In the case of an application for a license certificate to
engage in the business of trailer dealer, recreational vehicle dealer, motorcycle dealer, used parts dealer or wrecker/
dismantler/rebuilder, the application shall disclose any
information that the commissioner may reasonably require.
(f) The application shall be verified by the oath or
affirmation of the applicant, if an individual, or if the applicant
is a copartnership or corporation, by a partner or officer thereof,
as the case may be. Except as provided in section two-a of this
article, the application shall be accompanied by a bond of the
applicant in the penal sum of ten twenty-five thousand dollars, in
the form prescribed by the commissioner, conditioned that the
applicant will not in the conduct of his or her business practice
any fraud which, or make any fraudulent representation which, shall
cause a financial loss to any purchaser, seller or financial
institution or agency, or the State of West Virginia, with a
corporate surety thereon authorized to do business in this state.
The bond shall be effective as of the date on which the license
certificate sought is issued.
(g) Upon receipt of any fully completed application, together
with any bond required under subsection (f) of this section, the
certificate of insurance as required in subsection (a) of this
section and the appropriate fee provided for in section ten of this
article, the commissioner may conduct any investigation he or she
considers necessary to determine the accuracy of any statements
contained in the application and the existence of any other facts which he or she considers relevant in considering the application.
To facilitate the investigation, the commissioner may withhold
issuance or refusal of the license certificate for a period not to
exceed twenty days.
(h) Any application for a license certificate under the
provisions of this article and any information submitted with the
application is confidential for the use of the division. No person
shall divulge any information contained in any application or any
information submitted with the application except in response to a
valid subpoena or subpoena duces tecum issued pursuant to law.
§17A-6-7. When application to be made; expiration of license
certificate; renewal.
(a) Every license certificate issued in accordance with the
provisions of this article shall, unless sooner suspended or
revoked, expire on June thirtieth next following the issuance
thereof.
(b) A license certificate may be renewed each year in the same
manner, for the same fee as prescribed in section ten of this
article and upon the same basis as an original license certificate
is issued under section six of this article: Provided, That the
commissioner may not renew the license of any new or used motor
vehicle dealer who has sold less than twenty-five vehicles during
the proceeding year subject to the following:
(1) This proviso does not apply to a dealer in the business of
selling commercial motor vehicles of a gross vehicle weight of
twenty-six thousand one pounds or more;
(2) The commissioner may approve the renewal of a dealer
selling less than twenty-five vehicles based on a finding of
extenuating circumstances including, but not limited to, the
illness of the dealer, adverse business conditions or sales
credited to other types of dealer licenses held by the dealer; and
(3) Any dealer may appeal the commissioner's refusal to the
motor vehicle dealer advisory board which may consider extenuating
circumstances and approve the renewal.
All applications for the renewal of any license certificate
shall be filed with the commissioner at least thirty days before
the expiration thereof. Any application for renewal of any license
certificate not filed at least thirty days before the expiration
may not be renewed except upon payment of the same fee as an
original license certificate as prescribed in subsection (a),
section ten of this article. The commissioner may allow the
delinquent applicant to complete an abbreviated application for
renewal in lieu of an original application.
§17A-6-15. Temporary registration plates or markers.
(a) In order to permit a vehicle which is sold to a purchaser
by a dealer to be operated on the streets and highways pending
receipt of the annual registration plate from the division for such vehicle, the commissioner may, subject to the limitations and
conditions hereinafter set forth, deliver temporary vehicle
registration plates or markers to dealers who in turn may, subject
to the limitations and conditions hereinafter set forth, issue the
same to purchasers of vehicles, but such purchasers must comply
with the pertinent provisions of this section.
(b) Application by a dealer to the commissioner for such
temporary registration plates or markers shall be made on the form
and in the manner prescribed and furnished by the commissioner for
such purpose and shall be accompanied by a fee of three dollars for
each such temporary registration plate or marker. The commissioner
may require the fee to be remitted to the division in an electronic
format. No refund or credit of fees paid by dealers to the
commissioner for temporary registration plates or markers shall be
allowed, except that in the event the commissioner discontinues the
issuance of such temporary plates or markers, dealers returning
temporary registration plates or markers to the commissioner may
petition for and be entitled to a refund or a credit thereof. No
temporary registration plates or markers shall be delivered by the
commissioner to any dealer in house trailers only, and no such
temporary plates or markers shall be issued for or used on any
house trailer for any purpose.
(c) Every dealer who has made application for and received
temporary registration plates or markers shall maintain in permanent form a record of all temporary registration plates or
markers delivered to him in a manner prescribed by the
commissioner, a record of all temporary registration plates or
markers issued by him or her, 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 such
record shall be kept for a period of at least three years from the
date of the making thereof. Every dealer who issues a temporary
registration plate or marker shall, within five working days after
he issues such plate or marker, send to the division a copy of the
temporary registration plate or marker certificate properly
executed by such dealer and the purchaser notify the division in
the manner prescribed by the commissioner. No temporary
registration plates or markers may be delivered to any dealer until
such dealer has fully accounted to the commissioner for the
temporary registration plates or markers last delivered to such
dealer, by showing the number issued to purchasers by such dealer
and any on hand.
(d) A dealer shall may not issue, assign, transfer or deliver
a temporary registration plate or marker to anyone other than the
bona fide purchaser of the vehicle to be registered; nor shall may
a dealer issue a temporary registration plate or marker to anyone
possessed of an annual registration plate for a vehicle which has
been sold or exchanged, except a dealer may issue a temporary registration plate or marker to the bona fide purchaser of a
vehicle to be registered who possesses an annual registration plate
of a different class and makes application to the division to
exchange such annual registration plate of a different class in
accordance with the provisions of section one, article four of this
chapter; nor shall may a dealer lend to anyone, or use on any
vehicle which he or she may own, a temporary registration plate or
marker. It shall be is unlawful for any dealer to issue any
temporary registration plate or marker knowingly containing any
misstatement of fact, or knowingly to insert any false information
upon the face thereof.
(e) Every dealer who issues temporary registration plates or
markers shall affix or insert clearly and indelibly on the face of
each temporary registration plate or marker in the manner
prescribed by the commissioner, the date of issuance and expiration
thereof, and the make and motor or serial number of the vehicle for
which issued.
(f) If the commissioner finds that the provisions of this
section or his or her directions are not being complied with by a
dealer, he or she may suspend the right of such dealer to issue
temporary registration plates or markers.
(g) Every person to whom a temporary registration plate or
marker has been issued shall permanently destroy such temporary
registration plate or marker immediately upon receiving the annual registration plate for such vehicle from the division:
Provided,
That if the annual registration plate is not received within sixty
days of the issuance of the temporary registration plate or marker,
the owner shall, notwithstanding the fact that the annual
registration plate has not been received, immediately and
permanently destroy the temporary registration plate or marker:
Provided, however, That not more than one temporary registration
plate or marker shall be issued to the same bona fide purchaser for
the same vehicle.
(h) A temporary registration plate or marker shall expire and
become void 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 whichever event shall first occur.
(i) For the purpose of this section, the term "dealer"
includes a wrecker/dismantler/rebuilder
and in the context of
issuing temporary registration plates, any other business licensed
by the division in accordance with the provisions of this chapter
and authorized to issue temporary registration plates or markers.
(j) The commissioner shall require participation in an
electronic temporary plate issuance system as a precondition for
authority to issue temporary license plates or markers
.
ARTICLE 6E. MOTOR VEHICLE SALESPERSON LICENSE.
§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 article 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,
as those terms are defined in section one of article one of this
chapter, 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. For the purposes of this article, the term "motor
vehicle salesperson" does not apply to persons employed by a dealer
in the business of selling commercial motor vehicles with a gross
vehicle weight of twenty-six thousand one pounds or more, employees
of financial institutions or to businesses licensed as auctions.
NOTE: The purpose of this bill is to amend various
requirements for motor vehicle dealers. The bill expands the
authority of the Dealer Recovery Fund Control Board to award
claims; raises the minimum bond required of dealers during their
first three years of operation from $10,000 to $25,000; establishes
a minimum level of vehicle sales to remain a licensed dealer; adds
required participation in electronic issuance of temporary license
plates; and authorizes dealers in border states to issue
registrations on vehicle sales and exempts persons employed by a
dealer in the business of selling commercial motor vehicles from
the requirements of obtaining a dealer salesperson license.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.