PRELIMINARY PERFORMANCE REVIEW OF THE
DIVISION OF MOTOR VEHICLES
Motor Vehicle Dealers Advisory Board
Board Fulfills its Statutory
In Accordance with State Law
Two members representing new motor vehicle dealers, with one representing
dealers that sell less than one hundred new vehicles a year;
one member representing used motor vehicle dealers;
one member representing wreckers/dismantlers/rebuilders;
one member representing automobile auctions;
one member representing recreational dealers;
one member representing the West Virginia Attorney General's office; and
two members representing consumers.
All members are appointed by the Governor with the advice and consent of the Senate, with no more than five representatives being from the same political party. Members serve three-year terms without compensation.
The statutory purpose of the Committee is to:
assist and to advise the commissioner on the administration of laws regulating the motor vehicle industry; to work with the commissioner in developing new laws, rules or policies regarding the motor vehicles industry; and to give the commissioner such further advice and assistance as he or she may from time to time require.
§17A-6-19 states that:
The commissioner shall consult with the board before he or she takes any disciplinary action against a dealer, an automobile auction or a license service to revoke, or suspend a license, place the licensee on probation or levy a civil penalty, unless the commissioner determines that the consultation would endanger a criminal investigation.[Emphasis added].
The committee is required to meet four times annually.
Issue Area 1: The Commissioner of DMV has Fulfilled
Statutory Requirements to consult with Motor Vehicle Dealers Advisory Board.
West Virginia state Code, as amended, requires consultation with the Advisory Board in matters relating to disciplinary action. §17A-6-18a(b) states:
The commissioner shall consult with the board before he or she takes any disciplinary action against a dealer, an automobile auction or a license service to revoke or suspend a license, place the licensee on probation or levy a civil penalty, unless the commissioner determines that the consultation would endanger a criminal investigation.
Meeting minutes from September 1997 until the present indicate a pattern of the DMV Commissioner consulting with the Board on disciplinary matters. Between September 1997 and December 1999, 54 revocations were discussed in the executive session of Board meetings. The Board also consulted with the Commissioner of DMV and the Attorney General's representative regarding disciplinary and legal action taken against a dealer.
§17A-6-18 provides for disciplinary actions for 19 reasons. Disciplinary issues discussed by the Advisory Board include, but are not limited to: incorrect taxes remitted to DMV; different sales prices on the title and the sales invoice; failure to assign, reassign or transfer a title certificate for vehicles; unlawful use of dealer plates; lack of appropriate dealership sign; no warranty agreement in display window; incomplete dealership records; failure to collect taxes; failure to maintain a place of business as required by state law; failure to make business available to inspection; failure to keep minimum posted business hours, and lack of telephone listing for the dealership.
The Advisory Board discusses pending disciplinary action in executive session before action is taken. At the March 2000 meeting members reported illegal activities currently conducted by individuals with revoked or suspended dealer licenses to the Commissioner of DMV. In this function, the Advisory Board is fulfilling its statutory duty.
Issue Area 2: The Motor Vehicle Dealers Advisory Board
Assists the Commissioner of DMV in Developing New Laws and Policies.
The Advisory Board was created to assist the Commissioner of the Division of Motor Vehicles in developing laws and policies which aid in the regulation of the motor vehicle industry. The Board's duties are set forth in statute. §17A-6-18a(a) states:
There is created a motor vehicle dealers advisory board to assist and to advise the commissioner on the administration of laws regulating the motor vehicle industry; to work with the commissioner in developing new laws, rules or policies regarding the motor vehicle industry; and to give the commissioner such further advice and assistance as he or she may from time to time require. [Emphasis added.]
The manager of DMV's Dealer Services stated in a letter to the Legislative Auditor that:
The Board is composed of members who serve as the link between the Commissioner and the community. Their insight and ideas have been very productive in providing suggestions on effective laws, policies and procedures that help in the process of proposing bills to the legislature. The efforts put forth from board members, along with their wide range of knowledge, have proven to be beneficial for the Division of Motor Vehicles in serving the consumers and dealers of West Virginia.
In the 2000 regular Legislative Session, the Advisory Board helped DMV develop House Bill 4153 and Senate Bill 651, both of which passed and will become law. House Bill 4153 is effective June 9, 2000. It allows persons to retain possession and ownership of a vehicle that sustains only cosmetic damage to the extent that repairs exceed 75% of the vehicle's value. Under current law, the vehicle would be considered totaled and consequently turned over to the insurance company. The new law also requires insurance companies to determine if a vehicle is: Cosmetically damaged; Structurally damaged but capable of being rebuilt, or Non-repairable. Senate Bill 651 becomes effective July 1, 2000. The law grants DMV the authority to regulate the Rental Vehicle Industry in order to ensure that businesses are collecting the daily rental transaction fee.
The Advisory Board is currently active in preparing two pieces of legislation for the 2001 legislative session. The Dealer Recovery Fund is the most important item on DMV's 2001 legislative agenda. This legislation will attempt to address the inadequacy of current surety bonds in a manner that is affordable for small vehicle dealers while improving the protection of the public from unscrupulous dealers. The Advisory Board is also helping DMV develop legislation to license salespeople in order to protect the public, as well as licensed dealers from unscrupulous salespeople. However, neither the DMV nor the Advisory Board has submitted an application to the Joint Standing Committee on Government Organization, as required under §30-1A-2, otherwise known as the Sunrise Law.
The Legislature finds that regulation should be imposed on an occupation or profession only when necessary for the protection of public health and safety. The Legislature further finds that establishing a procedure for reviewing the necessity of regulating an occupation or profession prior to enacting laws for such regulation will better enable it to evaluate the need for the regulation and to determine the least restrictive regulatory alternative consistent with public health and safety.
If the Motor Vehicle Dealers Advisory Board and the DMV believe auto
sales-persons should be licensed, the licensing board should be created
under Chapter 30 of the West Virginia State Code, as amended, and the appropriate
parties should submit information pursuant to the West Virginia Sunrise
Law, §31-1A-2, to the Joint Committee on Government Operations.
Issue Area 3: The Motor Vehicle Dealers Advisory Board Conducts its Meetings In Accordance with State Law.
According to the Administrative Law Division of the Secretary of State's Office, the Board is in compliance with the Open Meetings Law. A review of meeting minutes indicates that the Board enters into executive session appropriately when it discusses disciplinary action against individual licensees. §6-9A- 4 allows a governing body of a public agency to enter into executive session under certain circumstances. During the open meeting, the presiding officer must identify the authorization for holding the executive session and present it to the body and the general public. Executive session is authorized, by statute for several reasons, including:
To issue, effect, deny, suspend or revoke a license, certificate or registration under the laws of this state or any political subdivision...
A majority of members present must vote to go into executive session. When the Advisory Board goes into Executive Session, it continues to keep minutes of the discussions, with the names of the individuals and business deleted. During the December 1997 meeting, the Board discussed information related to confidential actions against dealers, pursuant to §17A-6-18(a). According to the meeting minutes, Those actions are kept in a separate confidential minute book at the Motor Vehicle Commissioner's Office. §17A-6-18(a) states:
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 the strictest confidence by the commissioner, 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 such information as may enable it to perform its advisory function in imposing penalties.
June 1998 meeting minutes indicate that the Advisory Board considers compliance with the Open Meetings Law important. An excerpt from the discussion follows:
[The Attorney General's representative] discussed the Open Governmental Meeting Laws and advised that the Board's meetings were considered open for the public with several exceptions including pending investigations and revocations of dealers and licensing services. Pending investigations and revocations could only be addressed in executive sessions without the public being present...The minutes of the executive meeting will be kept without disclosing the names of the businesses being investigated. Notice of regularly scheduled meetings should be sent to the Secretary of State...
Once an action is taken, it is discussed in the open meetings.
Meeting minutes also indicate that the Board meets four times a year, as required by §17A-6-18a(a). Since 1997, the Division of Motor Vehicles has actively participated in Board meetings, with the Commissioner always in attendance. Furthermore, at least two other representatives of DMV are present at all meetings. The Attorney General's representative, which serves as legal advisor to the Advisory Board is always present at Board meetings. Citizen members do not maintain perfect attendance, which is not surprising due to the fact that they receive no compensation or reimbursement for their travel or participation. Still, citizen members, on the whole, actively participate and attend the meetings.
The Legislature should consider changing the statute to reimburse appointed board members at the same rate as the Legislature.
The Legislature should consider continuing the Motor Vehicle Dealers Advisory Board.