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Introduced Version Senate Bill 533 History

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sb533 intr
Senate Bill No. 533

(By Senator Jenkins)

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[Introduced February 1, 2008; referred to the Committee on Transportation and Infrastructure; and then to the Committee on the Judiciary.]

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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
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(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
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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.
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