HF 2101 (LSB 5660YH (5) 85)

HOUSE FILE 2101

BY  BYRNES

A BILL FOR

An Act providing an exemption from registration fees for certain new completed motor vehicles purchased by an equipment dealer for modification and resale.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.48, Code 2014, is amended by adding the following new subsection:
   NEW SUBSECTION.  3A.  A transferee of a new completed motor vehicle shall obtain a certificate of title for the vehicle but is not required to pay the annual registration fee for the vehicle, provided all of the following apply: 
   a.  The transferee is an equipment dealer licensed as a motor vehicle dealer under chapter 322. 
   b.  The transferee purchases the vehicle at retail for the purpose of modifying the vehicle as provided in section 321.105A, subsection 2, paragraph “c”, subparagraph (31), prior to selling it as a used vehicle to a business or government entity.
   c.  The transferee operates the vehicle only for purposes incidental to a resale.
   d.  The transferee displays a dealer plate on the vehicle or does not drive the vehicle or permit it to be driven upon the highways.
    Sec. 2.  Section 321.105A, subsection 2, paragraph c, Code 2014, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (31)  (a)  A new completed motor vehicle purchased at retail by an equipment dealer who is licensed as a motor vehicle dealer under chapter 322, provided that all of the following apply:
   (i)  The equipment dealer modifies the vehicle as provided in subparagraph division (b), subparagraph subdivision (i) or (ii).
   (ii)  The total value of the work performed and the equipment installed on the vehicle equals or exceeds eighty percent of the purchase price paid for the new vehicle.
   (iii)  Notwithstanding section 322.3, the equipment dealer sells the modified vehicle as a used vehicle to a purchaser that is a business or government entity, and not an individual consumer.
   (b)  For purposes of this subparagraph, “equipment dealer” means a person who does at least one of the following:
   (i)  Rebuilds new completed motor vehicles by fabricating, altering, adding, or replacing essential parts, components, or equipment for the purpose of building an ambulance, rescue vehicle, fire vehicle, or towing or recovery vehicle.
   (ii)  Installs cranes, hook loaders, buckets, aerial ladders, tanks, or special equipment on new completed motor trucks with a gross vehicle weight rating of fourteen thousand five hundred pounds or more.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   Under current law, an equipment dealer who rebuilds or installs equipment on new vehicles can be licensed as a wholesaler in order to acquire new vehicles without having to title and register the vehicles or pay the fee for new registration. However, after such a vehicle has been modified, the retail sale of the modified vehicle must be completed through a franchised dealer of the vehicle’s line make.
   This bill establishes an alternative process for an equipment dealer with a motor vehicle dealer’s license to acquire a new completed motor vehicle without owing the fee for new registration and, after modifying the vehicle, sell it directly to a business or government entity as a used vehicle. Under the bill, a new completed motor vehicle purchased at retail by an equipment dealer licensed to sell motor vehicles is exempt from the fee for new registration, provided that three requirements are met:
   1. The equipment dealer either rebuilds the new completed motor vehicle by fabricating, altering, adding, or replacing essential parts, components, or equipment for the purpose of building an ambulance, rescue vehicle, fire vehicle, or towing or recovery vehicle; or installs cranes, hook loaders, buckets, aerial ladders, tanks, or special equipment on the new completed motor truck having a gross vehicle weight rating of fourteen thousand five hundred pounds or more.
   2. The total value of the work performed and the equipment installed on the vehicle equals or exceeds 80 percent of the purchase price paid for the new vehicle.
   3. The equipment dealer sells the modified vehicle as a used vehicle to a purchaser that is a business or government entity, and not an individual consumer.
   Because the equipment dealer’s acquisition of a new completed motor vehicle would be through a retail sale, the equipment dealer would be required to obtain a certificate of title and registration for the vehicle under the bill. However, the bill exempts the equipment dealer from annual registration fees, provided that the equipment dealer operates the vehicle only for purposes incidental to a resale and displays a dealer plate on the vehicle or does not drive the vehicle or permit it to be driven upon the highways.