SENATE FILE 195

BY  BACON

A BILL FOR

An Act providing an exemption from the fee for new vehicle registration for motor vehicles transferred between certain dealerships upon termination of the vehicle brand, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 321.105A, subsection 2, paragraph c, Code 2011, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (31)  Vehicles subject to registration which are held for sale by a motor vehicle dealership in this state under a franchise agreement with a motor vehicle manufacturer and are transferred to another motor vehicle dealership owned by the same person, persons, or entity, or by a different entity that shares substantially the same ownership interest, when the original dealership closes due to the manufacturer’s discontinuance of the motor vehicle brand and disposition of motor vehicles remaining in the dealership’s inventory is the responsibility of the franchisee.
   Sec. 2.  EFFECTIVE UPON ENACTMENT AND RETROACTIVE APPLICABILITY.  This Act, being deemed of immediate importance, takes effect upon enactment and applies retroactively to December 1, 2010, for vehicles transferred on or after that date.
EXPLANATION
   Under current law, a fee for new registration in the amount of 5 percent of the purchase price of a vehicle is required each time ownership of a vehicle is transferred. This bill provides an exemption from payment of that fee by the owner of a motor vehicle dealership that, upon the close of business, transfers the dealership’s remaining vehicles to another dealership owned by the same person, persons, or entity, or by a different entity that shares substantially the same ownership interest. The exemption applies only when the closing of the original dealership is due to the manufacturer’s discontinuance of the vehicle brand and the franchisee is responsible for disposition of vehicles remaining in the dealership’s inventory.
   The bill is effective upon enactment and applies retroactively to December 1, 2010, for vehicles transferred on or after that date.